Retrenchment in South Africa is governed by Sections 189 and 189A of the Labour Relations Act 66 of 1995, and it is a process rather than a decision handed down.
The consultation
During the Section 189 consultation period, you can:
- Propose alternatives to retrenchment
- Negotiate better severance terms
This is the best moment to push for a higher package. Once the process closes, your leverage drops considerably.
Section 189A
For large-scale retrenchments, Section 189A applies and disputes can be referred to the Labour Court rather than the CCMA.
Disguised dismissals
If your employer is disguising a dismissal as a retrenchment — retrenching your position but hiring someone else to do the same job — that is an automatically unfair dismissal.
Refer it to the CCMA immediately.
Accepting a package does not always waive your rights
Accepting a severance package does not necessarily waive your right to challenge the fairness of the retrenchment — unless you sign a settlement agreement that specifically waives those rights.
Read any document carefully before signing. The distinction between accepting payment and signing a waiver matters.
Two different deadlines
This catches people out:
- Unfair dismissal dispute: 30 days from the date of dismissal to refer to the CCMA
- Severance amount dispute: a dedicated route under Section 41(6), with more time available
So even if you missed the 30-day window to challenge the fairness of the process, you may still be able to pursue a severance shortfall.
What you should receive within seven days
Your employer must provide, within seven days of your termination date or on the next scheduled pay date:
- A certificate of service — you need it for UIF
- Your IRP5 tax certificate
- All final payments
The CCMA is free
The process costs nothing and you do not need legal representation.