Employment Law - Termination - Dismissal
INTRODUCTION
Termination and Dismissal are common phrases
used in Employment Law that have been used interchangeably even by some judges,
however, the two words carry different meanings but one underpinning factor
between them is that they both refer to the cessation or ending of the
employment relationship between an employer and an employee. Therefore, the
difference becomes apparent when understanding the reason or the manner in
which the employment relationship came to an end. As shall be noted below,
dismissal refers to the cessation of an employment relationship following a
disciplinary action while termination is way an employment relationship ends
without any disciplinary actions invoked.
DISMISSAL
The distinction between termination and
dismissal was exceptionally provided in the case of Redrilza Limited v Abuid Nkazi and Others,[1]
the Supreme Court as per Muyovwe J stated:
“It is apparent, that the court, in its judgement used the term ‘dismissal
and ‘termination’ interchangeably. This should not have been so, especially
that the respondents were not dismissed from employment, but their services
were terminated by way of notice”
Here,
the Supreme Court emphasized that the words ‘termination’ and ‘dismissal’ hold
different meaning in Employment Law and thus, must not be used to mean the same
thing. The Supreme Court went on to provide a succinct difference between the
two by holding the following:
“There is a difference
between ‘dismissal’ and ‘termination’ and quite obviously the considerations
required to be taken into account, vary. Simply put, ‘dismissal’ involves loss
of employment arising from disciplinary action, while ‘termination’ allows the
employer to terminate the contract of employment without invoking disciplinary
action.”
As
correctly put in the case, dismissal relates to a situation where an employee
losses their employment based on disciplinary reasons, put otherwise, dismissal
is when the employee is fired.
Dismissal
may affect the dismissed employee’ prospects of future employment and generally
it may have an adverse effect on their reputation, as such, in order to protect
an employee from unwarranted dismissals, the law provides for grounds on which
an employee may be dismissed and also provides the manner in which dismissal
may be effected[2],
therefore, dismissal effected contrary to the said statutory provisions will be
deemed either unfair, wrongful, or unfair and wrongful. The Employment Code Act
under section 52 (2) provides for only there (3) grounds on which an employee
may be dismissed and/or terminated. The section reads:
“52 (2) An employer shall
not terminate a contract of employment of an employee without a valid reason
for the termination connected with capacity or conduct of the employee or bases
on operational requirements of the undertaking.”
The
first thing to understand from the foregoing is that; an employer is mandated
to give an employee a valid reason to why they are being dismissed. Secondly,
the reason given to the employee to why they are being dismissed must relate to
the following grounds: (i) an employee’s capacity (ii) an employee’s conduct.
The third ground, (iii) operational requirements of the job, is a ground for
termination and not dismissal
(i)
Dismissal Relating to Capacity
As
observed, an employee may be dismissed due to their capacity to work. capacity
relates to an employee’s capability, ability, competence, proficiency (or
anything alike) to deliver or carry on with their employment duties. Essentially, this may encompass the
employee’s poor performance, an employer is not expected to retain an employee
whose performance is below that which is expected by the employer[3].
(ii)
Dismissal Relating to Conduct
It
is important to note that it the employee’s misconduct that invites dismissal.
On that basis, dismissal relating to conduct essentially means an employee
being dismissed due to behaviour amounting to misconduct by the employee. What
amounts to misconduct is not clearly provided by the Employment Code Act,
however, in Stockdale v Woodpecker Inn Limited and Spooner,[4]
the employee employed as a bar attendant sold their own alcohol at the
expense of the employer’s own alcohol. The employee was accordingly dismissed,
when the matter went to court, the High Court stated that where an employee
does anything which is incompatible with the due and faithful discharge of
[their] duty, the employer has a right to dismiss [them]. The High Court’
holding suggests that an employee may be dismissed accordingly when they do
somethings against that which goes to the heart or core of the employment
contract.
