Do you know what to include in your notice letter of retrenchment? Find out here
You DON'T have to reach an agreement during consultation in order to retrench. But you must ensure you consulted properly and used up all possible alternatives.
If you do happen to reach an agreement, then put all the details in a written agreement, signed by yourself and the union (in the case you were consulting with a union).
But if you don't reach, you can still go ahead with the retrenchments by giving notice to all the employees who you've selected.
Under Section 37 (4)(a) of the Basic Conditions of Employment Act (BCEA), this notice letter must be in writing and should cover the following seven points:
The name as well as the designation of the employee you're retrenching.
Confirmation that you're giving out this notice after the process of consultation.
You'll need to specify who you consulted with and when the consultation took place. Remember to give the proper amount of notice. Check how much you should give in the employment contracts. Or you can refer to the BCEA or to the bargaining council agreement if you have one. But keep in mind that the contract's notice period takes preference.
The date on which the retrenchment will take effect.
It must state if you require the employee to work through the notice period.
It must state the package you'll pay. This can include notice pay, leave pay, severance pay, pro rate bonuses and any other applicable payments. It is recommended that you be very clear as to the amount you'll be paying out in order to avoid any disputes at a later stage.
Where applicable, lay out what will happen with pensions, provident funds and medical aids.
Lay out the details of any aid that you'll be providing to the employees you'll be retrenching.
So, there you have it. Now remember to include these seven points in your notice of retrenchment.
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