Termination of Employment

Termination of employment means ending the employer-employee relationship between an employer and employee. Termination of employment can be initiated by any of the parties to a contract of employment. Lawful termination of employment under common law includes:

• Termination of employment by agreement: When the employer and employee agree to bring a contract of employment to an end in accordance with an agreement. For example, if there is a contract for a period of one year and the agreed period expires then the contract will obviously come to an end.
• Automatic Termination: A contract of employment may be terminated automatically in circumstances such as death or loss of business of the employer.
• Termination of employment by the employee/Resignation: This happens when an employee due to material breach of the contract by the employer decides to resign from her employment.
• Termination of employment by an 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. 

Can I terminate an employee because I do not like her/him?
No. Under the law there are four grounds that may justify termination of the employment by the employer and these are:

• Misconduct
• Incapacity
• Incompatibility
• Employer’s operational requirements/retrenchment. 

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Posted in: Disputes,Labour Laws,Transfer/Exchange

Terminal Benefits

What are Terminal Benefits?
Terminal Benefits are final entitlements of an employee upon termination of an employment contract. 
What is an employee entitled to as terminal benefits upon the termination of their employment contract?
Generally, Section 44 of the Employment and Labour Relations Act, 2004 provides the following for upon termination of the employment contract; 

• Any remuneration for work done before termination
• Any annual leave pay due to an employee for leave that employee has not taken
• Any annual leave pay accrued during any incomplete leave cycle
• Any notice pay due
• Any severance pays due if an employee qualifies for this
• Any transport allowance that may be due
• Certificate of Service

The above-mentioned are generally described as terminal benefits; however they are not automatically granted. Some are granted depending on various circumstances such as grounds of termination, type of employment contract, the length of service to your employer etc.
If an employee's contract has been terminated due to misconduct, are they still entitled to Severance Pay?
According to the Employment and Labour Relations Act, 2004 an employee shall not be entitled to severance pay if the termination was on the grounds of misconduct. The employer is correct to refuse to payseverance pay. Another example where an employer can refuse to grant severance pay is if an employee is terminated on the grounds of capacity or operational requirements, and unreasonably refuses to accept alternative employment with that employer.
Another condition for an employee to be granted severance pay is that the employee must have completed 12 months continuous service with an employer and that the termination was initiated by the employer.
Is an employee entitled to Severance Pay upon their retirement?
From a recent amendment of Section 42 of the Employment and Labour Relations Act, 2004, an employee who has retired from employee is not entitled to severance pay. The logic behind this is that the retired employee will be receiving pension from the respective pension fund. The amendment is provided under part V of the Written Laws (Miscelleneous Amendments) Act No. 3 of 2010. You will therefore not be entitled to severance pay upon your retirement apart from your pension fund. Another scenario where an employee will not be entitled to severance pay is when an employee was working on a fixed term contract and the duration has automatically expired.
How is Severance Pay calculated?
Severance pay means an amount at least equal to seven days basic wage for each completed year of continuous service with that employer up to a maximum of ten years. Therefore in calculating severance pay you multiply seven days’ salary by the number of years that an employee has rendered services to an employer with a maximum of 10 years.
What is Notice of Termination? How is notice given? Is it mandatory?
Notice of Termination is notification from either party in the employment contract that one party in the contract is intending to terminate the contract of employment at a given time. Notice period differs in the following way:
If notice of termination is given in the first month of employment the period of notice shall not be less than seven days. The notice period is the period of notice upon which the employee is supposed to work from the time the notice is tendered to the time when the termination becomes effective.
If the employee is employed on a daily or weekly basis the notice period shall be four days and if the employee is employed on a monthly basis the notice period shall be 28 days. A contract of employment can provide for a longer notice but  the agreed notice period shall be of equal duration for both employer and the employee. The Notice of Termination shall state the reason for termination and the date on which the notice is given.
Can an employer terminate an employee immediately without allowing them to work during the notice period. Does the law allow this?
In event the employer wants to terminate an employee without allowing her/him to serve the notice period the employer will be required to pay the employee the amount that an employee would have received if she/he had worked during the notice period. This is what is usually referred to as payment in lieu of notice. 
The same is the case when an employee resigns immediately without serving the notice as required under the law and contract of employment. Section 41 (6) provides that when an employee refuses to work during the notice period, an employer may deduct any money due to that employee on termination; in other words, the amount that would have been due to the employee if the employee had worked during the notice period.
Must I, as an employer, pay for transportation after a contract of employment is terminated?
In the event the contract of employment is terminated in a place other than where an employee was recruited, they will be entitled to transportation to the place of recruitment for themself and their personal effects. An example is when an employee has been recruited in Dodoma but transferred to a branch office in Arusha. If terminated while in Arusha the employer will have to transport the employee to place of recruitment which is Dodoma. The employer will chose whether to:

• Pay transport allowance or transport the employee and personal effects or
• Pay for the transportation of the employee to the place of recruitment or
• Pay the employee an allowance for transportation to the place of recruitment and daily subsistence between the date of termination of the contract and the date of transporting the employee and her/his family to the place of  recruitment .

