Precious* was retrenched, and says her employer owes her backpay as well as provident fund money. She’s worried because the provident fund says she was never registered, but her employer has been deducting money from her salary every month for provident fund contributions. She’s scared they will just vanish with her money and never pay her out. Scorpion Legal Protection discusses what the law says about this and what’s due to retrenched employees according to the law.
Scorpion Legal Protection’s advice
The first issue we should address is what is actually due to a retrenched employee according to the law. SA’s labour laws state that severance pay should be at least one week’s remuneration for each completed year that you’ve been employed with that specific employer. Any outstanding leave you have must be paid out in full, as well as notice pay. Notice pay may vary depending on your employment contract, but where your contract doesn’t discuss this specifically, you are entitled to notice pay as follows:
- If you have been employed for 1-4 weeks: 1 weeks’ notice pay
- If you have been employed for 4 weeks - 1 year: 2 weeks’ notice pay
- If you have been employed for more than a year: 4 weeks’ notice pay
If it states in your employment contract that you will be paid a bonus, then you may be entitled to a pro-rata (partial) payout of this bonus. The same goes for any pension or provident fund benefits you were getting. Since you are now retrenched, you can also claim UIF from the government.
Regarding the provident fund, if Precious can provide all her payslips and prove that her employer was deducting money from her and then lying about paying it over to a provident fund, she can go to the specific pension fund’s administrator and ask for a benefit statement. If what Precious is saying is true, then this statement will prove that the employer was not paying. She can then complete the Pension Fund Adjudicator (PFA) complaint form, attaching her payslips and the benefit statement to it, and submit it to the PFA. The adjudicator will have to investigate the complaint and then advise Precious of the outcome.
The issue of the backpay – there is no indication why Precious feels she is entitled to backpay, but the general rule is that an employee may be entitled to backpay if it is ordered/ruled by the CCMA or the Labour Court.
Tips:
- Check your employment contract for details about what is owed to you when you’re retrenched before you do anything else.
- Your retrenchment pay, by law, depends on how long you’ve been working for a specific employer, or whatever is stated in your employment contract.
If you have a query, follow us on our Facebook page 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. Names have been changed to protect identity.