PROPER PROCEDURES ON TERMINATION OF

EMPLOYMENT

Prepared by Adv. Daniel Benno

Objective of the Programme
 The objective of this programme is to enable the participants to understand
the meaning and different forms of employment Termination, employment
life cycle and its stages, guidelines and Procedures on employment
termination as stipulated on the laws governing termination of employment
in Tanzania.
Coverage:
 Meaning of Termination of Employment
 Laws governing Employment Termination in Tanzania
 Forms of Employment Termination
 Guidelines and Procedures of Employment Termination
Termination of Employment
 Termination of employment may simply means end of employee contract with
the employer.
 Termination of employment can be initiated by any of the parties to
a contract of employment.
 Generally, the laws of Tanzania allow termination of employment. Either of
the parties to the contract of employment may terminate such a contact
provided she/he observes all duly stated reasons that justify termination and
prescribed procedures.
 Termination may be regarded as fair (when it is done as per the law) or unfair
when is done without following what the law calls for.
Laws governing Employment Termination
in Tanzania
The laws governing termination of employment contract in Tanzania are;
 The Employment and Labour Relations Act No. 6 of 2004 as amended from
time to time.
 The Employment and Labour Relations (Code of Good Practice) Rules, 2007
Forms of Employment Termination
contract in Tanzania
 Section 36 and 37 of the Employment and Labour Relations Act of 2004 and
Rules 4 to 25 of the Employment and Labour Relations (Code of Good Practice)
Rules of 2007 enumerate several forms of termination of employment
contract and each form has its procedure, its reason and resultant
implications.
 Forms of Termination of Employment
Contract cont….
According to the governing laws, Termination of Employment contract can be of
different forms as follows:
 Termination by Agreement-Rule 4 of Code of Good Practice Rules
 Automatic Termination-Rule 5
 Resignation-rule 6
 Constructive Termination-Rule 7
 Termination of Employment by employer-
Termination of Employment by
Agreement
 This when the employer and employee agree to bring a contract of
employment to an end in accordance with an agreement.
 This mechanism can be used only where the employee consents to
termination of employment.
 The vivid example is on a fixed term contract. In this contract the parties
agree in advance the date which the contract will end.
What should the Employer observe on
this form of Termination?
The law requires the employer to observe a number of things on termination of
employment contract by agreement. Such includes:
 The employer has to make sure that the employee does not continue working
when the fixed term contract has reached to an end failure to do so the
contract may be renewed by default
 The employer has to observe that failure to renew a fixed term contract in
circumstance where the employee expect renewal may amount to unfair
termination.
Automatic Termination of Employment
 A contract of employment may be terminated automatically in circumstances
such as death or loss of profession of the business (Sequestration-the act
seizing or taking possession of the property belonging to another and
holding it until the profits have paid the demands for which it was taken)
of the employer
 Unless the contract of employment provides otherwise, a contract of
employment may terminate automatically when the employee reaches the
agreed or normal retirement age
Resignation
 This is regarded as voluntary termination of employment contract by an
employee.
 Where an employee has agreed to a fixed term contract, that employee
may only resign if the employer materially breaches the contract.
 If there is no breach by the employer, the employee may lawfully
terminate the contract before the expiry of the fixed term by getting the
employer to agree to an early termination.
 Where there is an indefinite contract, the employee may resign-
-by giving a notice of termination or
-without notice, if the employer has materially breached the
contract
Resignation cont….
 A material breach means a serious breach that goes to the core of the
contract. Conducts which shall amount to a material breach of a contract
of employment and that may justify the summary termination of the
contract by the employee are-
(a) the refusal to pay wages:
(b) verbal or physical abuse or sexual harassment
(c) unfair discrimination: or
(d) any other breach
Constructive Termination of employment
contract
 This occurs in instances where the employer makes continued
employment intolerable in order for the employee to resign.
 In such instances the law refers this as forced/constructive termination
in the sense that it is as good as that the employer has terminated the
employee.
 Working conditions may be considered intolerable if for instance, the
employee is discriminated, harassed, suffering negative change in pay
or workload for reasons that are not performance based.
