Severance Pay

In what circumstances can severance be payable or not payable to an employee?

 (a) Severance pay shall be paid to an employee if; -

  • Termination is by the Employer
  • The termination is based on retrenchment, incapacity, or incompatibility and the employer has no alternative employment opportunity to an employee
  • Termination is unfair either substantively or in terms of procedures and this proven by the Court

(b) Severance pay is not payable if; -

  • employee has resigned
  • Employee has retired
  • Fixed-term contract has come to an end
  • An employee has not completed the first year of employment
  • Termination was fair on grounds of misconduct
  • Employee upon being incapacitated, incompatible, or subject to retrenchment refuses to take up alternative employment with any other employer

Severance pay is payable at the rate of seven (7) days basic wage for each completed year of service to the maximum of ten (10) years with the same employer

Termination for Operational Requirements/Retrenchment