Notice and Severance

Notice Requirement

Employment and Labour Relations Act 2004 requires written termination notice before terminating services of a worker.

Either party has the right to terminate the employment for a variety of reasons including lawful termination of employment under common law; resignation by a worker because the employer made continued employment intolerable for the worker; failure to renew a fixed term contract on the same or similar terms if there was a reasonable expectation of renewal; failure to allow a worker to resume work after taking maternity leave granted under the Act; failure to reemploy a worker if the employer has terminated the employment of a number of workers for the same or similar reasons and has offered to reemploy one or more of them.

Either party may  terminate the employment contract after serving due notice or paying in lieu of notice. For terminating an indefinite term contract, the required notice period depends on the worker's length of service as follows:

-           7 days for the service of one month or less;

-           4 days for a worker employed on daily basis; and

-           28 days for a worker employed on monthly basis.

A longer notice period may also be agreed upon between the parties if it is equal between the worker and the employer. Notice of termination has to be in writing, stating the reasons for termination and the date on which the notice is given. Notice of termination can’t be given during any period of leave allowed under law or notice that runs concurrently with any such period of leave.

Termination of employment is unfair if the employer fails to prove that the reason for the termination is valid; is related to the employee's conduct, capacity or compatibility; or is based on the operational requirements of the employer.

In order to decide whether a termination by an employer is fair, an employer, arbitrator, or the Labour Division of the High Court would take into account any Code of Good Practice.

If an arbitrator or the Labor Court finds that a termination is unfair, the arbitrator or Court may order the employer to reinstate the worker from the date of termination without loss of any remuneration during the period that the worker was absent from work due to the unfair termination; or re-engage the worker on any terms that the arbitrator or Court may decide; or pay compensation to the worker at least 12 months of remuneration.

An order for compensation made under the Act is in addition to, and not a substitute for, any other amount to which the worker may be entitled in terms of any law or agreement.

Where an order of reinstatement or re-engagement is made by an arbitrator or court, the employer pays compensation of 12 months of wages in addition to the wages due and other benefits from the date of unfair termination to the date of final payment.

Source: § 36-41 of Employment and Labour Relations Act 2004

Severance Pay

The Employment and Labour Relations Act 2004 provides for Severance Pay. Worker is entitled to the severance pay if he/she has completed at least a year of a service with the employer. Severance pay in Tanzania is equal to at least 7 days basic wage for each completed year of employment up to a maximum of ten years.

Severance pay is not payable if an employment is terminated on account of misconduct, incapacity and incompatibility with requirements of business but who unreasonably refuses to accept alternative employment with that employer or any other employer, and if the worker has reached the retirement age or if the employment contract has expired or ended by reason of time. Payment of severance pay does not affect the rights of a worker to any other payable amount.

Source: §42 of Employment and Labour Relations Act 2004

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