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Retrenchment Benefits and Packages in South Africa

Posted By admin / July 30, 2014 / 146 Comments

Retrenchment benefits may seem few and far between but make sure you know your rights in terms of what is due to you and structure your package optimally.

Financial worries can be minimised if you know your rights and get good planning advice to grow your retirement capital.

What can you expect as payment on retrenchment?

1. Severance pay should be at least one week’s remuneration per completed year of service. Remuneration is calculated including basic salary and payments in kind.
2. Outstanding leave must be paid out in full.
3. Notice pay may vary depending on your employment contract.
4. In the absence of a contract, you are entitled to notice pay as follows:

  • If you have been employed for 1-4 weeks: 1 weeks’ notice pay
  • If you have been employed for 4 weeks – 1 year: 2 weeks’ notice pay
  • If you have been employed for more than a year: 4 weeks’ notice pay

Depending on your employment contract, again, you may be entitled to a pro-rata payment of your annual bonus, and the balance of any pension or provident fund benefits.

Tax Issues for Retrenchment Benefits

In South Africa the taxman gives you the first R315,000 of you retrenchment lump-sum free of taxation based on the retirement tax table.  [Please note:  R500,000 as of 1 March 2014]

The portion of your lump-sum that exceeds this exemption amount will be taxed based on the same tables.

How to Reduce Tax on Retrenchment Benefit

  • Lump it all together
    Ensure your company puts all your payments due as part of your lump-sum.
  • Assets instead of Cash
    If the company gives you an asset in lieu of cash, you pay perks tax on the market value of the asset. This may range from ‘negligible’ (in the   case of a laptop computer) to ‘substantial with attendant running cost’ (for the company car). So think carefully.

Guard Your Retirement Portion of Retrenchment Benefits

You have three possible options with your pension or provident fund payout.

  • Spend it
    This is the worst possible option. Firstly, you will make a large,   ‘voluntary’ contribution to the Taxman’s coffers and secondly, in all likelihood you will never build the capital up again.
  • Invest via a retirement annuity
    With this option, you cannot withdraw any of the capital until you reach the age of 55. This has the advantage of locking in your     retirement savings and you pay no tax on the transfer.     
  • Invest via a preservation fund
    This is similar to a retirement annuity, but such a fund allows a single withdrawal of up to 100% of the amount before the age of 55. Again, you pay no tax on the transfer.


Copyright Netto Invest – www.netto.co.za 

 

Please note:

  • We regret to advise that the comments section for this article has closed. 
  • You’ve Earned It/YEI is not the author of this article,  and therefore is not in a position to advise on finance or retrenchment matters. 
  • If you are in need of retrenchment advice, we advise you to contact your HR Department for advice regarding early retirement and/or retrenchment matters. 
  • We further recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.
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Comments

146 Comments

  • izak smith
    May 13, 2013 at 12:56 pm

    I am 57 years of age, and the mine said that they give me early retirement and retirement also is at hand now. I don’t know what is going to happen and what I must do .
    I am currently working on one of the shafts at Komamani 2 which the people is talking about to be closed .
    Please assist me in this matter, what will be the best to do .
    Take early retirement, what is in that for me i have 3 years to go .
    Or do i take retrenchment .
    or can i take both .
    please help me with this, i believe you understand what i need .
    Thank you very much

    • Marilynh
      May 14, 2013 at 11:24 am

      Thank you for your query, Izak.

      YEI is not in a position to advise on finance or retrenchment matters. However, we do suggest that you make an appointment with a Financial Advisor who will review your specific position and financial situation, and will thereafter be in a position to advise you on the financial way forward. The company’s HR manager should be able to assist you regarding early retirement and/or retrenchment matters. We recommend you contact a labour lawyer should you feel the need for independent advice on the labour matters at hand.

      Kind regards
      Marilyn, YEI Editor

  • Keith Dennis
    July 24, 2013 at 1:44 pm

    I will be retrenched as from the 31 July 2013, My total notice pay and leave pay add up to R 29 300.00. Do I pay tax on this.

    • August 15, 2013 at 12:24 pm

      Hi Keith,

      The accumulated leave does not form a part of the severance package and is taxed as a normal salary.
      Retrenchment benefits are taxed in aggregate according to the retirement tax tables as follows:
      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Assuming you have not withdrawn any funds from a retirement fund or been retrenched before, your severance package portion would be tax free.

  • LSK
    July 25, 2013 at 7:22 pm

    I earn a salary of “x”, a subsistence allowance of “y” and a cellphone allowance of “z”. When my employer pays me my final amount, what does he pay me for?

    • August 15, 2013 at 12:23 pm

      Hi LSK,
      An employer must pay a minimum severance pay of one week’s wages for each completed year of service. You should discuss with the employer on including your full package.

  • rochelle
    July 29, 2013 at 9:58 am

    I have been working since 2005. the company has been sold to 3 times, however same building, same type of business, i am the was the only full time employee. Should i be paid a severance package from 2005 or only the last 2 years under the new ownership. Does a sale agreement make any defference regarding my retrenchement package?

    • Marilynh
      August 1, 2013 at 6:20 am

      Thank you for your queries, Rochelle, LSK and Keith

      We have advised the author of this article of your queries, and are awaiting response.

      YEI is not in a position to advise on retrenchment matters. However, we do suggest that you make an appointment with your company’s HR manager who should be able to assist you regarding retrenchment matters. We recommend you contact a labour lawyer should you feel the need for independent advice on these labour matters.

      Kind regards
      Marilyn, YEI Editor

    • August 15, 2013 at 12:22 pm

      Hi Rochelle,
      Assuming your employment contract has not changed and you did not sign a new letter of employment you most likely qualify for a retrenchment package based on your employment since 2005, you should confirm this with your HR department and consult a labour lawyer if unsatisfactory.

  • dude
    August 30, 2013 at 1:33 pm

    I am 25, been working for 6 months, the company is getting ready to retrench and was given the option of a vsp, the severance payment is 96 00. will i be taxed for this?

    • Marilynh
      September 1, 2013 at 10:12 am

      Thank you for your query, “Dude”. We have advised the author of this article of your query, and are awaiting response.

      As mentioned previously in response to other comments, YEI is not in a position to advise on retrenchment matters. Although the author of the article will respond to your comment, we suggest that in addition you liaise with your company’s HR manager who should be able to assist you regarding retrenchment matters. We also recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.

      Kind regards
      Marilyn, YEI Editor

    • September 2, 2013 at 4:19 pm

      We are sorry to hear about your retrenchment predicament and we wish you well in the future.
      The taxation is as follows:
      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Assuming you have not withdrawn any funds from a retirement fund or been retrenched before.

  • katlego
    September 3, 2013 at 10:43 am

    Hi

    I just want to find out I once heard that people that were retranched from the mines long time ago in South Africa were called to come claim their retrenchment funds is ir true? and if it is true how do you go about in claiming cause both my parents were retranched and they have passed away.

