Severance pay is a statutory form of compensation granted to employees who are retrenched due to operational requirements. It is not a reward, but a safeguard meant to ease the financial impact of job loss through no fault of the employee. Governed by the Basic Conditions of Employment Act (BCEA), severance pay can become a source of dispute, often relating to eligibility or the amount owed. This infographic explains what severance pay is, when it applies, common points of conflict, and how disputes can be resolved through negotiation, the CCMA, or ultimately, the Labour Court.
By Qudin Alexander
Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)