{"id":638681,"date":"2022-10-30T11:00:26","date_gmt":"2022-10-30T09:00:26","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=638681"},"modified":"2022-10-30T11:01:20","modified_gmt":"2022-10-30T09:01:20","slug":"what-the-law-says-about-severance-pay-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/638681\/what-the-law-says-about-severance-pay-in-south-africa\/","title":{"rendered":"What the law says about severance pay in South Africa"},"content":{"rendered":"<p>Employees may be offered severance pay if they are dismissed for reasons based on an employer\u2019s operational requirements, says Celeste Snyders from law firm <a href=\"https:\/\/schoemanlaw.co.za\/\" target=\"_blank\" rel=\"noopener\">SchoemanLaw Ltd<\/a>.<\/p>\n<p>Under South Africa&#8217;s Basic Conditions of Employment Act (BCEA), specifically section 41(1), a retrenched employee is entitled to severance pay equivalent to at least one week&#8217;s remuneration for every year of completed service with the employer.<\/p>\n<p>Snyders added that section 41(2) provides for the legal obligation for an employee to pay severance pay.<\/p>\n<p><strong>Who<\/strong><\/p>\n<p>If you have been employed continuously for one year by the same employer and have been dismissed &#8211; you are entitled to severance pay, said Snyders.<\/p>\n<p>Severance pay is offered to employees who have been dismissed for operational requirements, for example:<\/p>\n<ul>\n<li>Economic<\/li>\n<li>Technological<\/li>\n<li>Structural<\/li>\n<li>Similar needs of an employer.<\/li>\n<\/ul>\n<p>Severance pay is also due to those who are let off in terms of section 38 of the Insolvency Act &#8211; if the estate of the employer is sequestrated.<\/p>\n<p><strong>How much<\/strong><\/p>\n<p>The severance package will depend on how long the employee was employed, Snyders said.<\/p>\n<p>When an employee\u2019s service is terminated, the employer must comply with legislation that states severance pay equal to at least <strong>one week of remuneration for each completed continuous year<\/strong> of service to the employer, as calculated in terms of section 35 of the Act is due.<\/p>\n<p>Snyders noted that an employee would only be entitled to severance pay once retrenchment has been concluded.<\/p>\n<p>&#8220;If, during the retrenchment consultation process, the parties agree to a severance package which is more favourable than the minimum package as per the Act, the agreement will replace the statutory minimum.&#8221;<\/p>\n<p>The Bargaining Council and Main Agreements to the Council will stipulate the severance package payable if the employee is a member of a Bargaining Council, said Snyders.<\/p>\n<p>What is the limitation on the right to severance pay?<\/p>\n<p><strong>When not available<\/strong><\/p>\n<p>According to SchoemanLaw, there are a few limitations on the right to severance pay, not limited to the following:<\/p>\n<ul>\n<li>When there is a break in the employee\u2019s service (more than 12 months), the employee will not be entitled to severance pay for the years exceeding the break in service<\/li>\n<\/ul>\n<ul>\n<li>If the employee worked on a fixed-term contract for less than two years<\/li>\n<\/ul>\n<ul>\n<li>An employee will not be entitled to severance pay for the period that he\/she worked as an independent contractor for the employer<\/li>\n<\/ul>\n<ul>\n<li>When an employee reaches the age of retirement, he\/she will not be entitled to severance pay if requested to retire at that age.<\/li>\n<\/ul>\n<ul>\n<li>The employee is not entitled to severance pay should he\/she be allowed to work beyond retirement age<\/li>\n<\/ul>\n<p>It is on the employer to prove that one of the above-mentioned limitations exists to be absolved from the liability to pay an employee severance pay, said Snyders.<\/p>\n<hr \/>\n<p><strong>Read:<\/strong> <a href=\"https:\/\/businesstech.co.za\/news\/government\/638669\/government-slams-us-terrorism-warning\/\" target=\"_blank\" rel=\"noopener\">Government slams US terrorism warning<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Employees may be offered severance pay if they are dismissed for reasons based on an employer\u2019s operational requirements, says Celeste Snyders from law firm SchoemanLaw Ltd.<\/p>\n","protected":false},"author":10,"featured_media":615545,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[26,17533],"class_list":["post-638681","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-headline","tag-schoemanlaw-inc"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/638681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=638681"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/638681\/revisions"}],"predecessor-version":[{"id":638899,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/638681\/revisions\/638899"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/615545"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=638681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=638681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=638681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}