    • Marilynh
      September 3, 2013 at 10:58 am

      Dear Katlego

      Thank you for your comment. Claiming retrenchment funds after the event does not sound correct. We would suggest that you direct your query to the HR Department of the mine concerned.

      Kind regards
      Marilyn, YEI Editor

  • Dorothy
    September 11, 2013 at 7:41 am

    Good day, I am being retrenched at the end of this month and my retrenchment package is R70000. What will I be taxed on that?
    Kind regards
    Dorothy

    • September 16, 2013 at 2:41 pm

      Sorry to hear about your retrenchment, we wish you all the best in your future.
      The taxation is as follows:
      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Assuming you have not withdrawn any funds from a retirement fund or been retrenched before.

  • Viczy
    September 25, 2013 at 8:04 pm

    We were notified beginning June via email of potential changes within the operation of the company and all its subsidiaries and that all efforts would be made to minimize potential employee terminations.

    On 21st August at 09H26 the few that did not make it, to move with the company, were notified of a Consultation Meeting taking place at 10am. I’ve worked from home for the past 10+ years and it takes me close to 2 hours to get to the offices. Needless to mention I clearly could not make that meeting even if I could fly.

    In this meeting the staff were handed a copy of a memo addressed to all Personnel with the heading: Operational Restructure of (the company) and its subsidiaries, which reads as follows:

    The above mentioned refers and more specifically the notice of terms of section 189(3) dated 03rd June 2013 …….…… restructuring will depend on representations made by you during the upcoming consultation processes to be held between today and 31st August 2013.

    We’re already in September 4th, how long can they drag this out?

    They’ve employed someone about a month or two ago to assist someone; I have a feeling that this person will be doing more or less what I’m doing, but just with a different job title/description, because I’ve noticed that the new employee’s been scratching in my work placed on the system.

    What are my legal rights?

    There’s also been an enormous staff turnover, to the point that I did not know who was actually going to sign my leave form.

    I’ve also been with the company over 16 years and have been the only employee that does this kind of work. I’m also fully aware that no one is indispensable, but at the same time, if no one talks too you or lets you know what’s happening, how will you know of any problems, within the company.

    To date, we still don’t have a clue of what’s going to happen. What are my legal rights?

    • October 17, 2013 at 10:06 am

      Sorry to hear about the experiences you are having, it must be very unsettling.
      If you are unable to resolve your queries with the companies HR, then you should consult a labour lawyer to understand all your legal rights.

  • Jimmy
    September 26, 2013 at 11:59 am

    Good day,

    I heard rumors that the company may close down as a result of poor performance. Does this constitute a case for retrenchment or can management decide to close down and just let us go, fire us so to speak.

    Thanks.

    Jimmy

    • Marilynh
      September 26, 2013 at 12:13 pm

      Thank you for your queries, Jimmy and Viczy

      We have advised the author of this article of your queries, and are awaiting response.

      YEI is not in a position to advise on retrenchment matters. However, we do suggest that you make an appointment with your company’s HR manager who should be able to assist you regarding retrenchment matters. We recommend you contact a labour lawyer should you feel the need for independent advice on these labour matters.

      Kind regards
      Marilyn, YEI Editor

    • October 17, 2013 at 11:03 am

      Hi, suggest you first discuss with you your HR department, if unsatisfactory you should consult a labour attorney to understand your rights if the company is closing down.

  • mkhululi tshabangu
    October 14, 2013 at 6:54 am

    the company has started consultation procedure before retrenchment now they want to outsource the duties l was doing to me(deliveries and visas) they mentioned it as asuggestion must l agree to it or we go the retrenchment route first and talk about that later,now is that in a way not trying to avoid paying me a retrenchment package ??

    • October 17, 2013 at 11:28 am

      Hi, the retrenchment process is a legislated consultation between the employers and employees. You will need to carefully consider the offers and make a decision based on what is most suitable for you in the long run.

  • Angelica
    November 4, 2013 at 6:47 am

    Hi;

    I got taxed 30% on my severance pay by my company. The severance pay was calculated on only just my basic salary, but i had benefits – car allowance, cellphone allowance. Are they allowed to tax me and only pay on Basic salary?

    I feel i was robbed! Help

    • Marilynh
      November 5, 2013 at 7:05 am

      Dear Angelica
      We have asked the author of this article to respond to your query.
      Kind regards
      Marilyn, YEI Editor

    • December 6, 2013 at 7:54 am

      Hi Angelica,
      Sorry to hear and we wish you well with your future.
      A severance package is a negotiation offer from the employer, the most common been an offer of 2 weeks’ salary for every year worked, but the employer can offer any amount to incentivise you to take the offer. The process is legislated but the amount offered is not pre-determined, as employees do not have to accept the offer.
      The tax applied to a severance package is according to the retirement fund tax table as follows:
      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Assuming you have not withdrawn any funds from a retirement fund or been retrenched before, as the table is aggregated over your lifetime.

  • Rochelle van der Merwe
    November 15, 2013 at 8:44 am

    Good morning
    We were all retrenched in the company because of restructuring.

    A few of us were employed after a interview.

    The laywer handeling the process for the company is now talking about “Transfer of contract employment”. This was never mentioned on the day that we were informed that everybody was retrenched. He said everybody will be payed out and then the open jobs will be open for a interview.

    Are the new employees going to loose the severage package (leave and one weeks pay for every year)?

    • Marilynh
      November 15, 2013 at 9:06 am

      Dear Rochelle

      Thank you for your enquiry. This will be forwarded to the author of this article for response.

      Kind regards
      Marilyn

  • Rochelle van der Merwe
    November 15, 2013 at 8:59 am

    Good morning
    We were notify that we were all retrenched at the company and that there will be a restructuring of the company.
    New employees will be employed once interviews are done.

    Few of us were employed.
    The laywer is referring to our emplyment as “Transfer of Contract of Employment”.

    Does this mean that we are not going to be payed out our severage package (leave and one week for every year)?

    • December 6, 2013 at 7:56 am

      Hi Rochelle,
      Sorry to hear about the circumstances, but glad to see that you have been rehired. You will need to discuss this with the Human Resources department and get everything in writing. If you are not been paid a severance package then you are possibly not been retrenched, but should also not lose any accrued benefits or experience a decrease in pay. Recommend you consult a labour attorney to review the process and contracts.

  • Naazbud
    December 3, 2013 at 7:46 am

    Hi i am getting retrenched and have Garnishees on my salary would that Garnishees come out when they pay me my salary and notice payment and severance pay???

    • December 6, 2013 at 7:57 am

      Sorry to hear you are in a difficult position. Your employer should provide you with a copy of the order; if unclear, an attorney or debt counsellor may need to review the contract for you.

  • January 10, 2014 at 7:59 am

    I would like to know if you get retrenched are you supposed to get paid a basic salary and notice pay or notice pay only. After you have been paid your severance and leave.

