Code of Good Practice: Termination of Employment




1.1. This code is published in terms of Section 109 of the Industrial Relations Act.

1.2. This Code of Good Practice deals with some of the key aspects of termination of employment. It aims to summarise some of the provisions of the law and provide guidelines on applying the law.

1.3. This Code intends to assist-

3.1.1 employees and their staff associations and trade

3.1.2. employers and their employer organizations; and
3.1.3. Conciliators, arbitrators and judges.

1. This Code has been drafted in accordance with the Employment Act and Industrial Relations Act and proposed 2002 amendments to those Acts. The Code will have to be checked once the proposed amendments are finalised, to ensure that the Code correctly reflects the law.
1.4. The guidelines in this Code may be departed from if there is good reason to do so. Anyone who departs from them must prove the reasons for doing so. The following kinds of reasons may justify a departure from the provisions of the Code. Note that this list is not exhaustive.

1.4.1. the size of the employer may justify a departure.
For example, an employer with a small number of
employees may not be required to comply with all the procedural requirements of this code, but that employer must, nevertheless, give an employee a fair opportunity to respond to any allegations before taking a decision affecting that employee’s rights.

1.4.2. the nature of the employer’s business may require stricter adherence to rules that may normally be the case. For example a single breach of health and safety rules in a dangerous working environment may justify more serious disciplinary action than may otherwise be the case.

1.4.3. collective misconduct may justify a departure from the ordinary procedural rules provided that the employees are given an opportunity to answer any charges against them.

1.5. To the extent that this Code advances an interpretation of the law that interpretation is the policy of the Minister and should be applied by conciliators and arbitrators unless that interpretation is reversed by a decision of the Industrial Court.

1.6. The provisions of this Code may be varied by a collective agreement provided that no collective agreement may remove a statutory right.

1.7. A key principle in this code is that employers and employees should treat one another with mutual respect, bearing in mind the objectives of both employment justice and the efficient operation of business. While employees should be protected from arbitrary or other unfair action, employers are entitled to satisfactory conduct and work performance from their employees.


2.1. The rules that regulate the termination of a contract of employment may depend on the duration of the contract. There are two kinds of agreed duration.

2.1.1. an agreement to work for a fixed terms. A fixed term may be for a specified period (for example 6 months) or may be determined by a specified event (for example, the completion of building, a bridge or a road). A fixed term contract normally terminates automatically on the expiry of the period. Seasonal workers may be employed on a fixed term contract for a season, which normally terminates at the end of the season.
The failure to renew a fixed – term contract in circumstances when the employee reasonably expected continuity of employment may constitute a dismissal. For example, if an agricultural worker has been employed each year on a fixed term contract for a harvesting season, and this has continued for several years, that employee may have a reasonable expectation of ongoing employment in the next season. In these circumstances, the employer’s failure to renew the employee’s contract may constitute a dismissal.

2.1.2. an agreement to work for an unspecified period of time (normally up and until retirement). This kind of contract continued until it is lawfully terminated.

This means that it must be terminated fairly and on proper notice by either of the parties or for other reasons e.g. by agreement, death of the employee etc.