In my years of practicing as an Advocate, I have represented a number of Clients in Complaints for unfair termination, filed against them by former employees.
In recent months, many Companies in Tanzania have undertaken to reduce their work force due to different economic factors.
It is very important (I can't stress this enough) that Companies intending to terminate their employees based on operational requirements follow all the procedure as provided under the Law.
In Tanzania, Termination can be unfair if the reason for such termination is not sufficient, and or the procedure set down by Law has not been followed.
Regardless of how genuine the reason for terminating an employee is, regardless of how gross the misconduct, the procedure as set out by Law should be followed. Failure to follow such procedure will result in, should the employee file a Complaint at the Commission for Mediation and Arbitration, the Employer being ordered either to reinstate the Employee, re- engage the employee, or compensate the said employee. Compensation for unfair termination has been pegged at an equivalent of 12 months of the employee's salary.
Today, I will concentrate on the procedure to be followed where an Employer intends to terminate employees based on operational requirements.
Section 38 of the
Employment and Labour Relations Act [Act No. 6 of 2004]; outlines the following
procedure to be followed by an employer that intends to terminate employees for
operational requirements:-
a.
The employer shall give a notice of
the intention to terminate employees as soon as such termination is
contemplated.
b.
The employer is to disclose all
information on the intended retrenchment for the purpose of proper consultation.
c.
The employer is to consult with
employees prior to retrenchment or redundancy on the reasons for the intended
termination, any measure to avoid or minimize the intended retrenchment, the
method of selection of the employees to be retrenched, the timing of the
retrenchments and severance pay in respect of the retrenchments.
d.
The employer is to give such notice,
make disclosure and consult with:-any trade unions, any registered trade union
with members in the work place not represented by a recognized trade union and
any employees not represented by a recognized or registered trade union.
Upon conclusion of
consultation, if the employer and the employees to be retrenched reach
consensus and all terms for such retrenchment are agreed, an Agreement is reached
between the employer and such employees. Such Agreement is called a
“retrenchment agreement” which shall contain information such as reasons for
the intended termination, the method of selecting employees to be retrenched
(eg. Last in first out, first in first out), as well as severance pay to be
paid to employees to be terminated.
In the event that an agreement
is not reached between the parties during such consultation, the Law has made
it mandatory to refer the Matter for Mediation at the Commission for Mediation
and Arbitration. Once the Matter has been referred to Mediation, the Employer
is not allowed to implement the retrenchment within thirty days of the referral
to mediation unless otherwise agreed between the parties. Once this period
passes, the employer can proceed with the retrenchment unilaterally.
If the Consultation
is successful, the employer shall proceed to enter into a Retrenchment
Agreement with the employees to be retrenched, and thereafter, issue them with
termination letters. Upon termination, the retrenched employees shall be
entitled to all terminal benefits such as severance pay, notice pay,
remuneration for work done before retrenchment and certificate of service.
Important things to Note:
1.
A Notice has to be sent to employees informing
them of the intention to retrench.
2. Such Notice should clearly state that
the Employer intends to Consult with employees, together with representatives
from their trade Union (if any); the Notice should be clear and precise, and if
possible communicate a date when such consultations shall take place.
3. During any consultation, clear minutes
should be recorded, and all attendees should sign attendance registers to
ensure that clear records are kept of all the attendees of such meetings.
4. During consultation, it is mandatory
to address the issue at hand, that retrenchment has to take place, explain the
reasons why, explain the criteria you have based on to select the employees to
be retrenched.
5.
It should also be made clear during
such consultation that employees shall be paid all their dues including
Severance pay, leave pay, leave accrued but not taken, remuneration for work
done before termination and certificate of service.
6. If employees do not agree with the
criteria used to identify employees to be terminated, employer shall ensure
that the criteria used is fair and objective, and does not infringe any right
of the employees that is legally protected.
Such unfair criteria may include pregnancy, membership in trade unions or any other
discriminatory ground.
Documents
Checklist:
In order to avoid
being ordered to compensate employees for unfair termination after
retrenchments, aside from following the procedure explained above, it is
important to ensure that at the end of the retrenchment process the employer is
in possession of the following documents:
- General Notice to all employee
- Retrenchment Agreement – to be entered into upon successful completion of consultation
- Invitation to consultation to affected employees as well as their representatives from the trade union they belong to – if any
-
Retrenchment Agreement – to be entered into upon successful completion of consultation
- Termination Letters.
Should all the above
procedures be followed, an Employer shall be in the best position to avoid
any legal action by the Employer for unfair termination, and should the employees decide to refer the Matter to
the Commission for Mediation and Arbitration, even after ensuring that all the
above outlined procedure was followed, it shall be highly unlikely for them to
succeed in any claim for unfair termination.
I hope that the above outline will be helpful.
Should you need any further assistance or clarification, do not hesitate to email us, or leave a comment with your question and we shall respond accordingly.
That's all for today,
See you next time!!
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