    • Marilynh
      January 13, 2014 at 10:03 am

      Dear Beauty

      Thank you for your query. This has been forwarded to the author of this article for comment.

      Kind regards
      Marilyn, YEI Editor

      • mary
        June 2, 2015 at 12:28 pm

        Im retrenched on 8 april. Receive my notice pay on 6 may. Still waiting for my retrenchment benefit to pay out. What is the notice period for retrenchment package to payout. There is no communication about when to expect payouts. There is alot rumours about options to chose from because company is under Business Rescue. They wanted to payout 50% of package and other 50% 31 October. Is this acceptable?

    • January 15, 2014 at 1:33 pm

      Dear Beauty,

      If you are going through a retrenchment then sorry to hear.
      An employer must give notice to an employee before terminating the contract. The notice period is dependent on the job description and how long the employee has worked for the employer and ranges from 1 to 4 weeks. An employer can elect to pay out the notice period instead of giving notice; in this case you would receive notice pay over and above the severance pay. If however the employer fulfilled the notice period (maximum 4 weeks) then no notice pay would be due.
      Your basic salary is payable for time worked and leave due, and is also not related to the severance pay.

      In summary you are entitled to:
      • Basic salary for time worked (leave & normal pay)
      • Notice period or notice pay (1 to 4 weeks)
      • Severance pay (retrenchment offer)

  • Marilynh
    January 22, 2014 at 9:24 am

    Email enquiry sent to YEI

    HI IM 38 YEARS OLD AND WORKING FOR THIS COMPANY FOR 8YRS. I HAVE BEEN TOLD ABOUT THE RETRENCHMENT LAST WEEK FRIDAY. MY EMPLOYER WAS SO MEAN TO ME AND HE TOLD ME NO MATTER HOW LONG I WORKED FO HIM I WILL BE RETRENCHED. I ALSO REALISED THAT THEY WERE USING ME TO GET THEIR BEE CERTIFICATE . THEY SAY I EARN R10 000.00 MEAN WHILE I DON’T EVEN GET HALF OF THAT. WHAT PROCEDURES SHOULD I TAKE . MANY THANX FOR YOUR HELP

    • January 30, 2014 at 8:10 am

      Hi Marilyn,

      Sorry to hear that you are in a very unfortunate position, you should consult with a labour attorney or contact the CCMA.

  • Tilly
    January 29, 2014 at 5:05 am

    Hi there. My company has to downscale. I have been told I can take a voluntary retrenchment or they will retrench me anyway. What is the difference taxwise? I have a company car and would like to purchase from them +- R50 000. Is this wise? Also notice month is Feb. Is it not better for them to pay in March so my tax goes to following financial year as I might not get a job(55) and then my salary 2013 will appear high.I have been with them 14years. When we started we had a Life policy and they contributed to med aid. About 7 years ago they stopped with the policy and we were paid out and about two years ago they stopped the med aid.

    • Jennifer
      January 30, 2014 at 11:16 am

      Hi. We are also going through retrenchments. I’ve been told that a voluntary retrenchment is considered practically the same as a resignation and therefore you will not receive the same tax benefit as you would in retrenchment. I ‘waited’ for my retrenchment so I would get the tax benefit.

    • February 17, 2014 at 2:46 pm

      Sorry to hear about your situation, we wish you the best for your future career or retirement.
      By taking a voluntary retrenchment, the retirement table’s tax will not apply to the severance portion of your benefit and is taxed as normal income above any income you have already earned.
      A compulsory retrenchment is taxed as follows:
      The severance package (excludes leave and salary already owed) is taxed according to the retirement tax table, and is applied in aggregate over your lifetime as per below:

      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Assuming you have not withdrawn any funds from a retirement fund or been retrenched before, as the table is aggregated over your lifetime.
      As the severance package is not taxed as annual income, there is no effect on when you receive it in the tax year.

  • Lanch
    February 19, 2014 at 10:19 am

    Hi
    i worked for 3yrs and 6mnths before i was retrenched effective 30th of October 2013 after which the company pledged to pay me a Months salary (which i thought was the standard 1 weeks severance for every 1 year worked) for November as a “gesture of Goodwill”

    This got paid out with commissions, Annual leave due and normal salary taxed.

    Knowing that i was due 1 weeks severance for every 1 year worked i am a bit uncertain as per my situation regarding severence untaxed.

    • March 11, 2014 at 6:13 am

      Sorry to hear about your retrenchment, the annual leave, commission and normal salary is taxed as normal gross income; the severance portion is taxed as follows.
      The taxation is as follows:
      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Assuming you have not withdrawn any funds from a retirement fund or been retrenched before.

      • Palesa
        July 3, 2015 at 8:00 pm

        Hi
        I am getting retrenched but not really sure when. Have been with the company for 13 months. How is the severance package calculated

  • Nokuthula
    March 7, 2014 at 7:42 am

    Hi Im 26 years old, im being retrenched at work. I have worked for the company for 4years I would like to know if my payout should be 1week salary for each year worked or should it be 4week salary for each year worked? I would also like to know if it is legal for company to retrench employees while they are not making any loss? The reason for the retrenchment is because they want to run the company online.

    • March 11, 2014 at 6:36 am

      Hi,

      A week’s salary per year employed is correct. Retrenchment is a consultation process with defined steps, which vary dependent on the size of the company. You should consult a labour attorney to address any issues you may have with regard to the process.

  • Juan
    March 25, 2014 at 1:44 pm

    Hi i am getting retrenched at the end of april and i dont have any back up plan i am only getting my basic salary leave dew that is it i will be able to colect my uif and thats that, how will the retrenchment process work

    • Marilynh
      March 25, 2014 at 2:16 pm

      Thank you for your comment, Juan and sorry to hear you are being retrenched.
      Your comment will be sent to the author of this article, who will no doubt respond to this as soon as she can.
      All the best.
      Regards
      Marilyn, YEI Editor

    • March 25, 2014 at 2:48 pm

      Hi, sorry to hear.

      There is a consultation procedure that needs to be followed as per the Labour Relations Act, if you know you are being retrenched then it is assumed this has been complied with. If you are unhappy with the process you would need to consult a Labour Attorney or the Commission for Conciliation, Mediation and Arbitration (CCMA).
      Retrenched workers are entitled to 1 week’s pay for every year of service based on Legislation in Section 41, of the Basic Conditions of Employment Act.
      This is over and above your normal salary and leave pay due.
      If you are not due any severance pay then you will receive your pay as per your normal method after your final month of employment.

  • john dandy
    April 1, 2014 at 5:19 am

    Hi
    I have just taken a “voluntary separation” package due to a company restructure. A new position has now just been posted in the very same company (and division that is posting losses which brough about the retrenchments!) that I would be suitable for.