To
understand this point more, in Standard Chartered Bank v Celine Meena Nair[5]
the court of appeal held that an employment relationship has an implied term of
good faith and trust, these two qualities go to the heart of the employment
relationship. This was further re-affirmed in Chimanga Changa Limited v Stephen
Chipango Ngombe[6]
where the Supreme Court mentioned:
“… an employment
relationship is anchored on trust and once such trust is eroded, the very
foundation of the relationship weakens.”
From
the foregoing judgements, the author submits that an employee’s conduct would amount
to misconduct where they engage in conduct that breaches or breaks the trust,
respect, and good faith between them and the employer. This includes but not
limited to; dishonesty, disobedience to lawful and reasonable instruction from
their employer, insubordination, absenteeism from work, disrespectful behaviour
towards the employer such as use of vulgar language at an undertaking. To support the authors assertions, in Liswaniso
Sitali and Others v Mopani Copper Mines Plc,[7]
the Supreme Court held that an employer is justified in dismissing a
dishonest employee. Dishonesty without a doubt amounts to misconduct,
therefore, conducts relating to dishonesty would also warrantee dismissal, such
as: theft, wilful deceit, to mention a few.
The
forgoing relates to grounds or reasons upon which a dismissal must be based on.
The Employment Code Act also provides for a manner or a process albeit not
specifically standardized. Section 52 (3) provides:
“an employer shall not
terminate the contract of employment of an employee for reasons related to an
employee’s conduct or performance, before the employee is accorded an
opportunity to be heard.”
From
the above, it is clear that following an employee’s reason to dismiss an
employee based on their (mis)conduct or (in)capacity, the employee must be
given the chance to be heard. The procedure to follow is not provided with
specific details, however, in Attorney General v Chilosha[8]
the Supreme Court was at pains when emphasizing that an employee being
dismissed for misconduct or their incapacity must be charged and given an
opportunity to exculpate themselves. It therefore follows that wat suffices is
that an employer gave the employee an opportunity to answer to the allegations
laid against them.
TERMINATION
As
already pointed out by the Abuid Nkazi case, termination ‘allows the employer
to terminate the contract of employment without invoking disciplinary action.’
Indeed, there may be circumstances where the employment relationship comes to
an end without any wrong-doing committed by either the employee or employer.
Section 52 (1) of the Employment Code Act provides:
“52 (1) A contract of
employment terminates in the manner stated in the contract of employment or in
any other manner in which a contract of employment is deemed to terminate under
this Act or any other law, except that where an employer terminates the
contract, the employer shall give reasons to the employee for the termination
of the employee’s contract of employment”
The
provision allows an employment relationship to terminate in the manner provided
or agreed by the parties. However, the Employment Code Act provides that when
terminating an employee, they must be furnished with a valid reason, the reason
that apply to dismissal as already provided above apply to termination as well.
(iii)
Termination Relating to Operational
Requirements of the Undertaking
Operational
requirements are not defined in the Employment Code Act. Basically, operational
requirements refer to economical, technological, structural or similar needs of
the employer. An employer’s enterprise is not expected to stay the same
forever, due to constant change in society generally, the employer must have
leeway to adopt and add changes to their structure. Therefore, this follows
that where an employer makes changes to their enterprise in order to meet
business needs or increase efficiency, and in doing so, it becomes apparent
that an employee cannot be sustained, the employer may terminate the employee’
contract.
Lord
Denning emphatically held in Lesney Products Limited v Nolan[9] that:
“…it is important that
nothing should be done to impair the ability of employers to reorganise their
work force and their terms and conditions of work so as to improve efficiency.”
From
the forgoing, an employer is justified when terminating an employee’ contract
after making structural changes in order to better their enterprise or
business.
There
are several ways in which an employment relationship may terminate, this
writing will only consider; termination by with notice, termination by pay in
lieu of notice, and mutual agreement.
