How to differentiate wrongful sacking from redundancy

In the practice of employment law, I interact with employees who say that they were laid off on the ground of redundancy.

Some company boards resolve to sack some staff because they have formulated new employment policies and claim it is redundancy.

Other employers decide to reduce the number of employees after reviewing salary budgets claiming that the expense is burdening the business and call it redundancy.

One of the most unfortunate cases I interacted with was an employee who said he was declared redundant because he had worked for his employer for too long.

In reality, none of the above reasons relate to termination of employment on the ground of redundancy.

The Employment Act defines redundancy as “the loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment”.

First, it must be by involuntary means through no fault of the employee; and secondly, the services of the employee have to be superfluous, meaning nonessential, unneeded, excess, extra, unused and waste.

In essence, what the law is stating here is that for a termination to be a redundancy, the employee’s services must be completely of no use to the employer; so much so that his position in the company would have to be abolished.

To recruit another person to fill the vacancy created by an employee declared redundant would amount to wrongful dismissal of the former employee.

In addition, to find fault in an employee and terminate his services in the name of redundancy amounts to wrongful dismissal.

If an employer wants to sack an employee on account of redundancy; the procedure as set out in the Employment Act must be adhered to, failure to which the termination will be deemed wrongful.

Golden rule

First, where the employee is a member of a trade union the employer must give the union and the labour office in charge of the area reasons for the redundancy not less than a month prior to the date of the of termination.

However, if the employee is not a member of a trade union the employer must notify the employee personally in writing and the labour office.
Secondly, the golden rule of first in-last out must be considered.

This means that in the selection of employees to be declared redundant the employer must have due regard to seniority and skills, ability and reliability of each employee affected by the redundancy.

If the employer is considering to abolish an entire department, the golden rule to be applied is that those who were employed earlier ought to be declared redundant last.

Depending on skills, ability and reliability, an employee who was employed earlier and sacked earlier than others can sue for damages against the employer for unprocedurally sacking him on account of redundancy.

Third, in case of a collective agreement between an employer and a trade union setting out terms for terminal benefits payable upon redundancy, the employer must demonstrate that it has not placed the employee at a disadvantage for being or not being a member of the trade union.

Fourth, where leave is due to an employee who is declared redundant the employer has to demonstrate that it is paid for in cash. In addition, the employer must pay the employee not less than one month’s salary or wages in lieu of notice.

Finally, the employer has to pay the employee severance pay at the rate of not less than 15 days for each completed year of service.

If the employer fails to demonstrate to the employee the reasons for intended termination, or fails to adhere to the aforementioned procedures; the employee will be entitled to sue for wrongful termination.

The court may award compensatory damages and in some cases order for reinstatement of the employee.

Ms Akwana is the managing partner of Collette Akwana and Co Advocates.