An employer may not dismiss an employee without a legally valid cause.
Dismissal may be based on personal grounds (e.g. disciplinary dismissal, dismissal due to professional inadequacy, dismissal due to incapacity) or economic grounds (e.g. economic difficulties, technological changes), or subject to specific conditions, without stating a specific motive.
The reasons for regular termination as set out in the Labour Act are as follows:
- if the need for work ceases to exist for economic, technical or organisational reasons (‘notice due to business reasons’); or
- the employee is incapable of fulfilling his employment-related duties due to certain personal characteristics or qualifications (‘notice due to personal reasons’); or
- the employee intentionally breaches a contractual obligation (‘notice due to misconduct’); or
- if the employee did not satisfy the employer’s requirements during the probationary period.
There are two broad regimes for dismissal:
- termination without cause; and
- summary dismissal for reason(s) attributable to the employee.
Where an employer wishes to terminate an employee’s contract without cause, he may do so by giving notice or by paying the employee his base salary in lieu of the notice period.
An employer can also, after due inquiry, summarily dismiss an employee for cause (e.g. as a result of employee misconduct) with immediate effect, i.e. without the stipulated notice period (referred to as “dismissal”). This results in immediate termination of the employment agreement. What amounts to misconduct is largely a question of fact, and generally the relevance and effect of the misconduct is judged with reference to its effect on the employer-employee relationship. The total accrued salary and any other sum due and payable to an employee who is dismissed must be paid either on the day of the dismissal or, if that is not possible, within three days, not including Sunday (or any such rest day as determined by the employer) or public holidays.
An employee who claims that he or she has been unfairly dismissed may file a wrongful dismissal claim (“dismissal claim”) with the Tripartite Alliance for Dispute Management ("TADM") within one month of his or her last day of employment. For managers and executives, a dismissal claim can only be made if they have worked for their employer for at least 6 months. There is no minimum service time period required for non-managers and non-executives filing dismissal claims. Dismissal claims will be referred to mediation at the TADM before adjudication by the Employment Claims Tribunal.
If a female employee has worked for an employer for at least three continuous months, the employee has statutory maternity protection against retrenchment and dismissal without sufficient cause.
Employers are not statutorily required to provide reasons for dismissal, in particular for dismissals with notice. If however the employer is terminating an employee for poor performance and dismisses the employee without notice, the failure to give reasons would amount to wrongful dismissal.