(i)
Termination with Notice
Section
53 (1) of the Employment Code Act provides
“53 (1) An employee whose
contract of employment is intended to be terminated is entitled to period of
notice, or compensation in lieu of notice, unless the employee is guilty of
misconduct of a nature that it would be unreasonable to require the employer to
continue the employment relationship”
The
above provision allows for termination with notice. This essentially means that
an employee must be given prior notice that their service will be terminated, a
notice informs the employee that their service will be terminated at a
specified future date, they employee however continues to work and be paid
during that period. This prevents an employer from terminating the services of
an employee arbitrary hence speaking to job security, it also provides the
employee with ample time to seek another job[10]. The notice period may be
agreed by the employer and employee, however, section 53 (2) provides for
minimum standards as follows:
-
An employee on a contract not exceeding
one (1) month must be given at least twenty-four (24) hours’ notice.
-
An employee on a contract of more than one
(1) month but not exceeding three (3) months must be given at least fourteen
(14) days’ notice
-
An employee on a contract of more than
three (3) months must be given thirty (3) days’ notice, and the notice must be
in writing.
(ii)
Termination in Lieu of Notice
This
is also another way of termination the employment contract of an employee
provided by section 53. This basically means that an employer terminates the
employee with immediate effect but pays them their wages due over the notice
period. Here, the employer instead of allowing the employee to see out their
notice period, pays the employee their wages which they would have received had
they worked over the notice period. In Zambia Consolidated Copper Mines v James
Matale[11]
the Supreme Court held that:
“Payment in lieu of
notice is a proper and unlawful way of terminating the respondent’s contract on
the basis that in the absence of express stipulation every contract is
determined by reasonable notice.”
The
Supreme Court upheld termination in lieu of notice as a valid mode of
termination the services of an employee. However, what must be observed is that
where an employer opts to use this this mode of termination, they must give the
employee all remunerations they would have received had they worked through the
notice period. This was also held in Development Bank of Zambia v Dominic Mambo[12].
(iii)
Mutual Agreement
Just
as an employment relationship begins by agreement, similarly it may end by
agreement. Cognizance must be drawn from the fact that section 52 (1) gives licence
to the parties to agree on how their employment relationship will end,
therefore, where parties mutually agree to separate or part ways, it shall be
regarded as mutual termination of the employment contract.
The
foregoing is confirmed in Birch and Humber v the University of
Liverpool,[13]
the Court held that:
“In a case where [the
contract of employment] has been terminated by such mutual agreement, it may
properly be said that the contract has been terminated by both the employer and
employee jointly”
Other
modes of termination include; expiration by effluxion of time, expiration due
to death.
In
summation, while dismissal and termination both refer to the cessation of the
employment relationship between an employer and employee, their distinction is
seen by the manner in which the employment relationship came to an end.
Dismissal refers to a situation where an employee loses their employment based
on any or all of the reasons provided by section 52(2) and following a
disciplinary action while termination refers to a situation where an employee
loses their employment based on the reasons outlined in section 52(2) though,
disciplinary actions are not invoked. Dismissal and termination is unfair if
the dismissal or termination was done without a valid reason justifiable by law
while dismissal or termination is wrongful if the dismissal or termination was
made without due process (according the employee a fair hearing).
[1]
(2011) SCZ 7
[2] W,
S. Mwenda. C, Chungu, A Comprehensive Guide to Employment Law In Zambia. (UNZA
press, University of Zambia, 2021)
[3]
Ibid
[4]
(1967) HC ZR 128
[5]
(2019) CAZ 14
[6]
(2010) S.C.Z. 5
[7]
(2004) Z.R 176 SCZ
[8]
(2019) ZMSC 338
[9]
[1977] ICT 235 CA
[10] W,
S. Mwenda. C, Chungu, A Comprehensive Guide to Employment Law In Zambia. (UNZA
press, University of Zambia, 2021)
[11]
(1997) Z.R. 157 SCZ
[12]
(1995) SCZ 13
[13]
[1985] EWCA Civ 8
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