    Would I have to pay back the balance of my separation package as the companies HR has indicated that I would have to??? IE: If my final day of work was March 31st and I start May 1st, I would not have to pay April’s time back but would have to pay the remaining months back. No where in my separation package does it mention any such thing?
    In this regard. If I was re-employed and that wanted the remaining balance back, could I then stipulate that I want my years of service re-instated from a retrenchment perspective? The reason being is that if they carry out another “re-structure” I would be worse off with no years of service and only 4 weeks retrenchment.
    Let me know if you can as I know this is not a normal situation but I am sure others may have had this very same challenge.

    • Marilynh
      April 2, 2014 at 5:59 am

      Hi John

      Your query will be sent to the author of the article for response.

      Kind regards
      Marilyn, YEI Editor

      • Ishmael mhangani
        August 23, 2015 at 10:41 pm

        Our company retrenching after 3 months pay is in legal?
        My wages is R1658 after deduction and i have 5 years so how much money i suppose to have?
        The say first in last out but i have qualification

        Pls help me

    • April 8, 2014 at 7:02 am

      Hi, firstly, good to hear you have an employment opportunity.
      You have raised valuable points that you will need to clarify with your HR department. Whilst you do not want to put yourself in a worse off position, you also do not want to lose the opportunity. You need to review these queries with the company and reach an agreement that is beneficial to both parties.

  • Jenny
    May 3, 2014 at 3:33 am

    Hello

    I would please like to find out is the severance Pay worked out cost to compay or just on a basic salary? The compay that I worked for was paying half of my medical aid and RA.
    Also should my notice month also include this? Should they still pay half buy to me and not the medical or RA as I had to pay it myself?

    Regards

    Jenny

    • May 8, 2014 at 12:34 pm

      Hi Jenny,

      The severance pay is calculated on your salary/income and not the cost to company.
      Your notice period is as follows:
      Worker employed for… Notice Period
      6 months or less 1 week
      More than 6 months, but less than 1 year 2 weeks
      1 year or more 4 weeks

      The notice period is not included in severance and is as per your normal salary, you can agree to leave before the end of your notice period however, and the income you would have received is still due and does not form a part of your severance benefit. The notice period should include any benefits you enjoyed up to that point.

      Kind regards

  • Judes
    May 6, 2014 at 1:21 pm

    I have been working for the company for 5 years now. My boss told me about a possible retrenchment. If so, they will pay me out 8 months, 5 months for each year that I have worked and another 3 months. According to her, that is the law, but I only see 1 week for each working year on your site. I just want your opinion.

    • May 8, 2014 at 12:35 pm

      Dear Judes,

      You are correct, the minimum an employee should receive as a severance offering is 1 week’s salary for every year of service. As in your case, the employer may choose to offer more than the minimum.

      Kind regards

  • Najwa Canfield
    May 8, 2014 at 11:43 am

    Good day. I have accepted a voluntary retrenchment on 10.04.2014. The Agreement stated notice period from 01.04.2014 (for one month). They have now taxed me based on my last day of work which was 10.04.2014. I earned R15 665 pm.

    Tax calculations were as follows:

    Normal Cash Pay = R15 665 – R3 549.16
    Occasional Income (Retrenchment of R10 853.35 + leave encashment of R2 349.46) = R13 202.81 – R3 960,84.

    I have made queries as it seems incorrect and received the following response:

    ” Her tax calculation is correct, as her termination date is 10th of April all income paid to her for April
    Is deemed to have been earned in 10 days therefore her tax periods shows 1.3333″

    Would you kindly advise please?

    Thanking you,
    Najwa

    • May 8, 2014 at 12:36 pm

      Dear Najwa,

      Unfortunately there is not sufficient information to assess your Tax query, and we are hesitant to make certain assumptions, you should contact a Tax consultant or visit your nearest SARS office with all the information to review the calculations.

      Kind regards

  • Sam
    May 8, 2014 at 3:51 pm

    Hi,

    I was retrenched on 25 May 2014, and told that he would pay until the end of April. on 3 May I only received one weeks pay as I had found a job soon after notice was given.

    What am I entitled to if I left a week after notice was given?

    Thank you

    • May 9, 2014 at 8:28 am

      Hi Sam,

      Congratulations on finding employment so quickly.

      An employer has to provide a notice period, the term of which depends on your completed years of service.
      The employer may decide to waive the notice period, but the amount you would have received during the notice period is still due to you. If you elect to leave before the end of the notice period without agreement from the employer, they will have a claim against you and will not need to pay you to the end of the notice period.

      A severance benefit is paid on retrenchment and is at least 1-week pay per year worked; this payment is not related to your notice period. However, if you resigned (leaving before end of notice period based on your decision) then you may not have being retrenched and might not be entitled to a severance benefit, a labour attorney would need to review this for you.

  • Plum
    May 15, 2014 at 6:01 am

    Good day
    I am turning 60 in November and have been advised that I have to retire. Last working day will be 28 November. I have been employed by company for 13+ years. Besides Pension / Provident what other benefits are due to me
    Many thanks

    • May 15, 2014 at 10:12 am

      Hi,

      You should be able to claim UIF benefits for a period of ±6 months on retirement, the forms will need to be completed by you and your employer.

      Kind regards,

  • Danie Fourie
    May 15, 2014 at 1:54 pm

    Hi

    My wife is being retrenched and we would like to use her pension money App 1.5 mil to buy a second house. What will the best option be to pay the least amount of tax. Do we transfer the money to a provident fund and then make a withdrawl. Her severance package will amount to app R220 000

    • June 2, 2014 at 10:13 am

      Hi,

      There is no difference how you draw the money out, the Tax is calculated according to the tables mentioned below and is quite severe for that amount. One would usually try avoiding that sort of transaction as the Tax may negate or greatly reduce any benefits you could accrue from the property. The other option would be to make use of preservation or living annuity strategy to significantly reduce or even remove the Tax liability; the option would be dependent on your long-term financial plans.
      1st R500 000 tax free
      Next R200 000 taxed at 18%
      Next R350 000 taxed at 27%
      Thereafter taxed at 36%

  • henk
    May 18, 2014 at 8:03 am

    Hi there, I see you give the tax lay out and then mentioned if you didnt make a withdrawel, myproblem is I borrowed 50 000 for a second property, how will that effect me.kind regards

  • Henk
    May 18, 2014 at 8:06 am

    Hi there, I borrowed 50000 for a 2nd property, how will effect my tax, regards

    • June 2, 2014 at 10:16 am

      Hi,

      There is not enough information to calculate the Tax, your pension fund administrator will apply for a directive from the South African Revenue Services on your behalf and pay the Tax accordingly.
      Severance benefits (retrenchment) and withdrawals are taxed according to different Tax tables, however they are applied in aggregate, in other words, you could have a severance benefit of R300 000 which is Taxed according to the retirement Tax tables. If you then withdraw R50 000 from a preservation fund this would be Taxed according to the withdrawal Tax tables, but you would be starting from R300 000 and not R0.

