Grounds for termination
May an
employer dismiss an employee for any reason or must there be ‘cause’? How is
cause de
fined under the applicable statute or regulation?
An employer may dismiss a worker under section 23 read with section 24 of the Labour Act if the worker has been convicted of any criminal offense or if the worker has been found guilty of misconduct.
Further, under section 26, a worker may be terminated from employment without any cause, by giving the prescribed notice or pay in lieu. Under section 20, a worker may be retrenched on the grounds of redundancy. Moreover, under section 22, a worker may be discharged for reasons of physical or mental incapacity or continued ill-health certified by a registered medical practitioner.
Notice
Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?
Under section 23 of the Labour Act, a worker may be dismissed (for misconduct or criminal offense) without notice or without wages in lieu of notice. For termination under section 26, a permanent worker must be given 120 days’ notice, and a temporary worker, whose termination is not owing to the completion, cessation, abolition or discontinuance of the temporary work for which he or she was appointed, must be given 30 days’ notice (if he or she is a monthly rated worker) and 14 days’ notice (for other workers). However, the employer may terminate any worker without notice by paying wages in lieu of notice. For retrenchment, if the worker has been in continuous service for at least one year, they must be given one month’s notice or wages in lieu of notice. For discharge, prior notice is not required.
In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?
An employer may dismiss a worker without notice or payment in lieu of notice if the worker has been convicted of any criminal offense or if the worker has been found guilty of misconduct.
Severance pay
Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?
If a worker is dismissed for misconduct on account of theft, misappropriation, fraud or dishonesty in connection with the business or property of the employer, or disorderliness, riot, arson or breakage in the establishment, he or she is not entitled to any compensation for the dismissal. If a worker who has been in continuous service for at least one year, under extenuating circumstances, is removed, instead of being dismissed for criminal conduct or misconduct, he or she will be entitled to compensation of 15 days’ wages for every completed year of service, under section 23(3) of the Labour Act. However, a dismissed worker shall be entitled to other benefits under the Labour Act, as applicable (such as provident fund, workers’ profit participation fund and welfare fund).
If a permanent worker’s employment is terminated under section 26 of the Labour Act, he or she will be entitled to compensation of 30 days’ wages for every completed year of service or gratuity (if any), whichever is higher, in addition to any other benefit payable under the Labour Act, as applicable (such as provident fund, etc), under section 26(4) of the Labour Act.
If a worker who has been in continuous service for at least one year is retrenched from his or her service, he or she will be entitled to 30 days’ wages for every year of service or gratuity (if any), whichever is higher, under section 20(2)(c) of the Labour Act. Further, he or she will also be entitled to other benefits payable under the Labour Act, as applicable (such as provident fund, etc).
If a worker who has been in continuous service for at least one year is discharged from service, he or she will be entitled to 30 days’ wages for every year of service or gratuity (if any), whichever is higher, under section 22(2) of the Labour Act. He or she will also be entitled to other benefits payable under the Labour Act, as applicable (such as provident fund, etc).
Procedure
Are there any procedural requirements for dismissing an employee?
Section 24 of the Labour Act prescribes the procedure for dismissing a worker, which requires providing the allegation to him or her in writing and giving the opportunity for a hearing. However, no prior approval from a government agency is required by law.
Employee protections
In what circumstances are employees protected from dismissal?
Under extenuating circumstances, despite being found guilty of misconduct, a worker may be awarded any of the following punishments under section 23(2) of the Labour Act:
- removal (in which case, he or she will be entitled to compensation of 15 days’ wages for every completed year of service, provided that he or she has been in continuous service for at least one year);
- reduction to a lower post, grade or scale of pay for a period not exceeding one year;
- stoppage of promotion for a period not exceeding one year;
- withholding of increment for a period not exceeding one year;
- fine;
- suspension without wages or without subsistence allowance for a period not exceeding seven days; or
- censure and warning.
Mass terminations and collective dismissals
Are there special rules for mass terminations or collective dismissals?
No.
Class and collective actions
Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?
Class and collective actions are allowed in employment matters.
Mandatory retirement age
Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?
Section 28(1) of the Labour Act imposes a retirement age of 60 years.
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