After Termination Of Employment Contract Template for South Africa

Yes, a document recording what happens after termination of an employment contract is binding as an ordinary contract once both parties sign it and each receives something of value, such as a settlement payment in exchange for a waiver of claims. However, section 5 of the Basic Conditions of Employment Act 75 of 1997 prevents an employee from contracting out of statutory minimums like notice pay, accrued leave pay or severance where it applies. Any clause that tries to reduce those entitlements will simply be unenforceable, while the rest of the document usually stands.

Section 42 of the Basic Conditions of Employment Act requires a certificate of service setting out the employee's full name, the employer's name and address, the job description, the date started and date ended, the remuneration at date of termination and, if the employee requests it, the reason for termination. The employer must also complete the UI-19 declaration so the employee can claim from the Unemployment Insurance Fund, and issue an IRP5 tax certificate. Your document should list these deliverables under the final obligations clause so nothing is missed on the last day.

Section 38 of the Basic Conditions of Employment Act requires the employer to pay all amounts owing on completion of the notice period, meaning the final salary, accrued but untaken annual leave under section 40, pro rata bonus if contractually due and any notice pay in lieu. Delays expose the employer to a claim before the CCMA or a Labour Inspector under the BCEA enforcement provisions. Set the exact payment date and the bank account details in the settlement or final payment clause to avoid a dispute over timing.

Severance pay is only compulsory where the termination is a dismissal for operational requirements, in which case section 41 of the Basic Conditions of Employment Act sets a minimum of one week's remuneration for each completed year of continuous service. It is not payable on resignation, dismissal for misconduct or poor performance, or where the employee unreasonably refuses a suitable alternative position. If you are paying an ex gratia amount instead, say so expressly in the payment clause so it is not later argued to be a statutory entitlement.

Yes. South African courts enforce restraints of trade as valid unless the person resisting them proves the restraint is unreasonable, and the test set in Basson v Chilwan looks at whether there is a protectable interest such as confidential information or customer connections, and whether the duration, area and scope go further than needed to protect it. Confidentiality obligations over trade secrets and client data continue indefinitely if drafted that way. Record the exact duration, geographic area and defined activities in the restraint clause, because a vague or overbroad restraint is the most common reason enforcement fails.

A properly drafted full and final settlement clause, signed voluntarily and with the employee understanding what is being given up, generally bars a later unfair dismissal referral, and the CCMA will treat it as a bar to arbitration. Without such a clause the employee has 30 days from the date of dismissal to refer an unfair dismissal dispute to the CCMA or a bargaining council under section 191 of the Labour Relations Act 66 of 1995, and 90 days for an unfair labour practice. The waiver and no further claims clause is what closes this exposure.

Only by written agreement of both parties. Most well drafted termination documents include a non variation clause requiring any amendment to be in writing and signed, which South African courts uphold following Shifren, meaning an oral change will not be recognised. If the parties later agree to adjust a payment date or reference wording, sign a short written addendum referring back to the original agreement.