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Two things you need to know about termination pay

by , 09 May 2016
Termination pay, in other words payment that is legally due to your employee when she leaves you, can be a tricky area to deal with. And understandably so! It can be a complicated area to deal with, which is enough to give any employer a headache.

But it really doesn't have to be that way!

In order to help you avoid unnecessary headaches when dealing with termination pay, here are the two most important things you need to know about it.

Make sure you understand them...


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1. Knowing when to pay termination pay

You must pay termination pay in the following eight instances:

1.       She resigns, retires or passes away;

2.       she deserts, or absconds, you;

3.       you dismiss her for misconduct;

4.       she leaves by agreement with you;

5.       you dismiss her for because of disability or illness;

6.       you dismiss her for poor performance;

7.       you dismiss her for incompatibility; or

8.       you retrench her.

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.
2. Additional payments along with termination pay

In addition to the termination pay she'll be entitled to, you must also give her:

·         Salary, wages, overtime pay or commission that is due to her for any work done;

·         payment for her pension or provident fund; and

·         payment for any money that she 'saved up' with you. For example, you might have a savings scheme in place for employees to set money aside. So, if she has savings in the scheme she'll be entitled to it on termination. What's more, if the terms of the scheme include interest, then she'll also be entitled to that interest.

*Those were two vitally important things you have to know when it comes to termination pay.

IMPORTANT NOTE: Before you calculate termination pay, you need to know what to include and exclude within the term remuneration. This is very important for both your sake and your employee's sake!

To find out what they are, simply page over to Chapter T 03: Termination Pay in your Labour Law for Managers handbook.

Don't already have a copy? No problem! We've got you covered.

Simply click here to order your copy today.

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