Compensation for termination of an employment contract

LIMITED/FIXED TERM

If the contract has a FIXED TERM ie the starting date and the end date is mentioned, then if either party decided to terminate the contract without completing the contract period, then that party must pay the compensation:

• if the EMPLOYER terminates – subject to a MAXIMUM of three months’ salary,
• if the EMPLOYEE terminates – 45 days salary compensation.

COMPENSATION FOR ARBITRARY TERMINATION (UNLIMITED TERM)

An employee who is dismissed arbitrarily (without cause or documentary evidence supporting poor performance) can claim:

• an award of compensation up to three months’ salary,
• any contractual entitlements,
• payment in lieu of any unpaid part of the notice period,
• payment in lieu of accrued annual leave not taken, and
• end of service gratuity.

Change of owner does not absolve the liability towards the employee. Please file a labour case against the company.