Termination of Employment

All about Termination of Employment, Labour Laws and Termination of Employment, Employers and Employees and Termination of Employment and more on AfricaPay Tanzania.

Termination of employment means ending the employer-employee relationship between an employer and employee. Termination of employment can be initiated by any of the parties to a contract of employment. Lawful termination of employment under common law includes:

  • Termination of employment by agreement: When the employer and employee agree to bring a contract of employment to an end in accordance with an agreement. For example, if there is a contract for a period of one year and the agreed period expires then the contract will obviously come to an end.
  • Automatic Termination: A contract of employment may be terminated automatically in circumstances such as death or loss of business of the employer.
  • Termination of employment by the employee/Resignation: This happens when an employee due to material breach of the contract by the employer decides to resign from her employment.
  • Termination of employment by an employer: An employer may also terminate the employment of an employee but there is a need to comply with the provisions of the law and contract relating to termination. 

Can I terminate an employee because I do not like her/him?

No. Under the law there are four grounds that may justify termination of the employment by the employer and these are:

  • Misconduct
  • Incapacity
  • Incompatibility
  • Employer’s operational requirements/retrenchment. 

An employer may also terminate an employee due to participation in an illegal strike. Therefore for an employer to terminate an employee he/she should have a genuine reason falling under the above-mentioned grounds of termination. An employee cannot be fired because an employer does not like them - unless the grounds for this dislike are based on the above-mentioned factors, such as misconduct etc.

What amounts to Fair Termination of Employment?

In order for termination to be fair in the eyes of the law it has to be both substantively and procedurally fair. The employer needs to have a valid and fair reason for termination. 

Apart from this valid reason of termination the employer must follow fair procedures for termination as are provided under the Employment and Labour Relations Act, 2004 and The Employment and Labour relations (Code of Good Practice) Rules, 2007. The procedures for termination are different depending on the reason for termination but they all have a common item - the right of an employee to be heard before a termination decision is taken against an employee.

Am I to follow the procedure for termination even in cases where an employee is caught red handed committing a serious misconduct, for example stealing?

Regardless of the seriousness of the offence committed by the employee and regardless of the fact that you have reliable evidence, it is mandatory to follow the procedures outlined under the law. Failure to follow the procedure will amount to summary dismissal, meaning an employee is terminated without being availed of an opportunity to defend herself/himself before a fair disciplinary committee. Unless an employee has confessed to the commission of the offence then it is mandatory to hold a disciplinary hearing. 

With summary dismissal, an employee does not have a chance to present their case before termination. In labour laws this can amount to unfair termination. There are several consequences of unfair termination.

Can I terminate an employee who is facing a criminal charge before a court of law?

No one can terminate or take disciplinary action against an employee who is facing the same charges before a court of law unless the two charges are different or do not arise in the same cause of action. 

What are the likely consequences of unfair termination for an employer?

If the Commission for Mediation or Arbitration or Labour Court rule out that a termination is unfair it may order the employer to: 

  • Reinstate the employee from the day he/she was terminated without loss of remuneration. Meaning the employee will have to be remunerated as if he/she has been employed for the whole period that he/she was absent due to termination. When an Order for reinstatement is made but the employer does not want to reinstate or re-engage the employee, the employer shall pay compensation of twelve months wages in addition to wages due and other benefits from the date of unfair termination to date of final payment. 
  • Re-engage the employee on any terms that the Arbitrator or Court may decide. When an order for re-engagement is made but the employer does not want to re-engage the employee, the employer shall pay compensation of twelve months wages in addition to wages due and other benefits from the date of unfair termination to date of final payment. 
  • Compensate the employee with not less than twelve months’ remuneration. An order for compensation shall be in addition to and not a substitute for, any other amount to which the employee may be entitled in terms of any law or agreement.

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