  • RM
    May 22, 2014 at 11:47 am

    Hi there

    i have been at a company for 5 years and am now being retrenched, they have offered to settle with the following:
    1 months notice pay
    leave pay
    severence pay (5 weeks)

    all this adds up to R70k. what taxes should be take off by the company so i know what to expect?

    i have decided to move my pension fund savings to a preservation fund (not noted in the R70k above)

    • June 2, 2014 at 10:17 am

      Hi,

      The notice and leave pay are Taxed as income as a part of your normal annual gross income for the year according to the South African Revenue Services (SARS) income Tax tables.
      The Severance benefit is Taxed according to the retirement Tax tables as follows:
      1st R500 000 tax free
      Next R200 000 taxed at 18%
      Next R350 000 taxed at 27%
      Thereafter taxed at 36%

      • RM
        June 4, 2014 at 9:24 am

        Thanks for the feedback, much appreciated

  • Arthur
    May 23, 2014 at 12:14 pm

    Is notice pay considered part of a retrenchment package? How does that value get taxed?

    • June 2, 2014 at 10:18 am

      Hi,

      The notice pay is not part of your severance pay and is Taxed as income as a part of your normal annual gross income for the year according to the South African Revenue Services (SARS) income Tax tables.

  • Celeste
    June 3, 2014 at 10:51 pm

    Hi

    Nearly a month ago I was told to relocate up country or I could opt for retrenchment, voluntary or mandatory. I opted for the voluntary as I don’t have much finacial responsibility in terms of debt. Besides I will gain more than the mandatory 1 week per year employed since I’ve only been employed 4 years.problem now though is that I’ve notified my employer of my decision and I’m still awaiting the agreement. Also, during my last consultation they advised that my severance package will only be paid out next month and my last working day is 30 June 2014. And my leave pay is included in that payout. Is that allowed? I’ve been retrenched before and all payment was made to me on my last working day so I’m just wondering.

    • June 26, 2014 at 3:03 pm

      Hi Celeste,

      You may need to consult your Human Resources department or even a Labour Attorney, it is important that you have an agreement before proceeding. The severance benefit is separate to the leave and salary due, these are benefits you already earned and do not form part of an offering for retrenchment.

  • June 17, 2014 at 10:59 am

    The company that I am working for is closing down.I am working at the company for almost three years.What would I expect in terms of a package?I heard rumours that we are only getting two months salary,provident fund and what ever leaves days that is outstanding.

    • June 26, 2014 at 3:04 pm

      Hi Sylvester,

      It can depend on company size, but you should expect 1 week per year worked, this would exclude any leave due, salary due, or pension or provident fund investments.

  • Alfred
    June 25, 2014 at 8:35 pm

    Good day.

    We are being retrenched and have all the necessary information concerning how I will be taxed on the retrenchment package.My question though is,if I take my full provident fund amount now after 5 years,how will it be taxed,seeing i’m being retrenched?Is tax worked out the same way regardless of me being retrenched?

    • June 26, 2014 at 3:04 pm

      Hi Alfred,

      The Tax on withdrawing from your provident is according to the withdrawal Tax tables. The Tax is calculated in aggregate for your lifetime as follows:
      1st R25 000 tax free
      Next R635 000 taxed at 18%
      Next R330 000 taxed at 27%
      Thereafter taxed at 36%
      Note in aggregate, so the table does not start from zero, it starts from the total value of all your previous severance benefits and other withdrawals in your lifetime.

  • Chad
    July 7, 2014 at 10:01 am

    Hi YEI,

    Firstly, thank you for the insight into the implications of tax on my severance pay.

    My query is to the tax implications on a split payout. Should my company wish to split the severance payout over two months (as it is a ‘large’ sum for the company), will I still qualify for the R315k exclusion?

    My total amount is under R315k, but they still wish to split it to ease the burden on the company.

    Thanks in advance.

    • July 7, 2014 at 1:32 pm

      Hi,

      It does not matter how you receive the severance package as the tax is in aggregate (accumulates) for your lifetime according to the retirement Tax tables below.
      1st R500 000 tax free
      Next R200 000 taxed at 18%
      Next R350 000 taxed at 27%
      Thereafter taxed at 36%

  • Marina
    July 9, 2014 at 11:16 am

    Good day I was dismissed in April this year due to misappropriation of company assets. I paid half the amount owing before my dismissal and the rest was deducted from my last salary. All my provident fund docs were handed in at the end of April. I contacted the administrators last week to find out what the delay in payout was, they said my previous employers have issued a court order and they couldn’t continue with my fund payout. I have not been informed of this only by my enquiry with the fund administrators did I become aware of the court order. Is this legal ?

    • July 9, 2014 at 4:10 pm

      Dear Marina,

      You will need to consult an attorney to assist if there is a court order in place.

  • Chantelle
    July 10, 2014 at 2:52 pm

    Hi
    I have picked up discrepancies in the responses to the table and portions of a severance package that are tax free. Some answers say the first R315k and other R550k? According to the Treasury’s Tax pocket Guide for 2014 it is the first R550k?
    Appreciate your response.
    Regards
    Chantelle

    • July 11, 2014 at 10:11 am

      You are correct and very astute of you.
      The retirement tax tables changed in March 2014 and the responses to the article started in May 2013.
      Previous retirement tax table (pre March 2014)
      1st R315 000 tax free
      Next R315 000 taxed at 18%
      Next R315 000 taxed at 27%
      Thereafter taxed at 36%
      Post March 2014 (present) retirement tax table
      1st R500 000 tax free
      Next R200 000 taxed at 18%
      Next R350 000 taxed at 27%
      Thereafter taxed at 36%

  • Greg
    July 21, 2014 at 10:50 am

    Good day

    Please forgive my ignorance, but I have been advised that the company I work for is relocating to the Western Cape in November & I will therefore be retrenched. I have been employed for 11 years (this coming December) so I presume I’m entitled to a minimum of 11 weeks salary. My question is – If I find alternative employment BEFORE November, am I still entitled to a retrenchment package.

    • July 24, 2014 at 11:55 am

      Hi Greg,

      If you resign to take up an alternative opportunity before the retrenchment then this is unlikely to be accepted as a retrenchment, you may need to consult with a labour attorney for a legal opinion.

  • Lulu
    July 22, 2014 at 2:04 pm

    Good Day

    I have accepted a VSP. My pension is R460,000 and my severance pay is R128,000. I am 33 years old and only have a car debt of R138,000. I’ve been told that I can claim up to R500,000 tax free for my pension and that the severance pay is also tax free. I would like to know the following:

    1. Would it be advisable for me to pay off my vehicle?
    2. I intend on investing my my pension through Satrix top 40, Allan Gray Coronation. I was told that I can afford to go for a more aggressive plan than a pension preservation fund, as I am still far from retirement. Is it sound advise?
    3. Can I still claim UIF even though I accepted voluntary retrenchment?
    4. What would the tax implications be if I chose to invest in Satrix 40 or the other investments mentioned in question 2?

    Thank you for your help!

