South Africa Publishes Specific Rules on When and How Employers Must Pay Severance to Workers
- South African law sets out clear conditions under which dismissed employees are entitled to severance pay from their employers
- The amount an employee can receive depends on how many completed years of continuous service they have with the employer
- Employees who turn down a reasonable offer of alternative work risk losing their right to severance pay entirely
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South Africa's Labour Relations Act sets specific rules on when and how employers must pay severance to workers let go due to operational requirements.
It covers situations driven by economic, technological, structural, or similar business needs.
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How severance pay is calculated
Under the law, an employer must pay a dismissed employee at least one week's remuneration for every completed year of continuous service.
The calculation follows the method outlined in section 35 of the relevant legislation. This means a worker with ten years of service would be entitled to a minimum of ten weeks' pay, based on their current remuneration.
The Minister of Labour holds the power to adjust this minimum amount by publishing a notice in the Government Gazette. However, any such change can only happen after consulting both NEDLAC and the Public Service Co-ordinating Bargaining Council, which was established under Schedule 1 of the Labour Relations Act of 1995.
When an employee can lose severance pay
The law also outlines circumstances in which a worker may forfeit their entitlement. If an employer offers alternative employment, either within the same organisation or with another employer, and the employee unreasonably refuses that offer, the worker loses the right to receive severance pay.
The word "unreasonably" is significant here. It means that not every refusal will disqualify a worker. Whether a refusal is considered reasonable depends on the specific facts of each case, including the nature of the alternative role and how it compares to the employee's previous position.
Importantly, receiving severance pay under these rules does not cancel out any other amounts the employee may be owed by law. Other entitlements, such as outstanding leave pay or notice pay, remain separate and must still be honoured by the employer.
Rest time for workers in South Africa
Legit.ng earlier reported that South Africa's labour law sets out clear rules on how much rest time employers must give workers between shifts and over the course of a week, with some flexibility allowed through written agreements under specific conditions.
Source: Legit.ng
