TERMINATION OF OPEN ENDED EMPLOYMENT CONTRACT
It is in practice that employers find it hard or impossible to terminate an open ended or indefinite employment contract and employees use such contracts as a sword against their employers. This is not the case, though employees consider themselves like nothing can steer to termination of their employment contract during the employment period. Employment contracts that are open in nature can be terminated at any time by the employer if told the employer follows all required legal procedures provided for by law.
Open ended or indefinite employment contract is a contract of employment without any expiry period and they run or performed with no ending period.
Termination of Open-ended Employment Contract
Open-ended or indefinite term Employment Contract can be terminated by the employer for any legitimate grounds. (Article 27 of Law N° 66/2018 of 30/08/2018 regulating labour in Rwanda). In protection of the employees during employment period, the employment law makes it very hard to terminate employees from employment without justifiable grounds or reasons and employers have come out suffering poor delivery from employees who believe and think that their employment contract cannot be terminated.
The following are some of the ways to how an employer may terminate an Open-ended or indefinite term Employment Contract, however this insight is not intended to give powers to employers to terminate Open-ended or indefinite term Employment anyhow without justifiable grounds.
Economic or technological factor
Economic factors are factors that affect the revenue or income flow of the company and it is difficult for an employee to challenge this factor. The employer lays down the economic status of company and this makes it difficult for an employee to challenge it.
The employer may terminate an Open-ended or indefinite term Employment of an employee on grounds of economic reasons. This implies that the notice of termination should specify or express the kind of economic factors that steered to the occurrence of employment termination of an employee. (Article 31 of Law N° 66/2018 of 30/08/2018 regulating labour in Rwanda).
This strategy of laying off some employees is one of the common strategies used by big corporate entities. Restructuring is where the employer (companies) resorts to reorganization of the operational structure of the company or business. The company sets up a new structure of the company by scrapping off some positions and adding on new positions that calls for new recruitment. This gives room for employers to lay off some of the employees with either Open-ended (indefinite term Employment) or a term period contract.
Gross misconduct of an employee is the unethical and unprofessional behavior of an employee that damage the employers working ethics. The employer is by law provided with powers to terminate an employee without notice on grounds of gross misconduct. (Article 26 of Law N° 66/2018 of 30/08/2018 regulating labour in Rwanda) Gross misconducts differ from employer to employer and some of employers list all conducts considered as gross misconducts. To easily enforce such listed conducts by the employer against the employees, employer consider this list to be part of the employment contract of an employee and signed by all employees. However, under circumstance where there is no list of gross misconduct in place, the law provides for list of gross misconducts and these are enforceable without necessarily being signed by the Employee. (Ministerial Order N° 002/19.20 of 17/03/2020 establishing the list of gross misconduct)
Notice and Terminal Benefits
In all forms of termination, the employer is supposed to give notice to the employee as provided for by the law except under circumstances of gross misconduct. (Article 29 and Article 26 of Law N° 66/2018 of 30/08/2018 regulating labour in Rwanda). To avoid legal out comes against the employer, it is of a great importance to give employee terminal benefits considering his or her period of employment with the employer or company. (Article 31 of Law N° 66/2018 of 30/08/2018 regulating labour in Rwanda)
In consideration of the law, any employment contract can be terminated at any time by an employer on a justifiable ground. This implies that failure for an employer to follow the law during termination of an employee, he or she may be liable for unlawful dismissal. (Article 30 of Law N° 66/2018 of 30/08/2018 regulating labour in Rwanda).
Disclaimer on this content should not be taken as legal advice, and MK Associated Advocates will not be held accountable for any legal actions the reader may take referring to this, but rather can reach out for a formal legal advice(s) and legal opinions at our office on the above address and contacts(http://mkassociatedadvocates.rw ).