In South Africa, retrenchment is a legally regulated procedure that employers may need to undertake due to no fault of the employee. It’s essential to know that this process is not a result of employee misconduct but rather due to the employer’s operational requirements as outlined in Section 189 of the Labour Relations Act. These requirements can include economic, technological, or structural changes within a company.
During retrenchment, employers must consult with the relevant representatives, which could be a trade union, a workplace forum, or the affected employees themselves, to try and reach consensus on a fair and objective selection process and appropriate severance pay.
Key information such as reasons for the proposed dismissals, alternative options considered, methods for selecting employees for dismissal, and the support provided to the affected employees, must be disclosed.
Employees are entitled to severance pay calculated as one week’s remuneration per completed year of service, outstanding leave payout, and notice pay according to the duration of employment. Additionally, they might receive other dues like bonuses and retirement fund contributions as per their contract.
If you believe the retrenchment process was unfair, you have the right to refer the dispute to the CCMA under certain conditions.
For professional legal support with retrenchment matters, contact Burger Huyser Attorneys. We specialise in labor law
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