 Where it is established that the employer made employment intolerable
as a result of resignation of employee, it shall be legally regarded as
termination of employment by the employer.
Termination of employment by 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.
 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.
Grounds for Termination of Employment
by Employer
 There are several reasons by which a contract of employment may be
terminated by an employer.
 An employer shall follow a fair procedure before terminating an employee's
employment which may depend to some extent on the kind of reasons given
for such termination.
 The burden of proof lies with the employer but it is sufficient for the
employer to prove the reason on a balance of probabilities.
 The law describes the grounds (reasons) of termination and procedures to be
followed for each ground. These are as per Rule 9(4) of the Employment
and Labour Relations (Code of Good Practice) Rules, 2007 (GN No. 42,
2007) the reasons includes:
(a) Misconduct as per Rule 11 and 12
(b) Incapacity as per Rule 15
(c) Incompatibility as per Rule 22
(d) employer's operational requirements (Retrenchment) as per Rule 23
Termination of employment due to
misconduct
 Misconduct is doing something which is against the law or which is contrary to
the Employer’s policy and codes of conducts.
 All employers are required to implement disciplinary policies and it
procedures that establish the standard of conduct required of their employees
 An employer's rules in the application of discipline and standards of conduct
shall be made available to the employees in a manner that is easily
understood
 The misconducts are categorized into those punishable by warnings or
reprimand on initial commissions according to the levels and those punishable
by termination of employment on first commissions.
Termination of employment due to
misconduct
 First offence of an employee shall not justify termination unless it is proved
that the misconduct is so serious that it makes a continued employment
relationship intolerable.
 The acts which may justify termination are:-
(a) gross dishonesty;
(b) willful damage to property;
(c) willful endangering the safety of others;
(d) gross negligence;
(e) assault on a co-employee, supplier, customer or a member of the
family of, and any person associated with, the employer; and
(f) Gross insubordination (refusal to obey orders from the authority)
Procedures to be Followed
The procedures required to be taken are as follows:
a) The Employer must conduct investigation for reason of establishing whether a
disciplinary hearing is to be conducted or not.
b) Once the Employer finds out that a disciplinary hearing is to be conducted, must
draw a charge of offences and submit it to the Employee;
c) The employee must be given reasonable time(not less than 48hours) to prepare
for the hearing and may be assisted by trade union representative or fellow
employee;
d) The hearing must be chaired by a senior management representative who is not
involved in the case and finalized within reasonable time.
e) During the hearing, the Employee will be allowed to bring witnesses and also to
cross examine witnesses of the Employer.
f) After the hearing, the Hearing (Disciplinary Committee) shall prepare a report
and submit it to the employer for decision.
g) Where the committee finds the employee guilty of the offence charges, the
Employer will write to the Employee informing him/her about the outcome of
the hearing and a decision thereof.
Termination of Employment on ground of
Incapacity
 Incapacity may be defined as a situation where the employee becomes unfit
or unable to perform and render his duties as ordinarily required or expected
or be unable to produce expected services and results in the due course of
the employment.
 The employer may also terminate the employee on ground of incapacity due
to ill health, injury or poor work performance.
 An employer who is considering to terminate an employee on grounds of ill
health or injury must take into account the following factors to determine
the fairness of the reasons:-
(i) The cause of the incapacity;
(ii) The degree of incapacity;
(iii) The temporally or permanent nature of incapacity;
(iv) The ability to accommodate the incapacity;
(v) The existence of any compensation or pension
Termination of Employment on ground of
Incapacity
 Where the employee is injured at work or is incapacitated by a work related
illness the employer is required to do all what is possible to accommodate the
employee (the ability to accommodate)
 The employer is required to be guided by an opinion of a registered medical
practitioner in determining the degree and extent of incapacity.
 Where the employee is just temporarily unable to work and is likely to be
absent for a time that is unreasonably long in the circumstances, the
employer is required to investigate possible ways to accommodate the
employee or consider all possible alternatives short of termination.
 The possible short term alternatives include:
(i) Temporally replacement;
(ii) Alternative work;
(iii) Early retirement; or
(iv) Any other acceptable alternative.
