Employment is typically entered into with the expectation of continuity, whether through permanent or fixed-term contracts. Both parties, employer and employee, are bound by the terms of the employment contract, including company policies and procedures. Grievance procedures delineate the steps for addressing and resolving grievances, while misconduct policies outline unacceptable behavior and associated consequences. In cases of confirmed and dismissible misconduct, employees may be relieved of their duties. Common questions arise regarding the forfeiture or payment of terminal benefits in such situations.
Definition
Terminal benefits encompass the final payments disbursed to an employee upon the conclusion of their employment contract, whether due to contract expiration, resignation, or dismissal. These payments typically include the monthly salary, inclusive of any overtime owed, as well as leave pay, severance or gratuity pay, and notice pay in certain instances. The provision of these benefits aims to ensure the proper conclusion of the employment agreement. It’s important to note that terminal benefits are entitlements for all employees except casual workers.
The confusion
The confusion often arises regarding dismissals resulting from serious offenses or misconduct. For instance, if an employee is accused of committing acts of violence against a colleague, considered a serious offense, they undergo a disciplinary hearing. If found guilty, they may face summary dismissal, wherein they waive their right to notice or payment in lieu thereof. Section 26(1) of the Employment Act supports this, stating that an employer may terminate a contract without notice or payment in cases of serious misconduct. However, employers must act promptly upon becoming aware of the misconduct to exercise this right. Some mistakenly believe that employees forfeit their terminal benefits upon summary dismissal, which is not necessarily the case.
The correction
As mentioned above, terminal benefits are every employee’s entitlement except for casual employees. Should an employee be dismissed as mentioned above, they only forfeit their notice pay or the opportunity to serve notice. If the employee has an outstanding debt (written and signed staff loan or salary advance) then the balance can be deducted from their terminal benefits. Everything else must be paid as is, after factoring in the tax element where applicable. Withholding of one’s terminal benefits is unlawful and punishable by law.
Contacts
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