Thank you for your question. I will try to assist you in answering it today but please feel free to ask as many follow up questions as you like until you are 100% satisfied.
1. I am not sure what notice period you are referring to. If you want to dismiss him due to operational requirements (retrenchment), you have to start with a consultation process informing him in writing of your change in finances and mention that you are contemplating retrenchment unless an alternative can be found. You invite him to make recommendations to you and then you discuss it with him after you have considered it. You can also in your letter suggest alternative such as paying him less but then you will have to reduce the work hours also to be fair. You can then (if no other suitable option can be found) suggest to him that his salary is to be reduced (and also his work hours)in order for you to be able to continue his employment. If he refuses this or you cannot reach any agreement, then you can retrench him. You have to pay one week's salary for each completed year of service as well as any other amounts due, such as accrued leave.
2. As I have described above;
3. You should make sure that his salary is in accordance with the prescribed minimum wages for your area. If you want to suggest a reduced salary for reasons of affordability, you should also reduce his working hours;
4. No you cannot. A verbal agreement is also valid and binding and he is not a contractor according to what you have told me. He is an employee.
I hope this answered your question.
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