    • July 24, 2014 at 11:57 am

      Hi Lulu,

      Your queries require financial planning advice (preferably from a qualified certified financial planner) as there are other factors that need to be included that could affect your decision, however, we can comment on the tax on this forum.
      The severance benefit and pension fund are taxed separately. The severance according to the retirement tax table and the pension according to the withdrawal tax table as per below.

      Retirement tax table:
      Post March 2014 (present) retirement tax table
      1st R500 000 tax free
      Next R200 000 taxed at 18%
      Next R350 000 taxed at 27%
      Thereafter taxed at 36%.

      Withdrawal tax table:
      1st R25 000 tax free
      Next R635 000 taxed at 18%
      Next R330 000 taxed at 27%
      Thereafter taxed at 36%

      Note they are taxed in in aggregate, so the table does not start from zero, it starts from the total value of all your previous severance benefits and other withdrawals in your lifetime. Assuming no previous withdrawals or retrenchments, then the severance benefit can be received tax efficiently, however, withdrawing from the pension fund will taxed at 18% as you have already withdrawn R128 000 (severance benefit) which comes to ±R82 000.

      Briefly, the tax paid to withdraw the pension fund is high as it encourages us to preserve the investment until retirement; you should generally avoid withdrawing pension fund savings until retirement when the tax will be far lower.

  • booi
    September 27, 2014 at 3:50 am

    hi

    Im a Project Leader.
    I like to find out as when i had sign a contract with the company for the duration of a certain project and get retrenched before the project ends .I’m getting retrenched end of October 2014 but the project ends only August 2015.What am i entitled to ?Please advise ?

    • September 29, 2014 at 8:53 am

      Hi Booi,

      As you are not an employee your contract agreement will determine how the retrenchment applies, you should consult a labour attorney or the CCMA to review your options.

  • Yolandie
    October 10, 2014 at 5:50 am

    Good morning. I would like to know, if a company retrench you can they pay out your severance pay out to you over a period of 6 months?

    • Marilynh
      October 10, 2014 at 5:59 am

      Dear Yolandie
      Your query will be sent to the author of this article for response.
      Kind regards
      Marilyn, YEI Editor

    • October 14, 2014 at 6:52 am

      Hi Yolandie,

      Normally you are paid as a lump sum, advice from a labour attorney will be needed to confirm whether monthly payments are possible.

  • Jan
    October 13, 2014 at 2:56 pm

    I see that the response in regard to provident fund tax is the same when it comes to Voluntary Retrenchment and “normal” Retrenchment?

    I had a hearing for incapacitation due to ill health, now the company terminated my employment verbally but is forcing my hand to sign for Voluntary Retrenchment… they are offering me a package whereas they claim if I do not take Voluntary Retrenchment I get nothing.

    My question is, my provident fund is R220 000 how would it be affected by tax based on Voluntary Retrenchment or Incapacitation? Which one would be more harshly taxed?

    Also if I take Voluntary Retrenchment will I still be able to claim UIF?

    • October 14, 2014 at 7:03 am

      Dear Jan,
      Hi Jan,

      Sorry to hear you are facing these challenges.
      You should consult a labour attorney, as you cannot be retrenched due to ill health.
      If your ill health is accepted as a disability (according to the South African Revenue Services) then there is no tax difference with regard to accessing your provident fund.

  • Landi Smith
    October 13, 2014 at 5:40 pm

    i started working for franchise company last year November 2013 and this year in march the management changed, therefore we were given new contracts. Now the company is shutting down end of this month .my concern is will the previous months i worked for with the previous mangement matter in retrenchment package and how many months should one have in in order to qualify for a retrenchment package. please help me. thank you

    • October 14, 2014 at 7:12 am

      Hi Landi,

      Severance pay is expected to be at least 1 weeks’ salary per completed year of service, so you may be entitled to a week’s salary if you are retrenched ending October 2014.

  • Boity
    October 14, 2014 at 4:50 pm

    my notice pay was taxed more than my normal salary. is this accepatable?

    • October 20, 2014 at 8:22 am

      Hi Boity,

      Assuming by notice pay you mean your severance (retrenchment) benefit, then this payment is taxed according to the retirement tax tables as mentioned in earlier replies below, and not part of your normal salary income.

  • Anwar
    October 16, 2014 at 7:58 pm

    Hi. Firstly it’s such a relief to know that there are people like yourself that are willing to assist. I’m a sales manager of one of four divisions within our company. I’ve been handed my possible retrenchment letter due to my job becoming redundant as the company plans to do away with the part of business that I was heading. They did ask that I propose any possible area or position that I see myself fit in within the structures in place with a view that the company is restructuring its business. I was shown the organogram of 1 part of the business which I do not see any opportunity to fit into. However when I asked about the sales division, I was told that this will be falling into a new business and has not been finalised as yet. I’m led to beleive the person that will be heading the sales within this division also has the required skills to do this job, but joined the company after I did. The fact that I also have the experience, skill, knowledge and qualification to do his job, but joined the company before he did, should LIFO not be implemented, i.e. I take over his position and he be in line for retrenchment based on LIFO. In my position as Sales Manager, I had the use of a company petrol card for personal and business usage. Should this not be taken into consideration when working out my package? Thank you for your asstance.

    • October 20, 2014 at 8:23 am

      Hi Anwar,

      Sorry to see that so many are in this position.
      With regard to your first query, you would need to consult a labour attorney or the CCMA to review your rights for further employment within the company.
      The petrol card usage for private use should be included in the severance calculation; and use for business should not be included in the calculation.

  • Marilyn Hallett
    October 20, 2014 at 7:36 am

    Dear sir/madam

    I would just like to find out, i have worked in my previous company for +- 5 years, i resigned in 2011 to relocate to another province. I started in 2006 but not sure of the month, when i resigned i served my entire 30 days notice and when i was paid that month it was just my salary and leave payout, not sure why i never received severance pay.

    I have started working in dec 2011 and resigned at the end of june 2011 which i worked in the company for 5 years. Am i entitled to get severance pay.

    Please advise

    • October 20, 2014 at 8:25 am

      Hi,

      Severance pay is only for retrenchment and not resignation.

  • Jacques Lowies
    October 20, 2014 at 12:30 pm

    Hi, I received a settlement amount of R170 000 after an arbitration case.

    How will I be taxed on this lump sum?

    • October 22, 2014 at 6:16 am

      Dear Jacques,

      If the payment from the arbitration is a severance benefit, then it is would be taxed as a severance benefit as per the earlier retirement tax tables.

  • Dee
    October 20, 2014 at 2:03 pm

    I have been working for my company for 4 years and 7 mnths. They have offered me a voluntary retrenchment ackage by asking me how much I am looking for and I responded R250 000. I am also owed leave pay . We get 21 days leave per year. How many days am I entitled to if I have taken 13 days’ leave over the period I have nothing in writing as yet. Should I ask them to put what my payout will be in writing? Do I need to go to the CCMA if they retract the offer that I asked for?