What happens if an employee is terminated but they have outstanding leave they have not taken?
In the case of accrued leave upon termination the employer shall pay an employee on a pro rata basis an amount of money in substitution for the annual leave to which that employee is entitled - provided that it is taken not later than six months after the end of leave cycle or twelve months after the end of leave cycle if  (if the employee consented or extension is justified by operational requirements). If the failure to request for leave was perpetuated by the employee themselves then they will not be entitled to accrued leave.
Is Certificate of Service and Notice mandatory even when terminated on misconduct?
Yes. Notice and Certificate of Service are mandatory regardless of the reason for termination. 
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Pension Rights

A full pension is provided to a worker who is at least 60 years old and has at least 15 years of contributions. A worker has to be at least 55 years old to get an early pension and reduced pension is paid to men aged 55 to 59 years and to women aged 50 to 54 years. There is also an old-age grant for those who do not meet requirements for partial of full pension. The pension has to be at least 80 per cfent of the legal monthly minimum wage and calculated according to worker's average monthly earnings in the best five of the last ten years (specifically, 30 percent of the monthly earnings).  National Social Security Fund Act, 1997

Dependents/Survivor Benefits

Survivor benefit for dependents including widow, widower and children is provided by Tanzanian law. If the widow or widower is childless or have no dependent children, the full sum of the deceased worker's pension is paid to her or him. If widow(er) is less than 45 years old or does not have a child younger tan 15 years at the time of employee's death, pension is paid for 24 months. In the first time, a lump-sum of 24 times the monthly pension is paid and then only a monthly pension is paid. It has to be at least 80 per cent of monthly minimum wage. National Social Security Fund Act, 1997

Invalidity Benefits

Invalidity benefit is provided in the case of non-occupational accident or disease result into permanent invalidity. 30 percent of the insured worker's average monthly earnings in the best 5 od the last 10 years is paid. In the first time, a lump-sum of 24 times the monthly pension is paid. Monthly pension has to be at least 80 per cent of the monthly minimum wage.  National Social Security Fund Act, 1997

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Posted in: Labour Laws,Transfer/Exchange

Discrimination

What is discrimination under the Tanzanian Labour Laws?
Discrimination has not been defined under the Tanzanian Labour Laws but Article 1 (a) and (b) of Convention No 111 on Discrimination (Employment and Occupation) Convention, 1958 defines discrimination to include:

• Any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation. 
• Such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the member concerned after consultation with representative employers' and workers' organisations, where such exist, and with other appropriate bodies.
• Additionally, section 7 (5) of the Employment and Labour Relations Act, 2004 provides that harassment of an employee shall be a form of discrimination and shall be prohibited on the same grounds as discrimination against colour, nationality, tribe or place of origin, race, national extraction, social origin, political opinion or religion, sex, gender, pregnancy, marital status or family responsibility, disability, HIV/AIDS, age or station of Life.

What does the law say about discrimination?
Section 7 (4) of the Employment and Labour Relations Act, 2004 prohibits discrimination against an employee in any employment policy or practice, on one or more grounds including:

• Colour. 
• Nationality.
• Tribe or place of origin.
• Race.
• National extraction. 
• Social origin. 
• Political opinion or religion.
• Sex.
• Gender. 
• Pregnancy. 
• Marital status or family responsibility. 
• Disability.
• HIV/AIDS.
• Age. 
• Station of life. 

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Posted in: Labour Laws

Child Labour

How has the child been defined under the Labour Laws?

Section 4 of the Employment and Labour Relations Act, 2004 defines a child as a person under the age of fourteen years but for the purpose of employment in hazardous sector , it is defined as a person under the age of eighteen years.

Is there any other law regulating the employment of a child?

