Notice and Severance
Notice Requirement
Either party can terminate a contract by serving a notice. The employer is not allowed to terminate the employee without just cause. The employer must comply with the employment code or model code while terminating; otherwise, the dismissal is considered unfair.
According to the Labour Act 1985, the notice period depends on the period of contract as follows:
- 3 months in the case of a contract without limit of time or a contract for a period of two years or more;
- 2 months in the case of a contract for a period of one year or more but less than two years;
- 1 month in the case of a contract for a period of six months or more but less than one year;
- 2 weeks in the case of a contract for a period of three months or more but less than six months;
- 1 day in the case of a contract for a period of less than three months or in the case of casual work or seasonal work
During the probationary period, the notice for contract termination, given by either party, may be one week (in the case of causal or seasonal work) and two weeks (for other types of employment).
Under a July 17 2015 Supreme Court ruling, employers now have the right to terminate an employment contract by just giving the employee a three month-notice period, without any retrenchment costs. This has led to a wave of dismissals. The Zimbabwean Parliament is contemplating on making amendments in the Labour Act and requires employers to terminate a contract of employment on three grounds: for disciplinary reasons in terms of a code of conduct; if the employer and employee agree; or if the employee has been engaged on a fixed-term contract for a specified task. If none of these three reasons apply, the employer has to go through a formal retrenchment process.
Source: §12(4 & 5) of the Labour Act 1985
Severance Pay
In accordance with the Labour Act, severance pay is available only for collective dismissals for economic reasons, i.e., retrenchment.
Section 12C of the Labour Act (as amended in 2015) prescribed a minimum package of 1 month’s salary for every 2 years of service (i.e. 2 weeks per year). No detailed regulations existed on the process. This amount is further raised under the Labour (Retrenchment) Regulations, 2024, which set the minimum retrenchment package at 1 month’s salary/wages for every year of service (or proportion), hence doubling the old minimum.
Under the Labour Amendment Act 2023, section 12C redefines “retrenchment” and introduces the concepts of minimum retrenchment package and enhanced retrenchment package, plus “capacity to pay”.
An employer intending to retrench must give 14 days’ written notice to the works/employment council, Retrenchment Board and affected employees, with details of employees and reasons, and must consult/negotiate any package better than the minimum.
The employer must notify the Retrenchment Board of any agreed package or, failing that, payment of the minimum package as provided under the 2024 regulations. The Board issues a notification certificate confirming compliance.
If employees allege non-payment, they can obtain a non-compliance certificate from the Board and then enforce the package in the Labour Court, which treats the certificate as a liquid document and whose order can be registered and enforced like a civil judgment.
Where an employer claims incapacity to pay the full minimum package, they must pay at least 25% and apply to the Employment Council/Retrenchment Board for exemption; the decision can be appealed to the Labour Court.
Employees or unions may also apply for an enhanced package where they show the employer has the capacity to pay more; the Board/employment council can order an enhanced package after requiring disclosure of audited financial statements, with a right of appeal.
Although the Retrenchment Board fixed the severance pay differently depending on the ability of the organisation to pay, the most usual is 03 months’ pay for one year of service.
Source: §12(C & D) of the Labour Act 1985
