South Africa – How to Protect Your Rights During Retrenchment

South Africa - How to Protect Your Rights During Retrenchment

South Africa – Retrenchment Responses

Many South Africans have been retrenched since the 2009 recession by businesses that struggle to survive in current economic conditions. While the recession may be over, many companies still retrench people on a regular schedule. This guide will help you plan for your financial future if you are concerned about possible cutbacks.


Companies can resign workers under certain conditions according to Section 189 of the Labour Relations Act. Before the company can make the cuts, it must prove that it can’t afford to keep its staff employed full-time.

Your company will inform you in advance if they make the unlucky decision to retrench. The company will give you the opportunity to appeal its decision. If you can show good reasons why you should not be retrenched, you might be able to retain your job. However, this is not guaranteed. You must inform your Trade Union. They will try to negotiate alternatives to the cutbacks.

If requested by a majority of the retrenched employees, you may ask that The Commission for Conciliation, Mediation, and Arbitration(CCMA) appoint a facilitator within fifteen days following a retrenchment notification. They will ensure that your rights are protected.


The law requires that a company offer severance packages to employees who are being retrenched. Although the minimum amount is typically one week’s salary per year of service, many employers offer more. This amount must be added to the Holiday Pay portion that is due to you.

Your employer may pay for any training you need to find another job. You must also be allowed to interview with potential employers.

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Tax-free: The first R 30 000 in your severance package is tax-free


Retrenching is not an easy task. If you are in such a situation, remember that you were not fired but retrenched. Retrenching is not something that should reflect poorly on staff members. It can happen to anyone regardless of their education or seniority.

These tips will help you get back on your feet if you have been retrenched.

* Keep an eye on your expenses. While job hunting, keep your costs down, so you don’t dip into your retirement savings.

* Notify your significant creditors. Arrange a “payment vacation” for your car loan and home loan payments.

* Get out there and share your updated CV with others. This will help you reconnect with people that have worked with you in the past. You will feel less isolated, and you’ll soon find new opportunities.

* Gain a new skill. This could be a great way to boost your career. You will be able to return to the workforce and advance your career by learning new skills.

* Unemployed individuals who have made a contribution to the Unemployment Insurance Fund (UIF) may be eligible for unemployment benefits. Numerous websites can help you determine how much and how long your benefits will be paid. For a period exceeding 8 months, expect to receive no less than 40% of your salary.

Nico Kleynhans, CFP(r), is able to make Financial Management simple to understand. Clients learn how to apply these principles through games, books, and seminars. Numerous organizations have asked him to give seminars that educate staff. He is also the author of SENSIBLE FINANCIAL PLANNING SERIES.

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