Deduction from Wages/Salaries Upon Failure by an Employee to Serve a Notice Period

1.     Introduction

One recurring situation in labour relations is where an employee resigns and decides to leave employment without honouring or giving the employer the requisite notice. Without the consent of the employee in question, some employers simply proceed to deduct the notice from such an employee’s terminal benefits. Indeed, some contracts of employment and Collective Bargaining Agreements empower the employer to make such deductions if the employee decides to leave without serving the employer the obligatory notice. In this section, we explore, the legality of such deductions. We also give an overview of how this area of law is handled in other countries. Lastly, we look at the remedies available to an employer faced with such a predicament.

2.     Notice of termination

Section 12 (4) of the Labour Act provides for the notice of termination of the contract of employment to be given by either party. The notice depends on the nature and length of the contract in question. For a contract without a limit of time or a contract for two years or more three months’ notice is prescribed, two months in the case of a contract for one year or more but less than two years and so on. Section 12 (4a) precludes an employer from terminating a contract of employment on notice unless certain conditions are met for instance in terms of a code of conduct, by mutual agreement, if it is a fixed-term contract or if an employer is engaging in a retrenchment exercise. Whilst the employer’s right to terminate on notice has been curtailed, the employee retains the full right to end an employment relationship on notice. As already noted above, circumstances may compel the employee to leave the place of work without serving the requisite notice. This is where some employers have resorted to deducting the notice period from either the accrued leave days, outstanding wages, pension etc. The major instruments used by the employers in such circumstances can be the CBA or the contract of employment. We submit in this article that this is misguided and a serious misunderstanding of the law.

3.     Permissible deductions

The Labour Act is clear-cut in terms of deductions that can be taken from an employee’s salary or wages in the course of employment and on separation. In summary, such deductions include where an employee is absent from work on workdays, statutory deductions, advance payments made to the employee, and payments made in error.[1] The relevant section is crafted in peremptory terms leaving no room for any other form of permissible deductions. The section is also clear that these permissible deductions can be deducted in full on separation. As an example, if a payment was made in error, an employer can deduct the full amount if the employee were to leave employment. This would not apply to a deduction in lieu of the notice that the employee was supposed to serve on resignation. This would be so even when the contract of employment and the CBA provides for such deductions.

Section 17(3)(b) allows the Minister of Labour to make regulations providing for the deductions which may be made from the wages of employees. No such regulations have been made empowering an employer to deduct cash in lieu of the notice of termination of the contract.

4.     Collective bargaining agreements and contracts

Certain CBAs empower employers to deduct wages upon a failure by an employee to serve the notice. One such CBA is the CBA for the Motor Industry[2] which provides:

“If an employee leaves his employment without giving notice or having given notice, and fails to work during that period of notice, the employer may deduct, from any wages or leave due to that employee, an amount equal to the wages he would have earned if he had worked the period of notice”.[3]

We submit that such a provision violates section 74 (5) of the Labour Act which precludes a CBA from having a provision that is contrary to what is provided in the Labour Act. The section unambiguously reads:

“A collective bargaining agreement shall not contain any provision which is inconsistent with this Act or any other enactment, and any collective bargaining agreement which contains any such provision shall, to the extent of such inconsistency, be construed with such modifications, qualifications, adaptations and exceptions as may be necessary to bring it into conformity with this Act or such other enactment”.

Whilst a CBA can contain a provision which is of mutual interest to the parties including deductions that can be made to employees’ wages and salaries[4] such matters should always comply with the provisions under section 74(5) of the Labour Act when read together with Section 12A (6) of the same Act. From the provisions discussed thus far, one aspect of the issue in question stands out, deducting wages in lieu of the notice that was supposed to have been served by an employee is not permitted by the labour laws of this country. One might ask, what is the law in other countries? This is reviewed below.

5.     The law in other countries

In South Africa, the labour laws do not empower an employer to deduct cash in lieu of the notice upon an employee’s failure to serve the notice period. The Basic Conditions of Employment Act (BCEA) in South Africa has provisions that are close to the Labour Act in Zimbabwe. What is slightly different is that the BCEA can allow an employee to consent to certain deductions including a deduction in lieu of notice. This logically means that a South African employer will still have to pay the employee their full wages on termination even though the employee failed to serve the notice of termination of the employment contract.

Further, as a general rule in India, wages, and salary deductions for not serving the notice period are not permissible. The laws in India provide for a list of deductions that can be made to an employee’s wages and notably, deductions for failure to serve the requisite notice are not allowed.

The manner in which this issue is handled in different countries is equivalent to what happens in Zimbabwe. This is not surprising. Labour laws are meant for the protection of employees against a capitalist system. It is accepted that employers as the owners of the means of production are more powerful when compared to employees who only render a service. To balance this unequal distribution of power, labour laws are enacted.

Does this mean a Zimbabwean employer is without recourse if an employee leaves his or her employment without giving the required notice? NO. There is no doubt that the action of leaving employment without serving the notice can result in irreparable harm on the part of the employer. The importance of a smooth handover process in the management of a business cannot be underestimated. What follows is the recourse that can be taken by the employer.

6.     Recourse on the part of the employer

Failure by an employee to serve the required notice constitutes a breach of contract. A breach of contract is a material non-compliance with the terms of a legally binding contract.[5]

A party who has suffered a breach of contract has the option of enforcing the contract and order specific performance and to also sue for damages.  The damages can be based on actual loss or future loss. This procedure is not based on labour law but civil law and would entail the issuance of summons of an appropriate court. There is no doubt that this is a cumbersome process as compared to recovering the equivalent of the notice from the employee’s wages but until our labour laws are amended, this is the law that we have to abide by.

7.     Conclusion

In this article, we highlighted that our labour laws do not allow an employer to deduct wages upon a failure by an employee to serve the requisite notice. Contracts and CBAs that empower employers to deduct wages may fail the lawfulness test as they are contrary to the provisions in the Act. We also demonstrated how our laws are structured in a manner not so different from other countries. This is so as a function of the need for the labour laws to protect the employees mindful of the unequal relationship that exists between the owners of the means of production, the employers, and the providers of service, the employees. The only viable option on the part of the employer is to issue out summons and recover damages from the employee but this is a long and costly process and as a result, very few employers are willing to go that route. Until our laws are changed, deduction of wages upon a failure by an employee’s failure to serve the requisite notice remain unlawful.

[1]           Section 12A (6) of the Labour Act (Chapter 28.01).

[2]           Statutory Instrument 84 of 1993.

[3]           Section 13(3) of Statutory Instrument 84 of 1993.

[4]           Section 74(3)(c) of the Labour Act.

[5]           Leigh Ellis (Updated 8 October 2019),


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