South Africa – Responses to Retrenchment
Since the 2009 recession, thousands of South Africans have found themselves retrenched by businesses that are struggling to survive in the current economic retrenchment benefits singapore . Although the recession is considered old news by some, companies continue to retrench people on a regular basis. If you’re concerned that you may be in line for cutbacks in the future, this short guide will assist you in planning for your financial future.
RETRENCHMENT EXPLAINED
Section 189 of the Labour Relations Act allows companies to retrench workers under certain conditions. Usually, the company needs to prove that it can’t afford to keep its staff employed on a full-time basis before the cuts can go ahead.
If your company takes the unfortunate decision to retrench you, they will need to inform you well in advance that they are considering this option. You will have an opportunity to appeal their decision, and if you can demonstrate good reasons why you shouldn’t be retrenched, you may be able to keep your job, although this is not guaranteed. Your Trade Union has to be informed. They will seek to negotiate alternatives to the proposed cutbacks.
You may request that The Commission for Conciliation, Mediation and Arbitration (CCMA) appoint a facilitator within 15 days after a retrenchment notice, if requested by most of the retrenched workers. They will help ensure your rights are protected.
SEVERANCE PAY
If you are retrenched, the company is required by law to offer you a severance package. The minimum amount payable is usually one week’s salary for every year you’ve worked for the company, though many employers tend to offer more than this amount. To this must be added that portion of your Holiday Pay which is due to you.
You may ask your employer to pay for any retraining you may need to find alternative employment. They also have to give you time off to attend interviews with other prospective employers.
From a taxation point of view, the first R 30 000 of your severance package should be tax-free.