Retirement, retrenchment and employment contract termination: A termination of an employment contract brought about by statutory retirement is fair. This is because statutory retirement is in substance approved by both the employer and employee before the contract takes effect or, if there are subsequent amendments to the law regarding retirement, during the progress of the contract. Retirement is, therefore, expected by both the employer and employee before it happens. A termination brought about by retrenchment or downsizing may be fair or non-fair. It is likely to be fair if the employer could not possibly avoid it. It is likely to be non-fair if the employer could possibly avoid it and it somehow contradicts some or any of the provisions in the employees contract. After taking the above into account, what, therefore, commonly constitute fair termination of an employment are the following: (1) A termination of an employment contract by an employer according to the provisions of the contract and relevant law; (2) A termination of an employment contract brought about by a fair retrenchment or downsizing process; (3) A resignation approved an employer; and (4) A termination of an employment contract brought about by statutory retirement. An employee who leaves the employ of their employer following a fair termination is entitled to statutory severance pay. There is no additional compensation or damages they are entitled to. Any benefits additional to statutory severance pay that they may be entitled to may be of a contractual or ex gratia nature.
Posted on: Thu, 26 Jun 2014 07:11:34 +0000