How retrenchment benefits are worked out

How are retrenchment benefits calculated?

Start with your written contract, because many employers offer more than the statutory minimum. The Employment Act amendments in force since 2023 cover all employees regardless of wage.¹

Length of service is central, whether the figure comes from your contract, a company scheme or the statutory minimum. Compare any figure with what your own contract states before you accept it.

What should you check before accepting a figure?

Ask for a written breakdown showing your start date and the length of service used. Compare it with your contract and any staff handbook that covers retrenchment benefits.

If the figure is lower than your documents suggest, raise the gap in writing before you sign. If a dispute grows into a wider claim, the employer must still prove just cause for any dismissal involved.²

When will the payment arrive?

Ask when the payment will be made, because timing matters when you are planning your finances. Some employers pay at once and others spread it over a short period, so get the date in writing.

If a payment date passes with no funds, follow up in writing at once. A clear paper trail of each request and reply helps if a dispute arises.

What should you do next?

Gather your contract, staff handbook and any written offer. Read about what to weigh if you are offered a voluntary separation scheme, since the two are often confused.

If you were retrenched involuntarily, also check income support through the Employment Insurance System. If you want a lawyer to act, an employment lawyer can check the offer against your contract and pursue any shortfall.