    • October 22, 2014 at 6:23 am

      Dear Dee,

      If you have get 21 days leave per year then you accrue 1.75 days leave per month worked less what you have already taken, that is what would be due to you after your final month.
      The least you should get for retrenchment is 1 week per fully completed year of service, and you should request information in writing.
      The CCMA can be used to resolve disagreements.

  • Marilynh
    October 22, 2014 at 6:41 am

    Dear YEI readers

    PLEASE NOTE: The comments section for this article is now closed.

    We thank the authors of this article, Netto Invest, for all of the valuable advice they have given YEI readers who have been going through retrenchment.

    We trust that all of the advice has been most beneficial.

    If you have landed on this page and are needing retrenchment advice, we encourage you to read through the many comments and responses to see if your need is addressed on this page.

    We further advise you to contact your HR Department for advice regarding early retirement and/or retrenchment matters. We recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.

    Kind regards
    Marilyn, YEI Editor

  • 2Kewl
    October 29, 2014 at 7:44 am

    Hello, my wife was retrenched yesterday and was told to leave immediately. There was mention of the first 30000 of her severance and leave pay being non taxed. Is this valid? Thanks. (by the way, its her first time being retrenched).

    • Marilynh
      October 29, 2014 at 8:14 am

      I regret to advise that the comments section has now been closed – please see notification below.

      Kind regards
      Marilyn, YEI Editor

  • November 10, 2014 at 8:02 pm

    Hotel closed down six years ago because of arther brown scandal we were retrenched and did not recieve uif cards do we lose that money

    • Marilynh
      November 11, 2014 at 6:00 am

      Unfortunately, I have to advise that the comments section has now been closed – please see notification below.

      Kind regards
      Marilyn, YEI Editor

  • Elmien
    November 14, 2014 at 6:31 pm

    im employed at a company empoyed as financial manager and hr for 1year and 3months now an went on maternity leave in aug 2014 but was at home for 1 week and my boss called me to come work again 3 times a week half day they did pay me but i havent got my leave. but in october he apointed hes sister in law in my position except i only do hr now but since nov she just takes over my work and dont ask me for anything and if i complain they just dont care. now they want to get rid of me and want to give me a package i also dont pay vat or uif and no one does and i want to know what i can do because i want to sue them. please help me asap because they want to see me on thuesday

  • brian
    November 17, 2014 at 6:28 pm

    need advice-i got retrenched 31 october 2013 and did not sign for my provident payout-will i qualify for the R550 000 tax free portion or will i still fall in the 2013 tax year where the tax free amount was R315 000
    Will appreciate any feed back

  • tebogo
    November 20, 2014 at 6:21 pm

    hi, are you entitled to severance pay if you are retrenched and later be rehired as an independent contractor by same employer

  • Mary Duiker
    February 18, 2015 at 9:14 am

    What happens if u never received any bonuses for the years that you worked at the company? Are u still entitled to it on retrenchment? It is stipulated in the contract.

  • Marilynh
    February 18, 2015 at 1:20 pm

    Dear YEI readers

    PLEASE NOTE: We regret to advise that the comments section for this article has closed. See comment below dated 22 October 2014.

    We thank the authors of this article, Netto Invest, for all of the valuable advice they have given YEI readers who have been going through retrenchment.

    We trust that all of the advice has been most beneficial.

    If you have landed on this page and are needing retrenchment advice, we encourage you to read through the many comments and responses to see if your need is addressed on this page.

    We further advise you to contact your HR Department for advice regarding early retirement and/or retrenchment matters. We recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.

    Kind regards
    Marilyn, YEI Editor

  • March 5, 2015 at 4:34 pm

    Hi there, I just want to get clarity on retirement, when you work for a comppany for 20 years, and the company never made provision for pension fund/provident fund for you and you got sick when you turn 20 years in the company at 50 years and get paid via your disability fund, question one, the disability payout will stop paying you, how will you get retire, do the company retire or retrench you at age 65 or how do it work, question two, besides claiming UIF will there be any monies paid out to you for the 20 years you work for them while the company never maid provision for your retirement and you were part of top management, can you please advice if there’s anything this person can do? Regards concern friend

  • ishmael mhangani
    June 3, 2015 at 7:18 am

    I have 4 year work,Company want to retrench me becouse Company have problem shading electrical and marketing,how much benefit I have

  • Khulekani Mhlongo
    July 25, 2015 at 4:10 am

    My company is offering voluntary severance packages at the moment, will there be a difference when the retrenchments become forced..? Is it wise to wait until such time or take what is on offer now since I may qualify for early retirement since I’m 53 yrs of age…

  • jack
    December 3, 2015 at 11:36 am

    Good day, i want to find out. im working as security as supervisor. i have received a notice of retrechment. and one of my collegue his site where his was working has ended he is coming to work on my site as supervisor. i want to know if is the right procedure were followed.

    • Marilynh
      December 5, 2015 at 9:59 am

      Dear Jack

      We regret to advise that the comments section for this article has closed. You’ve Earned It/YEI is not the author of this article, written in 2012, and therefore is not in a position to advise on finance or retrenchment matters. If you are in need of retrenchment advice, we advise you to contact your HR Department for advice regarding early retirement and/or retrenchment matters. We further recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.

      Kind regards
      Marilyn, YEI Editor

  • teba
    December 7, 2015 at 11:11 am

    Iv receive a notice of retrench on da 1st of november was earning R6 000pm. I worked for the company 2and half years. i got R4 000 for the package
    pls advice me, is dat possible

    • Marilynh
      December 10, 2015 at 1:52 pm

      Dear Teba

      We regret to advise that the comments section for this article has closed. You’ve Earned It/YEI is not the author of this article, written in 2012, and therefore is not in a position to advise on finance or retrenchment matters. If you are in need of retrenchment advice, we advise you to contact your HR Department for advice regarding early retirement and/or retrenchment matters. We further recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.

      Kind regards
      Marilyn, YEI Editor

  • sya
    December 10, 2015 at 2:23 pm

    My company is retrenching us at the end of Jan 2016. We ware informed about this on the 26th October 2015. Now my question is do i qualify notic pay?Because the company said we are going to the notic pay.

    • Marilynh
      December 11, 2015 at 6:22 am

      Dear Sya

      We regret to advise that the comments section for this article has closed. You’ve Earned It/YEI is not the author of this article, and therefore is not in a position to advise on finance or retrenchment matters. If you are in need of retrenchment advice, we advise you to contact your HR Department for advice regarding early retirement and/or retrenchment matters. We further recommend that you contact a labour lawyer should you feel the need for independent advice on labour matters.

      Kind regards
      Marilyn, YEI Editor

  • Bull
    January 26, 2016 at 2:43 pm

    I am being retrenched which my boss explained because I worked 13 years and my experience allow’s him to hire someone much cheaper….Which is life not my question- My question is I have a employment contract that states they have to pay me 3 months salary and 1 week for every year …Now they say its not the law they only entitled to pay me 1 month salary and I have to work that month in is this legal??

