HomeHome SearchSearch MenuMenu Our productsOur products

Do you know what to include in your notice letter of retrenchment? Find out here

by , 19 October 2015
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:

1.     The name as well as the designation of the employee you're retrenching.
2.     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.  
3.      The date on which the retrenchment will take effect.
4.     It must state if you require the employee to work through the notice period.

Warning!  Your company could be next! Don't make this retrenchment mistake. It could cost you over R1 million in compensation...

Discover how to avoid making the same horrific mistake Telkom, Sibanye Gold and Amplats made when retrenching their employees.
5.     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.
6.     Where applicable, lay out what will happen with pensions, provident funds and medical aids.
7.     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.
For more practical advice on retrenchments, subscribe to the loose leaf service advertised below.

Protect yourself from labour-related problems by using this practical tool

The comprehensive Labour Law for Managers Loose Leaf Service gives you all the details you need for maximum protection in labour-related problems. You will find, for example:
  • Information on the problem areas managers have to handle in the workplace daily, and appropriate solutions;
  • Valuable advice for employers, based on the ever-changing legislation;
  • Sample contracts, dismissals and warning letters, etc;
  • Numerous practical checklists; and
  • Much more…

Related articles

Related articles

Related Products

Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>