Notice and Severance
Notice Requirement
A worker is entitled to a termination notice or payment in lieu of notice, except in cases of gross misconduct. The notice period is generally specified under the employment contract. If it is not clearly provided under the contract of employment, the minimum duration is 24 hours for a contract of employment not exceeding one month; 14 days for a contract of employment ranging between one to three months; and 30 days for a contract of employment of more than three months. The notice to terminate a contract of employment of more than six months shall be in writing.
An employer is prohibited from giving termination notice during a period of leave taken under this Act, or which runs concurrently with any period of leave taken under this Act. The employer may pay in lieu of notice where a termination notice is not served. If a worker refuses to work during the notice period, the employer may deduct from any money due to the employee on termination the amount that would have been due to the employee if the employee had worked during the notice period. Task-specific contracts as well as time-specific contracts terminate on the completion of the task and expiry of the fixed period, respectively, without any need for a termination notice. Probationary contract can be terminated on a 24-hour notice.
Where an employer intends to terminate a contract of employment by reason of redundancy, the employer must give notice of at least 30 days to the employee or a representative of the employee of the impending redundancy and inform the representative on the number of employees (if more than one to be affected) and the period within which the termination is intended to be carried out;
The employment contract can be written or oral. The oral employment contract terminates at the end of the notice period, and no specific grounds are required for its termination. However, specific procedural requirements are followed in case of summary dismissal and redundancy, as provided by the law. The written employment contract terminates by the expiry of the term for which it is expressed to be made; or by the death of the employee before such expiry; or in any other manner in which a contract of service may be lawfully terminated or deemed to be terminated, whether under the provisions of this Act or otherwise. In case of sickness or accident, due to which an employee is unable to fulfil a written contract of service, the contract may be terminated on the report of a registered medical practitioner.
Where a contract is terminated at the initiative of the employer, the employer is required to give reasons to the employee for the termination of employment. An employment contract cannot be terminated unless there is a valid reason for termination connected with the worker’s capacity or conduct, or the operational requirements of the undertaking. The following have been specified as reasons for unfair dismissals:
- Union membership or participation in union activities outside working hours or within working hours with the consent of the employer;
- seeking office as an employees’ representative;
- the filing of a complaint, the participation in proceedings against an employer involving alleged violation of laws or recourse to administrative authorities;
- race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion or affiliation, ethnicity, tribal affiliation or social status of the employee; or
- absence from work during leave or a rest period in accordance with a written law.
Either party can terminate a contract by serving a notice or paying in lieu thereof. According to the Employment Act, the notice period for terminating an oral employment contract is as follows, unless an agreement specifies a longer notice duration:
- 1 day (24 hours) when the contract is for a period of less than a week;
- 14 days when the contract is a daily contract under which wages are payable at intervals not exceeding 1 month (and not on daily basis); and
- 30 days when the contract is for a period of one week or longer
Notice to terminate the contract may be written or oral and may be given at any time.
In the case of economic dismissals/redundancies, the employer has to provide notice of at least 30 days to the employee representative on impending redundancies and inform the representative of the number of employees affected by redundancy and the time period during which such contract termination would be carried out.
Source: §49-53 of the Employment Code Act, 2019
Severance Pay
Severance Pay is defined under the Employment Code Act of 2019 as “wages and benefits paid to an employee on contract termination.” The Act provides for severance pay in the following cases:
- Termination of employment contract of a fixed duration: at least 25% of the employee’s basic pay earned during the contract period;
- Termination of employment due to redundancy: 2 months’ basic pay for each completed year of service;
Employee’s death in service: 2 months’ basic pay for each completed year of service;
Medical discharge: at least 3 months’ basic pay for each completed year of service.
Source: §38(6) and 54 of the Employment Code Act, 2019
Related Items
Contracts and DismissalsNotice Requirement
A worker is entitled to a termination notice or payment in lieu of notice, except in cases of gross misconduct. The notice period is generally specified under the employment contract. If it is not clearly provided under the contract of employment, the minimum duration is 24 hours for a contract of employment not exceeding one month; 14 days for a contract of employment ranging between one to three months; and 30 days for a contract of employment of more than three months. The notice to terminate a contract of employment of more than six months shall be in writing.
An employer is prohibited from giving termination notice during a period of leave taken under this Act, or which runs concurrently with any period of leave taken under this Act. The employer may pay in lieu of notice where a termination notice is not served. If a worker refuses to work during the notice period, the employer may deduct from any money due to the employee on termination the amount that would have been due to the employee if the employee had worked during the notice period. Task-specific contracts as well as time-specific contracts terminate on the completion of the task and expiry of the fixed period, respectively, without any need for a termination notice. Probationary contract can be terminated on a 24-hour notice.
Where an employer intends to terminate a contract of employment by reason of redundancy, the employer must give notice of at least 30 days to the employee or a representative of the employee of the impending redundancy and inform the representative on the number of employees (if more than one to be affected) and the period within which the termination is intended to be carried out;
The employment contract can be written or oral. The oral employment contract terminates at the end of the notice period, and no specific grounds are required for its termination. However, specific procedural requirements are followed in case of summary dismissal and redundancy, as provided by the law. The written employment contract terminates by the expiry of the term for which it is expressed to be made; or by the death of the employee before such expiry; or in any other manner in which a contract of service may be lawfully terminated or deemed to be terminated, whether under the provisions of this Act or otherwise. In case of sickness or accident, due to which an employee is unable to fulfil a written contract of service, the contract may be terminated on the report of a registered medical practitioner.
Where a contract is terminated at the initiative of the employer, the employer is required to give reasons to the employee for the termination of employment. An employment contract cannot be terminated unless there is a valid reason for termination connected with the worker’s capacity or conduct, or the operational requirements of the undertaking. The following have been specified as reasons for unfair dismissals:
- Union membership or participation in union activities outside working hours or within working hours with the consent of the employer;
- seeking office as an employees’ representative;
- the filing of a complaint, the participation in proceedings against an employer involving alleged violation of laws or recourse to administrative authorities;
- race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion or affiliation, ethnicity, tribal affiliation or social status of the employee; or
- absence from work during leave or a rest period in accordance with a written law.
Either party can terminate a contract by serving a notice or paying in lieu thereof. According to the Employment Act, the notice period for terminating an oral employment contract is as follows, unless an agreement specifies a longer notice duration:
- 1 day (24 hours) when the contract is for a period of less than a week;
- 14 days when the contract is a daily contract under which wages are payable at intervals not exceeding 1 month (and not on daily basis); and
- 30 days when the contract is for a period of one week or longer
Notice to terminate the contract may be written or oral and may be given at any time.
In the case of economic dismissals/redundancies, the employer has to provide notice of at least 30 days to the employee representative on impending redundancies and inform the representative of the number of employees affected by redundancy and the time period during which such contract termination would be carried out.
Source: §49-53 of the Employment Code Act, 2019
Severance Pay
Severance Pay is defined under the Employment Code Act of 2019 as “wages and benefits paid to an employee on contract termination.” The Act provides for severance pay in the following cases:
- Termination of employment contract of a fixed duration: at least 25% of the employee’s basic pay earned during the contract period;
- Termination of employment due to redundancy: 2 months’ basic pay for each completed year of service;
Employee’s death in service: 2 months’ basic pay for each completed year of service;
Medical discharge: at least 3 months’ basic pay for each completed year of service.
Source: §38(6) and 54 of the Employment Code Act, 2019
