Retrenchment Notice Letter South Africa

Notice of Retrenchment

Summary If you run a business and employ staff, then a Notice of Retrenchment template may be used to notify an employee that their position has been made redundant, and that they have been retrenched.

Note: do you need a Retrenchment Policy? You can get one here.

What does the notice say? The sample Notice of Retrenchment form allows for the employer to record the retrenchment of an employee, and notify the employee of the details surrounding the retrenchment.

Note: before retrenching staff, you must have engaged in consultations with the affected employees. A Notice of Possible Retrenchment may be used to start this process.

What does the sample notice look like? The template Notice of Retrenchment form can be printed onto one page.

What do you need to do to use the Retrenchment Form?

• Check the sample notification form and make any changes that you require.
• Use the form to notify an employee of their retrenchment.
• Note: Make sure that you have engaged in meaningful consultation with the effected employees before retrenching them.

Also viewed: Employee Retrenchment Process Pack

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The Use of a Retrenchment Notice:

A retrenchment notice letter is a formal document used by employers to inform employees that their jobs are at risk of termination/ being retrenched due to operational requirements, which may include a need to limit losses or increase profits. The letter is governed by various laws and regulations, such as the Labour Relations Act and the Employment Act, and outlines the employer’s proposed method for retrenchment which is requirements based and the relevant information that employees need to know by way of written notice.

The letter must follow a fair procedure, including a joint consensus-seeking process to which the employed parties are entitled with any registered trade unions, workplace forums to which the employed individual belongs, or other consulting party or services. The consultation process must include appropriate measures to reach consensus, such as disclosing alternatives to possible retrenchment, how annual leave that is remaining will be dealt with and any other following payments, notice pay, operational requirements, any compensation claim for each completed year with the company or business and considering the possibility of future re-employment with the employer.

An employee can also engage in voluntary retrenchment once notified of the possible retrenchment by an employer by way of a retrenchment letter.

The retrenchment letter must be in writing and sets out required need-to-know information when an employer wants to retrench employees such as to provide notice period, which is the minimum amount of time that employees must receive before they are retrenched. The notice period is based on the employees’ completed years of service with the employer and may also include outstanding leave within the retrenchment letter.

Affected employees must receive a retrenchment package, which may include severance pay to the employee, notice pay, and any other benefits due or other payments to the employee to which they may be entitled. Select employees may also receive additional payments based on selection criteria agreed upon in a collective agreement or by the employer after the employer reviews an employee’s record with the business.

The retrenchment letter must also include information about the proposed retrenchment, such as the number of employees to be retrenched, notice pay, the date on which the retrenchment will take effect, any payments from the employer to the employee by way of collective agreement and any future re-employment possibilities for the retrenched employee with the employer. It must also outline the proposed retrenchment process for the employee, which may involve a workplace forum, a bargaining council, registered trade union or the Labour Court as per the Labour Relations Act.

The retrenchment notice letter must be respectful and considerate of the employee rights and feelings. The employer must comply with basic conditions of employment and relevant laws and regulations applicable to the employer, and must ensure that the retrenchment process is fair and transparent.

In summary, a retrenchment notice letter is a critical document that informs employees of their possible retrenchment by the employer and outlines the proposed method for retrenchment. The letter must follow a fair procedure and offer affected employees a retrenchment packet to be paid by the employer. The letter must also be respectful and considerate of the employees’ rights and feelings, and comply with basic conditions of employment and relevant laws and regulations that have bearing on the employer.