Payment of notice period upon termination of service
By Devon Basson
Section 38 of the Basic Conditions of Service Act stipulates that when an employer offers payment instead of giving the employee notice in terms of section 37 of the Act, an employer may pay the employee the remuneration the employee would have received if the employee had worked the notice period. The calculation of such payment is governed by section 35 of the Act, dealing with the calculation of remuneration and wages.
It is important to bear in mind that the notice period that is to be paid is calculated on the length of the employee’s employment. Where an employee had been in the employer’s service for less than six months the employer only has to pay one week’s notice. Where the employee had been employed for between six months and a year, the employer only has to pay two weeks’ notice, and where the employee had been in the employ of the employer for 12 months or longer, the employer must pay a month’s remuneration for the notice period the employee would have worked normally. If the employment contract prescribes other notice periods, pay for the notice period would be in accordance with the terms of the contract, but it may not be less favourable than the minimum periods stipulated in the Basic Conditions of Employment Act.
Where an employee resigns by giving notice and is willing to work the notice period and the employer should decide that it is no longer necessary for the employee to remain in his employ, then the employer must compensate the employee in accordance with the notice period he/she would have worked, unless the employee and the employer agree otherwise.
It is also important to note that where an employee resigns without giving notice (in other words a 24-hour resignation) the employer would be entitled to take civil action against the employee for breach of contract. Moreover, if an employee was dismissed with immediate effect for misconduct or poor performance such an employee will not be entitled to notice payment.