THE LAW BEHIND 3 MONTH’S NOTICE OF TERMINATION OF A CONTRACT IN ZIMBABWE. AN ANALYSIS OF THE LABOUR ACT [CHAPTER 28:08] AND THE LABOUR AMMENDMENT BILL NUMBER 7 OF 2015
On 17 July 2015 when the Supreme Court of Zimbabwe handed down the judgment of Don Nyamande & Kingstone Donga v Zuva Petroleum (Private) Limited Case No: SC 43/15 there were reports of dismissal of employees by a large number of companies thus creating controversy in the public. Some wholesale dismissals arose because of a misreading of the judgment, members of public misread the judgment and did not understand the principles raised before the Supreme Court of Zimbabwe.
A number of companies dismissed employees under the impression that the employer had a right to terminate an employee’s contract on notice in all circumstances. Section 12 (4)(a) of the Labour Act [ Chapter 28:01] provided that notice of termination of a contract of employment to be given by either party shall be 3 months’ notice in a contract without a limit of time or a contract for a period of 2 years or more. In terms of the law it simply meant that either party had a right to notify the other party that it was going to terminate a contract without a limit of time to the other party.
In the Don Nyamande v Zuva Petroleum case the Supreme Court simply affirmed what had been pronounced in its previous judgments that the right to terminate on notice is available to the employer in certain circumstances. The Supreme Court of Zimbabwe did not introduce any new principle of law. The issue that was determined by the court in the Don Nyamande case was whether or not the common law right to terminate an employment relationship on notice was still part of our law. In terms of the law the employer did not have a reason to show cause to the employee why the contract was being terminated on notice. If the basis for the termination of an employee’s contract is misconduct on the part of the employee the relevant disciplinary procedure is applicable to the employee. An employer may use its Code of Conduct for that particular industry. If the company does not have a Code of Conduct then the employer will have to abide by the provisions set in the Labour (National Employment Code of Conduct) Regulations of 2006.
If the basis for termination of an employment contract by an employer is ill health the employer is obliged to follow the termination procedure provided in section 14 of the Labour Act [ Chapter 28:01]. If the basis for the termination is that an employee has reached retirement age the employer is obliged to follow the relevant retirement procedures.
The position of the law on 3 months’ notice termination has since changed with the passing of the labour bill amendment number 7 of 2015. The bill was passed in order to amend the Labour Act [Chapter 28:01]. In terms of Clause 4 of the labour bill number 7 of 2015 no employer shall terminate a contract of employment on notice unless if the termination is in terms of an employment code, or in the absence of an employment code, in terms of the model code made under section 101 (9) or the employer and the employee mutually agree in writing to the termination of the contract or the employee was engaged for a period of fixed duration or for the performance of some specific service or pursuant to retrenchment , in accordance with section 12 C of the labour Act. The employer cannot terminate an employee by simply giving a 3 months’ notice. The employer has to give an employee notice of his or her intention to retrench to the works council for the undertaking or if there is no works council established for the undertaking or if a majority of the employees concerned agree to such a course, to the employment council established for the undertaking or industry. If there is no work’s council or employment council notice is given to the Retrenchment Board. The employer has to give the work’s council, employment council or the Retrenchment Board the details of the employee whom the employer wishes to retrench and of the reasons of the proposed retrenchment and send a copy of the notice to the Retrenchment Board.
An employee who has been retrenched in terms of the Labour bill number 7 of 2015 is entitled to a minimum retrenchment package of not less than one month’s salary or wages for every two years of service as an employee. The retrenchment package shall be paid by an employer to the employee as loss of employment. If the employee alleges financial incapacity and the consequent inability to pay the minimum retrenchment package timeously or at all, the employer shall apply in writing to be exempted from paying the full retrenchment package or any part of it to the employment council established for the undertaking or industry or if there is no employment council for the undertaking concerned, to the Retrenchment Board which shall respond within 14 days of receiving the notice.
