Minding Your Legal Affairs XV; The Employee’s Rights Part VII

Termination of Employment

The employment contract continues to be governed by contract law, and as such, a remedy for breach of contract will lie in favour of both employer and employee if one party terminates the contract without cause or without just cause, in accordance with the terms of their agreement.

Sometimes, however, the remedies that contract law will provide will not be adequate. The Parliament therefore attempted to provide a clear prescription for compensating an employee upon termination, and or a clear prescription on an employee’s obligation to his employer in terminating his contract, in the Employment Act.

Termination by the Employee

Under the Employment Act, the employee must provide the employer with notice of termination, except where the employer’s conduct can be described as constructively terminating the contract.

Except upon a constructive dismissal, an employee must give his employer at least 2 weeks’ notice where employed for 3 months or more, and 1 month’s notice where employed for 1 year or more. If the employee does not do so, the employer is only obligated to pay him up to the date of termination.

Where an employee considers that the employer’s conduct is so unreasonable that he cannot reasonably be expected to continue the employment relationship, he can terminate without notice, and present a claim that he has been unfairly dismissed. The danger of doing so is caught in the test of reasonableness or unreasonableness and who gets to make that determination. It is not a scientific formula.

Termination by the Employer

Where a contract is not for a specified period of time or for a specific task, so that it expires by passage of time or completion of the task, and it does not contain an unconditional clause for renewal, it is a contract for an unspecified period of time according to the Employment Act.

After the probationary period has passed, such a contract can only validly be terminated for a reason connected with the capacity or conduct of the employee, or based on the operational requirements of the business, or breach of contract or disciplinary rules of the employer.

Unless the conduct is so serious that it can justify termination without notice, called summary dismissal, then the employer, in terminating, must:

1. Give written notice of termination or pay instead of notice;
2. Minimum periods of notice are as follows:

• 1 working day if employed for less than 1 month;
• 1 week if employed for 1 month to less than 3 months;
• 2 weeks if employed for 3 months to less than 1 year;
• 1 month if employed for 1 year to less than 5 years; and
• 2 months if employee for over 5 years.

3. Pay termination allowance, calculated as 1 week’s wages for each completed year of service;
4. Give or pay all benefits accruing at the date of termination, for example, earned vacation leave;
5. Make all payments due upon termination within 7 days of termination; and
6. If requested by the employee, provide a certificate of termination containing matters prescribed by the Employment Act.

Where the employer fails to comply with the above, the employee can make a claim for unfair dismissal.

Grenada Bar Association