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August 25, 2022

Important Things to Consider During Termination of Employment Contract

1. GENERAL INTRODUCTION

Have you been wondering what does is mean when someone is terminated from employment or dismissed from their job? Termination simply happens when an employee's job ends. There are two types of job terminations a voluntary termination or involuntary termination.

Voluntary Termination: Voluntary termination is normally by employee and it includes resignation or retirement.

Involuntary Termination: Involuntary termination happens when an employee is terminated by employer. Employees can be terminated for cause. In that case, an employee is fired or dismissed from their job. Employees can also be laid-off when there is no work available for them.

Some common reasons for dismissal include poor performance or incompetence, attendance problems, and insubordination or other behavioural problems. Misconduct, or termination for cause, is another common reason for a dismissal. This is when employees are let go because of ethical issues, such as lying, falsifying information, stealing, fraud or other major misconduct in the workplace.

Labour Laws in Tanzania were enacted specifically for protection of employer and employee’s rights. However, in practice, employees seem to be the ones mostly injured by the employer’s acts and omissions during termination when it is done unfairly. The law provides that it is unlawful for an employer to terminate the employment of an employee unfairly.

2. WHAT AMOUNTS TO UNFAIR TERMINATION OF EMPLOYMENT IN TANZANIA?

In order for employment termination to be fair in the eyes of the law, there must be an existence of substantive and procedural fairness. The law provides that, termination of employment is unfair if the employer fails to prove that he had valid and fair reasons to do so and that he did it in accordance with the fair procedure.

The law goes further by stating what amount to unfair reasons for employment termination including reasons related to pregnancy, disability, any type of discrimination, exercises any right conferred by agreement or the law, and refusal to do anything that an employer may not lawfully require the employee to do.

Labour laws clearly provide for procedures to be followed in terminating an employment. However, procedures for termination are different depending on the reason for termination but they all have common point – the right of an employee to be heard before a termination decision is taken against an employee. This means in the whole procedure the rules of natural justice must be observed.

Fair reason for termination refers to the reason related to the employee’s conduct, capacity, or compatibility or based on the operational requirements of the employer. Termination of employment will only be valid if procedures for termination were well complied with by the employer-backed up with a valid reason for termination.

3. CLAUSES OF EMPLOYMENT CONTRACT RELATING TO TERMINATION

Where a written agreement provides for the procedure of its termination, the employer and the employee must comply with those clauses.

Where termination contravenes the clauses of the contract of employment then such termination is rendered unfair hence illegal. However, if the contract of employment contains no clauses relating to termination of employment, then the employer has to observe and act according to the labour laws of the land.

4.NOTICE OF TERMINATION

The employment contract has to be terminated by notice as per the provisions of the law. The period of notice should not be less than seven days, if notice is given in the first month of employment.

If the notice is to be given after the first month of employment, then the notice should not be less than four days if the employee is employed on a daily or weekly basis; or 28 days if the employee is employed on a monthly basis.

The employer and the employee may agree for a notice period that is longer than the ones provided; the agreed period is of equal duration for both the employer and the employee. Further, the notice must be in writing stating the reasons for termination and the date on which the notice is given.

However, the notice shall not be issued during any period of leave taken under the Act, or to run concurrently with any such period of leave. The law allows the employer to pay the employee a remuneration that the employee would have received if the employee had worked during the notice period instead of giving an employee notice of termination. If the employee refuses to work during the notice period, then the employer may deduct, from any money due to that employee on termination, the amount that would have been due to the employee if that employee had worked during the notice period.

5.CONCLUSION

Now, in order to determine whether the contract of employment is terminated fairly, the test is to look at whether there was a fair and valid reason for the termination (substantive fairness), relating to the capacity or conduct of the worker, or based on the operational requirements of the undertaking establishment or services. Again, whether there was a fair procedure for termination of employment contract in respect to the specified reason for termination (procedural fairness), as required by the Employment and Labour Relations Act (Cap 366 R.E 2019).

Moreover, it should be noted that, principles of natural justice are of paramount importance to be observed in the whole process of termination of an employment contract. That is due to the reason that the right of an employee to be heard must be fully exercised before making any decision that relates to an employee’s employment.

DISCLAIMER: This article has been prepared for general information on matters of interest to our clients and any other readers. It does not constitute legal opinion or professional advice in any way. We are ready to provide specific technical advice to anyone who contacts the firm directly for any enquiries. You should not act upon the information contained in this article without obtaining specific professional advice and guidance from a legal practitioner. No representation or warrant (express or implied) is given to the accuracy or completeness of the information contained in this article. Hecon Associates does not accept or assume any liability, responsibility or duty of care for any consequences or inconvenience for any consequences of you or anyone else acting or refraining to act, in reliance on the information contained in this article or any decision based on it.

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