Termination of Employment on ground
of Incapacity
 Where an employee is permanently incapacitated, the employer is advised
to secure alternative employment for the employee or adopting the duties
or work circumstances of the employee to accommodate the employee’s
disability.
 Where the causes of incapacity is due to alcoholism or drug abuse,
counseling and rehabilitation may be appropriate steps for an employer to
consider.
 No employment shall be terminated merely on the basis of HIV/AIDS status.
 HIV/AIDS infected employees shall continue to work under normal
conditions in their current employment for as long as they are medically fit
to do so.
 Where HIV/AIDS infected employee cannot continue with normal
employment because of HIV/AIDS related illness, the employer shall
endeavor to find alternative employment without prejudice to that
employee's benefits
Procedures to be followed
a) The employer shall investigate an health or injury, the employer shall call
employee's incapacity due to ill-health a meeting with the employee, who
or injury. shall be allowed to have a fellow
employee or trade union representative
b) The employee shall be consulted in the
present to provide assistance.
process of the investigation and shall
be advised of all the alternativesf) The employer shall outline reasons for
considered. action to be taken and allow the
employee and/or the representative to
c) The employer shall consider the
make representations, before finalizing
alternatives advanced by the employee
a decision.
and, if not accepted, give reasons.
g) The employer shall consider any
d) The employee is entitled to be
representations made and, if these are
represented by a trade union
not accepted, explain why.
representative or fellow employee in
the consultations. h) The outcome of the meeting shall be
communicated of the employee in
e) Prior to decision to terminate the
writing, with brief reasons.
employment of an employee for ill-
Termination of Employment on ground
of Incompatibility
 Incompatibility means unsuitability of the employee to his work due to his
character or disposition.
 Further, it includes incompatibility of the employee in his work environment
in that he relates badly with fellow employees, clients, or other persons who
are important to the business.
 Before terminating the employment on this ground, the employer shall;
(i) Record the incidents of incompatibility that gave rise to concrete
problems or disruption;
(ii) Warn and counsel the employee before termination. This should
include advising the employee of unacceptable conduct and what remedial
action is proposed.
(iii) Before terminating employment on this ground, the employer is
required to give
employee a fair opportunity to:
(a) Consider and reply to the allegation of incompatibility;
(b) Remove the cause for disharmony; or
(c) Propose an alternative to termination.
 Termination on Operational
Requirements(Retrenchment)
 A termination for operational requirements (commonly known Operational as
retrenchment) means a termination of employment arising from the requirements
operational requirements of the business.
 An operational requirement is defined in the Act as a requirement based on the
economic, technological, structural or similar needs of the employer.
As a general rule the circumstances that might legitimately form the basis of a
termination of employee due to operational requirement are –
1. economic needs that relate to the financial management of the enterprise:
2. technological needs that refer to the introduction of new technology which affects work
relationships either by making existing jobs redundant or by requiring employees to adapt to
the new technology or a consequential restructuring of the workplace:
3. structural needs that arise from restructuring of the business as a result of a number of
business related 'causes such as the merger of businesses, a change in the nature of the
business, more effective ways of working, a transfer of the business or part of the business.
 Procedures for Termination based on
Operational Requirements
The obligations placed on an employer are both procedural and substantive. The
requirement of provides that in any termination for operational requirements, the
employer must comply with the following principles:
a) give notice of any intention to retrench as soon as it is contemplated
b) disclose all relevant information on the intended retrenchment for the purpose of
proper consultation
c) consult prior to retrenchment or redundancy on-
(i) the reasons for the intended retrenchment;
(ii) any measures to avoid or minimize the intended retrenchment;
(iii) the method of selection of the employees to be retrenched;
(iv) the timing of the retrenchments; and
(v) severance pay in respect of the retrenchments
Procedures for Termination based on
Operational Requirements
d) shall give the notice, make the disclosure and make consultation with-
(i) any trade union recognized in terms of section 67;
(ii) any registered trade union with members in the workplace not
represented by a recognized trade union;
(iii) any employees not represented by a recognized or registered trade
union.
 Where in the consultations held in terms of the above principles and no
agreement is reached between the parties, the matter shall be referred to
CMA for Mediation.