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How to Terminate a Contract in 3 Easy Steps

A contract is a legal agreement made between 2 parties. When you make a decision to hire an employee, by law, you both need to sign a previously written contract outlining the specific terms of employment.

But when the time has come to terminate a contract you need to know the precise steps that you should take to complete the process correctly. Terminating a contract is a serious business therefore doing so should be done with complete caution.

How to terminate a contract in 3 easy steps

When terminating a contract both parties must act reasonably, fairly and in good faith in order to maintain good relations and remain within the law.

By performing the three steps below you can ensure that you terminate a contract rightfully and lawfully.

Step 1:

Ensure you have the legal rights to terminate the contract

Step 2:

Draw up a Termination of Employment contract in writing

Step 3:

Give the individual their correct notice period (outlined in their contract and dependent on the length of time the employee has been working for them)

A typical notice period usually takes on the following structure:

·         1-5 years of employment – at least 30 calendar days

·         5-10 years of employment – at least 60 days calendar days

·         10 or more years of employment – at least 90 calendar days

However as an employer you are not required to adhere to these periods of advance notice if the employee has breached their duties to the extent that they cannot reasonably demand that the employer continue with the employment contract.

Why do employers cancel an employment contract?

·         Cannot continue working for health reasons
·         Cannot cope with their duties due to insufficient knowledge or skills
·         Ignores the instructions issued by you
·         Comes to work inebriated
·         Steals from the company 

 

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