Yes, there are various other laws providing for employment of a child and some of these are the Constitution of the United Republic of Tanzania, 1977, the Law of the Child Act, and the Vocational Education and Training Act to mention a few. But when it comes to employment and labour matters, the Employment and Labour Relations Act, 2004 is the most relevant one.

Is employment of a child permitted under the law?

Generally the law prohibits employment of a child under the age of fourteen years. It further prohibits employment of a child under the age of eighteen years in a mine, factory, as a craw in a ship, or any other work site including non-formal settings and agriculture where work conditions may be considered hazardous by the Minister.

However, the law permits employment of a child of fourteen years in light work which is not likely to be harmful to the child’s health and development and does not prejudice the child’s attendance at school, vocational orientation or a training programme. The general welfare of the child must not be prejudiced.

Is there any penalty under the law if I am caught employing a child contrary to the provision of the Employment and Labour Relations Act, 2004?

It is an offence to employ a child contrary to the provision of the mentioned act and the sanction thereof is provided for under section 102 (2) of the Act which empowers a District and Resident Magistrate’s Court to impose a penalty amounting to a fine not exceeding five million shillings, imprisonment for a term of one year or to both fine and imprisonment as the Court may deem fit, depending on the circumstance of the case.

How will I as an employer be aware that my enterprise is hazardous?

The law employs the Minister to prepare a list of hazardous sectors and make it available to the public. Currently there is a draft list by the Minister for Labour and Employment but the same has not come into effect.

Will I be held guilty of employing a child if I was not aware and I was misled by the child as to their age?

If you claim to have been unaware that the person you are employing is a child or you were misled you will have a duty to prove that it was reasonable for you or any other prudent person to believe that the child was above the prohibited age. You must show that there was enough due diligent exercise which led you to believe that you were not employing a child. Evidence of a birth certificate, interview records with their parents, and any other relevant evidence to establish that you were misled could set you free of the said offence.

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Posted in: Labour Globally,Labour Laws

Contracts of Employment

What laws govern Contracts of Employment in Tanzania?

The Law of Contract Act governs all types of contracts in Tanzania. But for specific types of contracts there are specific laws governing the same. For example the Employment and Labour Relations Act specifically provides for Employment Contracts. It is therefore correct to state that the Employment and Labour Relations Act, 2004 together with the Law of Contract Act govern employment contracts.

 Types of contracts?

There are mainly three types of contracts under which you can employ someone and these are:

• Contract for an unspecified period of time: As the name explains, for this type of contract the duration of employment is unspecified, meaning not provided for. Some call it a permanent contract.
• Contract for specified period of time: This is a type of contract in which the duration is specified. Under this contract if the specified duration has expired then the contract automatically comes to an end. A contract for a specified period of time could be of a duration of one month, three months, one year, two years etc.
• Contract for a specific task: This is a kind of contract in which a person is employed to perform a specific task. Once the task is completed then that contract comes to an end. For example, it could be that a person is employed to offload crates of soda from a truck and once that task has been completed then the contract ends.

What is a Written Statement of Particulars and what are its ingredients?

A written Statement of Particulars is a list of information about an employee and terms of engagement which the employer must supply to an employee once an employee commences employment. A Written Statement of Particulars must contain the following information about an employee;

• Name, Age, Permanent Address and Sex of the employee
• Place of Recruitment
• Job description
• Date of commencement
• Form and duration of Contract
• Place of Work
• Hours of Work
• Remuneration, method of calculation and details of any benefits or payments in kind;and
• Any other prescribed matter.

If the particulars stated above are stated in a written contract which has been supplied to an employee the employer may not furnish the employee with the Written Statement of Particulars.

A Written Statement of Particulars or a Contract of Employment or any of the above mentioned terms shall not apply to an employee who works less than six days in a month for an employer.

It is the mandatory duty of the employer to make sure that all written particulars or the ingredients of the contract are explained to the employee in a manner that an employee understands. It is necessary to put the contract in a language that is easily understood by the employee, be it English or Swahili. 

Are Oral Contract valid?

Oral contracts are permissible; however an employee must be supplied with a Written Statement of Particulars containing terms listed above. It is however not advised to enter into an oral contract of employment because in case of any legal proceedings the burden of proving or disproving an alleged term of employment shall be on the employer. If an employer fails to produce a contract of employment or written statement of particulars he/she will then fail to prove any term contained therein and the dispute might be decided against him/her. It is therefore very important to supply an employee with a written contract or at least a Written Statement of Particulars.

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Posted in: Labour Laws