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- Termination of employment in South Africa is primarily governed by the Labour Relations Act, 1955, and case law, requiring employers to strictly adhere to legislative regulations and their application.
- Employment may end automatically upon the employee’s death, through resignation, retirement, completion of a fixed-term contract, mutual agreement, or dismissal.
- Resignation must be clear, unambiguous, and unconditional, and while verbal resignations may be valid in certain circumstances, they can pose challenges in disputes.
- Dismissal is permissible only for valid, fair reasons such as misconduct, medical incapacity, poor performance, or operational requirements, and must follow a fair and lawful process.
- Employers are advised to seek professional legal counsel to ensure employment terminations comply with labour laws and protect their businesses.
Termination of employment in South Africa is mainly regulated by the Labour Relations Act, 1955 (Act 66 of 1995), or LRA, and case law. It is crucial that employers adhere to the regulations set out in legislation, as well as its application as upheld by case law.
The following are six of the most common ways in which the employer/employee relationship can come to an end.
Death
Employment automatically ends when an employee dies.
Resignation
Resignation is a unilateral act by an employee when he or she terminates the employment relationship. The employer is not legally required to communicate its acceptance of the resignation to the employee.
For a resignation to be valid, however, it must meet certain requirements as stipulated by law:
- A resignation must be clear, unambiguous, and unconditional. The mere intention to resign is not sufficient; the employee’s deeds, words and/or actions must make it clear that he/she is resigning.
- Section 37(4)(a) of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997), or BCEA, stipulates that a resignation must be in writing, unless an employee is illiterate. Case law indicates that an employee’s verbal resignation can be valid in certain circumstances. However, the employee’s words, actions, and the accompanying circumstances must make it clear that he/she is resigning. In practice, verbal resignations can be problematic because proving that an employee has indeed resigned is often difficult, especially if a dispute is referred to the Commission for Conciliation, Mediation and Arbitration (CCMA).
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Retirement
As soon as an employee reaches the workplace’s set retirement age, his/her employment comes to an end. The employer must ensure that all employees know what the retirement age is; it must also be stipulated in the employer’s policies or employment contracts, as there is no law in South Africa that specifically states at what age any employee in the private sector must retire.
Fixed-term employment
If an employee has a fixed-term employment contract, his/her employment comes to an end as soon as the period in question has expired, or the task/reason linked to the employment is completed. Fixed-term employment contracts are usually entered into for a set period or for a specific purpose or project.
The LRA strictly regulates fixed-term employment contracts and before entering into these contracts with employees, the employer must ensure that the period and conditions linked to the fixed-term employment contract adhere to relevant legislation.
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Mutual separation agreement
The employment relationship can also conclude by means of a mutual separation agreement, in which both the employer and employee agree to the termination of the employment relationship. Such an agreement must be concluded in writing, signed by the employer, employee and their witnesses, as well as contain all of the provisions relating to the agreement.
Dismissal
The LRA regulates the dismissal of an employee by the employer. Dismissal is only permissible when there is a good, fair and valid reason for it, and only after a fair process was followed. As set out in the LRA, an employee can be dismissed based on misconduct, medical incapacity, poor work performance, and/or the employer’s operational requirements. It is essential that the employer follows the prescribed procedures before dismissing an employee.
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Employers need to be aware of the different ways in which an employment relationship can come to an end, and must ensure that the correct processes are followed in line with labour legislation. Seek professional legal advice to ensure that the termination of employment is fair, legal, and in accordance with relevant legislation. – James Pretorius, legal advisor, LWO Employers Organisation
The LWO Employers Organisation assists employers to comply with labour law, and to use it to their advantage to protect their business. As a registered employers’ organisation with the Department of Employment and Labour, the LWO has the right to represent members at the Commission for Conciliation, Mediation and Arbitration (CCMA). Take note that this article is not legal advice – consult one of our legal advisors about any specific legal problem or matter. For more information, send an email to James Pretorius at james@lwo.co.za or info@lwo.co.za, or visit www.lwo.co.za.
