How Do You Get Paid When You Are Retrenched?

How Do You Get Paid When You Are Retrenched?

Understanding your compensation rights during retrenchment is critical. In South Africa, retrenchment compensations are governed by Section 189 of the Labour Relations Act, ensuring a fair and lawful process. When facing retrenchment, it’s essential to know what payments you’re entitled to.

Employees who are retrenched are due a severance package, typically one week’s pay for each year of completed service. Additionally, any accrued but untaken leave must be paid out. The notice period pay varies depending on the length of service, ranging from one week for less than six months of employment to four weeks for more than a year.

Other payments might include bonuses, and pension or provident fund contributions, based on the employment contract terms. It’s imperative that the selection criteria for retrenchment be fair and objective, with the Last in, First out (LIFO) principle often applied.

If you believe your retrenchment hasn’t met legal standards, you may refer the matter to the CCMA under certain conditions. For professional legal advice on retrenchment processes and your rights, reach out to Burger Huyser Attorneys, specialising in labor law, for expert assistance.

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