FAQ – Retrenchment

In South Africa, if you are retrenched, you are entitled to severance pay as per the Basic Conditions of Employment Act (BCEA). Here are the key points:
  • Severance Pay: You should receive at least one week’s remuneration for each completed year of service with your employer. For example, if you have worked for five years, you should get five weeks’ worth of your salary.
  • (Unreasonable Refusal of Alternative Employment: If you unreasonably refuse an offer of alternative employment, you may not be entitled to severance pay.)
  • Employer’s Obligation: Employers are encouraged to assist retrenched employees in finding new jobs. If they actively help you secure alternative employment, they might be exempt from paying severance.
  • UIF Claims: After retrenchment, you can also claim from the Unemployment Insurance Fund (UIF) to help cover your expenses while you look for new work.
  • Annual Leave Payout
  • Notice Pay Salary till retrenchment date
     
Yes, you can take further action if you believe your retrenchment was unfair. Here are the steps you can follow: Internal Grievance Procedure: Raise the issue with your employer directly.  This gives your employer a chance to address your concerns.
  • CCMA: If the internal process doesn’t resolve the issue, you can refer the matter to the Commission for Conciliation, Mediation, and Arbitration (CCMA). The CCMA will attempt to mediate and, if necessary, arbitrate the dispute.
  • Labour Court: If you’re not satisfied with the CCMA’s decision, you can take the matter to the Labour Court. The court can review the case and make a binding decision.
  • Legal Advice: It’s advisable to seek legal advice to understand your rights and the best course of action. A lawyer specializing in labour law can provide guidance and represent you if needed.
Documentation: Ensure you have all relevant documentation, such as your employment contract, retrenchment notice, and any correspondence related to the retrenchment process at hand when taking the issue further.
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