RETRENCHMENT - What is an Employee paid when they are Retrenched? | South Africa
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- เผยแพร่เมื่อ 6 ก.ค. 2024
- In this video I break down exactly what an employee is owed in terms of money when they are retrenched. I start by providing some context information about a retrenchment and then move on to detail what an employee is paid on termination of employment (resignation, dismissal or any other type of termination of employment), what an employee is paid if they are dismissed and then finally what an employee is paid if they are retrenched. An employee who is retrenched is entitled to the termination of employment payment, the dismissal payment and the retrenchment payment.
Additional information in this video: I explain how to calculate outstanding salary/wages for an incomplete period of time, how to calculate annual leave owed, how notice of termination works for a retrenchment and I debunk the myth that employees are automatically entitled to 3 months pay. Further to the aforementioned I discuss severance pay, how it is / isn't taxed and when an employee is not entitled to any severance pay as per the Basic Conditions of Employment Act.
NOTE: In this video I give the legislative minimums - the parties can always negotiate more favorable payment.
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Credentials:
Employment Relations practitioner for over 6 years, assisted over 500 clients in various industries across South Africa, over 2000 disciplinary hearings chaired, numerous CCMA cases, retrenchments, restructuring, contracts of employment, incapacity investigations, grievances facilitated, and negotiations.
I am also the Director of Fourie Employment Relations (Pty) Ltd and, lectured and mentored the subject of labour relations at the University of Stellenbosch.
MCom Cum Laude (Industrial Psychology)
Thesis: The behaviours that make small business owners successful and what success means to them (the development of a small business owner competency model)
BCom Hons Cum Laude (Industrial Psychology)
BCom Management Science (Entrepreneurship & Industrial Psychology)
Numerous courses completed on Nonviolent Communication
Disclaimer: This video is for educational purposes only.
Timecodes:
0:00 - Introduction
0:45 - Disclaimers
1:21 - Are employees entitled to 3 months pay?
1:56 - Important background information on termination of employment
5:14 - What is an employee paid if the employment relationship is terminated?
6:12 - How to calculate daily pay for employees paid monthly?
7:53 - Annual leave not taken
9:11 - How to calculate annual leave due?
10:02 - Payment owed for paid time off for overtime or Sunday work not taken
10:44 - Payment when an employee is dismissed
11:02 - Notice of termination when retrenched
15:45 - Severance pay
17:51 - When is an employee not entitled to severance pay
19:10 - Summary
Thank you Carmen, your videos are very informative and helpful.
I'm so glad!
very informative and insightful !!
thank you Carmen,
this is exactly what I needed to find out!
#OnPoint
I still have a few more grey areas regarding the retrenchment process,
but im sure ill get all of them after going through the rest of your videos...
thanks Carmen
I am glad this was helpful. If my other videos do not provide clarity, please comment the grey areas that I can address them in future content.
Thank you Carmen
Thank you Carmen, very informative. Just need to ask if this information applies to both contract & permanent employees?
If by contract employees you mean fixed term contract employees - yes.
or
If by contract employees you mean independent contractors then - no.
or
If by contract employees you mean employees who are employed by a labour broker then the labour broker is the employer and it depends if the employees are being retrenched from their employment or just being moved from a particular client.
@@carmenfourie5346 thank you. I meant fixed term contracts. My contract expires in March but during retrenchments they’re terminating it end of Nov. As per my contract I’m supposed to be given 2 month notice but we’re only serving one month. I’m just so confused
Afternoon, my name is gogol Ngwanza working for tyris, I have been working for tyris for two years since 2021 until now, the site that we working is shutting off based the client didn't pay our company. Now I have wad in meeting with the company today they have told me that they have to retrench me and told me that they will pay me 1 month for notice period+ 2 weeks of severance pay+ 21 days of holidays, do you hbink it is fair for me ?
Excellent informative information Carmen. Clearly explained.
If possible can you please share with us an example of how calculations are made on a spreadsheet or some sort of how one week retrenchment package is calculated for years worked at a particular company.
And can you please advise what should employees do if they wakeup tomorrow finding company been closed which was never notified before by the employer and later on through legal processes retrenchment was agreed between the employer and employees. Is that fair or unfair retrenchment process? if unfair, what are employees entitled to or should do?
I am grateful for your feedback.
I will work on doing a video using a specific example and a spreadsheet to show the calculations.
My recommendation for employees who wake up and the company has been closed with no process being followed would be to refer the matter to the CCMA within 30 days of being notified it is closed and they are no longer employed. That being said if an agreement was reached later, the parties will need to abide by the agreement and I cannot comment on the fairness without knowing further details.
Please advise what is a notice pay? Is the notice pay equal to the last month you worked ? Or an extra pay on its own, because I’ve worked for 1year and 7 month total, will I get an extra month payment beside my last month I’ve worked ?
Notice pay is when an Employer decided that an Employee is not required to work out their notice of termination period (either as per the contract or the BCEA - whichever is applicable) and pays the amount for that period. See my other videos on notice of termination for more information.
Hi what happen if my imployer died and leave beneficiary Estate money for imployee and the imployee continue work for the kids in same address,if the kids decide not to need the helper.Do the imployee still need to claim money for long service?
Hard for me to answer without looking into the specifics of what happened, but generally speaking this seems like a transfer of employment and years of service (in absence of an agreement) transfer from the old employer to the new employer and therefore if the employee is retrenched from the new employer all the years of service need to be counted for severance. If there is a dispute about severance owed I suggest referring the matter to the CCMA within 30 days.
If your contract with a company is that you must work till the age 65 years of age before you can go on pension and the company start with their retrenchment process when you are at a age of 60 years old. Must the company pay you 1 week's salary (at least) for every year of service you complete till the age of 60 that you are now, or as if you are 65 years of age, (retirement age) as if you would have to go off on pension at the age of 65 years of age. That means that they have to pay you that extra 5 years of service between 60 and 65 years of age because they are braking their contract with you.
A retrenchment is different from a retirement and therefore if the clause is a normal retirement clause, they would not be required to pay any additional payment other than severance owed as part of the retrenchment. But there could be some exception if you say the contract says "you must work till age 65". Usually contracts are not worded in this way and usually they include a clause to say the contract may be terminated sooner due to operational requirements (retrenchment). Without seeing the contract I cannot give a more definitive answer.
Thank you so much
You're most welcome
My wife severance agreement said 6 weeks for every years completed service totalling to 30 weeks for the 5 years she worked there. She only got paid six weeks. Employee claims she got what the agreement said.
I would recommend sending them the wording of the written agreement to show that it states 6 weeks for each year rather than 6 weeks in total.
@@carmenfourie5346 CCMA ruled in our favor when the company didn't pitch for arbitration which they appealed and later ruled in their favor saying it was a mistake. Their Evidence was minutes only the company had a copy of(altered)they discarded the agreement which 4 people had copies of and were individually signed. Crazy.