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Nikita Pillay - Terminating an employee’s service

Terminating an employee’s service

While there are many reasons for wanting to terminate an employee’s employment services with a company, South African law demands for due process to be followed, irrespective of the reasons and circumstances that have led to wanting this outcome.

Justifiable reasons are a must, and sufficient proof needs to be presented, before a conclusive decision is reached. Each case is based on its own merits, and outcomes are generally dictated by a chairperson after following due process, unless agreed upon consensually via a Mutual Termination between both parties, to conclude the employment relationship.

Recruitment and Selection

Many organisations undermine the recruitment and selection process. As much as this process involves interviews, and selection of the most ideal candidate, additional areas are entailed in order to select the right candidate.

The process should include tools that form part of the selection criteria, to determine the employee’s compatibility with the position and the team with whom the candidate will be working. Such tools may include a Personal Development Assessment (PDA), which analyses the right f it and behavioural aspects. Thorough background checks and research are key components to discovering an employee’s prior work history and reputation. Many organisations choose to bypass these key qualifying processes, hence leading to issues shortly after confirming the employee’s placement within the organisation.

Inducting an Employee

Companies fail to realise the importance of inducting an employee correctly. This is the reason for employers assuming incompetence of an employee, hence wanting to terminate the employees’ services. Importantly, an employee should be inducted correctly so as to understand the company’s values, vision, processes, procedures, timelines, systems, and support structure. A clear handover needs to be done and signed off if the employee is replacing an employee that is exiting the business.

Businesses are careless when blaming new employees on failing to perform to standard. However, if an induction and orientation process was not followed, this is an indication of a lack of engagement with the employee, hence the employee was bound to fail.


There is a misconception that an employee can be terminated immediately whilst serving probation, without any process being followed. The purpose of a probationary period is for the employer to provide support and training to a new employee at the commencement of employment, and to evaluate an employee’s work performance over a reasonable, mutually agreed-upon period of time.

Meetings need to be documented, with the issues of non-performance and an action plan and time frame for improvement being noted. Should there still be a lack of performance after providing sufficient time for improvement, then the employer would have already collected sufficient supporting evidence to indicate such. An employee can be performance managed at any point during their employment, especially if new tasks have been allocated, or a change in job required. Many fail to understand that probation is for the benefit of the employee to learn the work.

The time is provided by the business to the employee to become proficient in the duties required. There are no benefits for the employer, besides to make sure performance is documented and addressed during this time with the employee.

Performance Management

Knowing the difference between misconduct and poor performance is important. Confusing the two could mean your approach is completely wrong. The main difference is in the level of control. Poor performance is when an employee tries as hard as possible but keeps falling short because they lack skill, ability or training for example. In cases of misconduct, the employee could perform better but for whatever reason chooses not to. To performance manage an employee, the meeting must place in private and in an environment that is comfortable and non-threatening, away from distractions and interruptions.

The employer should begin by holding a discussion with the employee to explain the problem in specific terms. From this conversation, the employee should be able to clearly understand what the problem is, why it is a problem, how it impacts on the workplace, why there is a concern, etc.

The employer should discuss the outcomes they wish to achieve from the meeting. The meeting should be an open discussion and the employee should have an opportunity to have their point of view heard and duly considered.

The employer should listen to the explanation of why the problem has occurred or to any other comments the employee makes. Timelines and action plans for improvement should be set. When having this type of meeting, facilitating discussion to refer to recent positive things that the employee has done to show them that you also recognise and appreciate their strengths may be useful.

Mutual Separation / Termination Agreement

A Mutual Termination is an agreement between employee and employer, to consensually terminate the employment relationship. In certain situations, parties can agree that the employment relationship come to an end, however parties choose not to resign or go through any disciplinary process, hence they mutually elect to terminate via a mutual separation agreement (MSA) to cease the existence of the employment relationship.

This is an option to explore as opposed to having to go through any disciplinary action or performance management process. A financial settlement is agreed upon and documented in this agreement. Any other consensually agreed terms and conditions are also implied, and this document stands as legal and binding as per the terms stated therein.


Retrenching employees must be done purely for the reasons that retrenchment was designed. A retrenchment is normally seen as a consultative and problem-solving exercise to try to accommodate employees.

There are a few main reasons to terminate via retrenchment (after following due process), which is for operational changes within the organisation, or incapacity based on performance or ill-health. We need to make sure that all correct steps are followed whichever process is decided upon. Being in breach of procedure is viewed extremely seriously at the Commission for Conciliation, Mediation and Arbitration (CCMA).

Gaining a good understanding to be able to execute effectively and meaningfully with no loopholes is always good.

T: +27 (0)31 767 0625


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