During our last live Q&A session on Facebook, Scorpion Legal Protection was asked “If I resign, what must my employer pay me?” There are certain payouts you can expect when you resign, but what you can claim depends on how you left your employer, Scorpion advises.
When it comes to the terms of your employment – and ending it – you must look to your employment contract first. In cases where there is no employment contract, your rights are still protected by the Basic Conditions of Employment Act (BCEA). You could be entitled to:
- Payment in lieu (instead) of serving your notice period. This is where the employer wants you to leave immediately and does not want you to work the notice period. This means that instead of working your notice period, the employer pays you not to.
- Termination pay. This means that not only must basic salary be included but also any other payments that the employer was making to the employee on a regular basis for the work that the employee did (this differs on a case-by-case basis).
Annual leave payout
Resigning means that the choice to leave employment was yours. According to the BCEA, an employer must pay out “for any period of annual leave due in terms of section 20(2) that the employee has not taken.” There has been some debate in court about what happens if you have large amounts of leave saved up. In Jooste v Kohler Packaging Ltd [2003] 12 BLLR 1251 (LC), the employee had 141 days leave owed to him when he resigned. The employer only paid him for 50 days, because in terms of the employer’s annual leave policy, employees are only permitted to accumulate 50 days leave. The court agreed with this, because it said that employers and employees have a responsibility to ensure that employees take their leave. It is a good idea to check your employer’s policies before you resign to make sure you don’t lose out.
Pension/provident fund payout
If your employer was contributing to a pension/provident fund for you, you can withdraw your entire pension/provident in a lump sum (once-off amount) – although you should carefully consider whether this is the best choice for you, as the pension/provident fund money will be heavily taxed when you withdraw it before retirement age. Another option is to transfer your money to another pension/provident fund (if the one you had with your employer is specific only to that employer). If you transfer the funds, they are not taxed like they would be if you withdraw the money. If you are a government employee and a member of the GEPF, then things may work slightly differently. For example, as a member of the GEPF, if you retire with less than 10 years of service, you may get a once-off lump sum. If you retire with more than 10 years of service you may get a once-off lump sum and a monthly pension.
You cannot claim any UIF benefits if you resign. UIF can only be claimed if the employee is dismissed, retrenched, if their contract expires or due to incapacity to work like long-term illness or maternity leave.
You may also be interested in:
Can I resign with immediate effect?
Can you take back your resignation?
Employer refuses to pay out leave
If you have a query, follow Scorpion Legal Protection on Facebook and ask your question during our next Live Q&A (every first Thursday of the month).
* This is only basic advice and cannot be relied on solely. The information is correct at the time of being sent to publishing. This is not financial advice.