  • Ajay
    February 17, 2016 at 2:03 pm

    Hi, I was dismissed and the matter was referred to the CCMA. At the CCMA a settlement offer was agreed upon and the company agreed to overturn the dismissal and to declare it as a retrenchment (operational requirement), this was documented in the settlement letter and signed by all parties. The company filled out form IRP3 for request for a tax directive and they incorrectly indicated the settlement amount as a CCMA “Payout Amount” on the form, they did not indicate it as a retrenchment. the amount is below R500000. Sars sent through the directive and I was taxed almost 55% of the amount. I contacted the company and they refused to correct their mistake and they claim the tax has already been paid to Sars and there’s nothing they can do. How do I rectify the situation and claim the balance of my money back.

    • Marilynh
      February 17, 2016 at 2:13 pm

      Dear Ajay
      Thank you for your question. The comments section of this article has been closed. We recommend that you contact a labour lawyer in this regard.
      Good luck!
      Kind regards
      Marilyn, YEI Editor

      • Ajay
        February 17, 2016 at 7:10 pm

        Thank you for your prompt response Marilyn, I will definitely take this up legally.

  • Charlotte
    February 29, 2016 at 11:25 am

    Hi, if you let employee go with Mutual Termination, can they claim UIF?

  • Bull
    March 16, 2016 at 11:37 am

    I am being retrenched…

    Firstly my contract says the will give me 3 months notice.
    Secondly my manager just mentioned it by the way.

    Now I find its happening without any form of written notice and I am informed that the company is only obliged to pay me 4 weeks notice.

    Excluding any service pay i.e 1 week for every year I have been working?
    Is this right?

    Can I demand that they pay me for the next month as I had no written notice and is my contract not valid? It is one they supplied me?

    • Marilynh
      March 23, 2016 at 1:00 pm

      Thank you for your query, Bull.

      YEI is not in a position to advise on finance or retrenchment matters. The company’s HR manager should be able to assist you regarding retrenchment advice. We recommend you contact a labour lawyer should you feel the need for independent advice on labour issues.

      Kind regards
      Lyn
      You’ve Earned It

  • ashleighcupido@gmail
    March 30, 2016 at 9:56 am

    Good day im working now for the company for a year and 5 months, and I was retrenched only with a week salary and annual leave, and the company is still open I was the only one they retrenched. And I signed a contract till June 2017. What am I suppose to do regarding this matter.

    Kind Regrads
    Ashley Cupido

    • Marilynh
      March 31, 2016 at 10:10 am

      Thank you for your query, Ashley.
      I’m afraid that YEI is not in a position to advise on finance or retrenchment matters. The company’s HR manager should be able to assist you regarding retrenchment advice. We recommend you contact a labour lawyer should you feel the need for independent advice on labour issues.
      Kind regards
      Lyn
      You’ve Earned It

  • Rebecca
    May 10, 2016 at 4:30 pm

    Hi my name is Rebecca

    I resigned end of February and in March I was paid a weeks pay and I worked for this company for 4 years is this correct

    • Marilynh
      May 13, 2016 at 10:18 am

      Thank you for your query, Rebecca.
      I’m afraid that YEI is not in a position to advise on finance or retrenchment matters. The company’s HR manager should be able to assist you regarding retrenchment advice. Alternatively, we recommend you contact a labour lawyer should you feel the need for independent advice on labour issues.
      Kind regards
      Marilyn
      You’ve Earned It

  • Cam
    June 3, 2016 at 9:00 pm

    I have been on temporary disability for almost a year. If the company wants to retrench me because of health issues, can I apply for permanent disability after I am retrenched?

    • Marilynh
      June 4, 2016 at 6:32 am

      Thank you for your query, Cam.

      YEI is not in a position to advise on finance or retrenchment matters. The company’s HR manager should be able to assist you regarding retrenchment and permanent disability advice. We recommend you contact a labour lawyer should you feel the need for independent advice on labour issues.

      Kind regards
      Marilyn, YEI Editor

  • ulemu
    June 14, 2016 at 6:45 pm

    i am working for a company that pay on a monthly basis in one of the African countries. i have been informed of retrenchment to be paid in lieu of notice. My basic salary is 100,000 and the law says employees who have worked for 5 to 10 years 2 weeks salary for every complete year for first 5 years and 3 weeks salary for the years above up to 10 years. i have worked for 7 years 4 months now. How much am i entitled to as severance pay.

    • Marilynh
      July 10, 2016 at 3:35 pm

      Dear Ulemu

      Thank you for contacting YEI.

      I regret to advise that “You’ve Earned It” does not have the experience or knowledge to be able to assist you in your situation.

      What we do recommend is to contact your HR Department for advice regarding retrenchment matters or alternatively contact a labour lawyer should you feel the need for independent advice on labour matters.

      We wish you luck and hope that you can sort out your situation.

      You are welcome to read the comments at http://youve-earned-it.co.za/entrepreneurs/retrenchment-benefits-and-packages-in-south-africa-2/ to see if there is any beneficial advice that might pertain to your situation.

      Kind regards
      Marilyn

  • Vanessa
    June 22, 2016 at 10:59 am

    Good Day

    My husband has been working for this company for 5 years using their vehicle and diesel. He was told that starting now he needs to use his own car en petrol. Is this allowed after 5 years? should he not get an increase then?

    • Marilynh
      July 10, 2016 at 3:35 pm

      Dear Vanessa

      Thank you for contacting YEI.

      I regret to advise that “You’ve Earned It” does not have the experience or knowledge to be able to assist you in your situation.

      What we do recommend is to contact your HR Department for advice regarding retrenchment matters or alternatively contact a labour lawyer should you feel the need for independent advice on labour matters.

      We wish you luck and hope that you can sort out your situation.

      You are welcome to read the comments at http://youve-earned-it.co.za/entrepreneurs/retrenchment-benefits-and-packages-in-south-africa-2/ to see if there is any beneficial advice that might pertain to your situation.

      Kind regards
      Marilyn

  • Ryan
    July 4, 2016 at 9:05 am

    The company I have been working for is retrenching me after 13 years of service , the amount they have to pay me out is about R 90000.00 but they want to pay me off over 6 months is that aloud my concern is that if something should happen to the company or even to me what happens to my money can they do that or can I demand they pay me out in full
    regards Ryan

    • Marilynh
      July 10, 2016 at 3:14 pm

      Dear Ryan

      Thank you for contacting YEI.

      I regret to advise that “You’ve Earned It” does not have the experience or knowledge to be able to assist you in your situation.

      What we do recommend is to contact your HR Department for advice regarding retrenchment matters or alternatively contact a labour lawyer should you feel the need for independent advice on labour matters.

      We wish you luck and hope that you can sort out your situation.

      You are welcome to read the comments at http://youve-earned-it.co.za/entrepreneurs/retrenchment-benefits-and-packages-in-south-africa-2/ to see if there is any beneficial advice that might pertain to your situation.

      Kind regards
      Marilyn

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