One week per year — but of what, exactly?

Under Section 41 of the BCEA, a retrenched employee is entitled to at least one week's remuneration for each completed year of continuous service.

The formula looks simple. The problem is the word remuneration.

Remuneration is not basic salary

This is the single most consequential thing to understand about South African severance.

Remuneration includes:

• Gross monthly basic salary
• Regular cash allowances — transport, housing, cellphone
• Employer contributions to medical aid and retirement

It excludes: reimbursements and once-off bonuses.

An employer who calculates on basic salary alone is underpaying. Sources describe this as the most common cause of CCMA referrals on severance, with employers then ordered to pay the shortfall plus interest.

Completed years only

Partial years round down. Six years and eleven months counts as six.

The 13-week average

For employees earning commission or regular overtime, the calculation uses a 13-week average rather than a single month's figure.

If you earn variable pay and your severance was based on one quiet month, that is worth questioning.

It is a floor, not a ceiling

Your employment contract, a collective agreement or company policy may set a higher amount. And a CCMA commissioner can order more if the retrenchment process was procedurally unfair.

The proposed change

The Labour Law Amendment Bill, 2025, published for public comment on 26 February 2026, proposes increasing the statutory minimum from one week to two weeks per completed year.

The Bill is awaiting formal introduction to Parliament. This change is not yet in force.

Refusing alternative employment

If your employer offers you reasonable alternative employment within the company and you refuse it without good reason, you may forfeit your right to severance under the BCEA.

Consider any offer carefully before declining.

Where to dispute

Section 41(6) gives a dedicated route where the only dispute is severance entitlement: refer it to a bargaining council if one covers you, or to the CCMA. Section 41(10) allows the Labour Court to determine the amount where it is already hearing the dismissal.