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Labour Matters Davies Ndumiso Sibanda
MANY employers think they can terminate employment contracts of employees in any way they want resulting in litigation that ends up being very costly for employers.

While the right to discipline employees rests with the employer, the right is regulated as all dismissals have to be in line with provisions of section 5 of the national employment code of conduct. Strictly speaking the provisions of section 5 should be in the principal act as they regulate all terminations of employment.

The law states that no employer shall terminate a contract of employment unless the termination is in terms of an employment code which is registered in terms of section 10-1(1) of the Act. Only two types of codes of conduct can be registered in terms of section 101 (1), these are the NEC code of conduct and in-house code of conduct. Where there is an NEC code of conduct and in-house code of conduct, the in-house code of conduct supersedes the NEC code of conduct.

Simply put where an organisation has in-house code of conduct it is unlawful to use the NEC code of conduct.

Secondly the law states that where there is no applicable NEC or in-house code of conduct then terminations should be in terms of the national employment code of conduct. This is the famous statutory instrument 15 2006.

A legal question arises where there is an NEC code of conduct but the employees are not members of the NEC. Should the NEC code of conduct be extended to parties? There is no case law related to this question and NEC have handled cases from non-members who are covered by the industry NEC. I am of the view that where the NEC is a voluntary body, its code of conduct cannot be legally extended to no-members. As such the Labour Act violates the Constitution rights related to freedom of association in terms of the new Constitution. This thinking still has to be tested in the Constitutional court or might be addressed when the Labour Act is aligned to the Constitution.

The third method of terminating employment is where the employer and the employee mutually agree to terminate the contract in writing. The key terms are that the termination must be seen to be reasonable by a reasonable person and it must be in writing.

The fourth way to terminate a contract is at the expiry of a fixed term contract which can be for a fixed duration or for the performance of a specific task and the task has been completed. Complexities related to the fixed term contracts in terms of section 12 B of the Labour Act have however to be addressed, otherwise the contract might remain alive even after employer has extinguished it.

There are other ways of terminating contracts such as compulsory retrenchment, resignation and death. The bottom line is that for disciplinary purposes only three types of codes of conduct can be used and the choice of code to use does not rest with the employer but it’s prescribed. In-house unregistered codes of conduct cannot be used in discipline handling. Further a matter started in terms of a particular code of conduct should be concluded using that particular code of conduct.

In conclusion employers need to know the applicable code of conduct and its procedures and also be trained in its application so as to avoid making material procedural errors.