Unhappy with your severance package? What can you do if you think you’ve been done in by your employer and have not been paid what you deserve? Scorpion Legal Protection explains severance packages and how to dispute them.

Severance packages can only come about when the employer has started a section 189 retrenchment process in terms of the Labour Relations Act. This means they need to dismiss people based on operational requirements (economic, technological, structural or for similar needs of an employer), meaning it is not your fault. Before the employer can go through the retrenchment process, they need to hold consultations with all the affected employees, trade union representatives, workplace forums and employers’ organisations (if applicable). The consultations mainly involve discussions about how to avoid retrenchment, but they must also discuss the severance pay that the dismissed employees will be entitled to receive.

How do they calculate severance pay?

An employer must provide severance pay equal to at least one week’s remuneration for each completed year (12 months) of continuous service with that employer. This means, for example, that if you’ve worked at a company for 4 years with no interruption in your employment, your employer will owe you 4 weeks’ worth of severance pay. Employers are not allowed to give you less than this. The employer may also be bound by their own policies and procedures if they offer more than what is prescribed by the Basic Conditions of Employment Act.

It’s important to note that if the employer offered you an alternative position to avoid retrenching you and you refused it, you will not be entitled to receive severance pay.

I’m unhappy with my severance pay, now what?

You can go to the CCMA. You must do this within 30 calendar days of being retrenched. You will need to fill in a CCMA referral form, also known as the LRA 7.11 form, which can be downloaded on the CCMA website here.

We will explain step by step how to fill in form LRA 7.11 next week, so stay tuned.

What documents do I need?

As of 1 July 2021, the LRA 7.11 form must be accompanied by the Protection of Personal Information (POPIA) consent form. The CCMA will not process your referral unless you have given express consent for them to process your personal information. This form will be attached to the LRA 7.11 form mentioned above.

There are no set requirements for what documents you need to bring with, but it’s a good idea to bring:

• Your contract of employment if you have one
• Your letter of dismissal from the retrenchment process
• The minutes of the consultations to determine what was agreed regarding severance packages
• Any other documents that you can use to strengthen your case

If the referral is late, then you also need to submit a condonation application, which is a request for the CCMA to hear your case even though it was referred outside of the prescribed period of 30 calendar days. They will be able to help you with this at the CCMA.

How long does this process take?

There is no set timeframe, it all depends on the case load and backlog of the CCMA and Labour Court, as well as how complicated your case is. If you need to file the condonation application, for example, because you referred the matter too late then this adds an additional process to the timeline because the CCMA will need to hear this case first. If condonation is granted (or you never needed it), the case will go to conciliation.

On the date of conciliation, the matter may be resolved because you reach an agreement. If you can’t come to an agreement, the commissioner issues a certificate of non-resolution, and the matter can be referred for arbitration. This is a separate date. If the arbitration outcome is in your favour but the employer fails to comply with the arbitration award, you will need to go back to the CCMA for the enforcement process. If the employer decides to oppose the outcome of the arbitration, the matter could be referred to the Labour Court for a review application.

You may also be interested in:
Can I be forced to take an alcohol test?
If I’m fired, what must my employer pay me?
Fixed-term contracts and warnings

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 from 11:30- 13:30).

* This is only basic paralegal advice and cannot be relied on solely. The information is correct at the time of being sent to publishing.