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Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997)

Sectoral Determinations

Sectoral Determination 9 : Wholesale and Retail Sector, South Africa

Part G : Termination of employment

29. Severance pay


(1) For the purposes of this clause, “operational requirements” means requirements based on the economic, technological, structural or similar needs of an employer.


(2) An employer must pay an employee who is dismissed for reasons based on the employer's operational requirements severance pay equal to at least one week’s wage for each completed year of continuous service with that employer.


(3) An employee who unreasonably refuses to accept the employer's offer of alternative employment with that employer or any other employer, is not entitled to severance pay in terms of sub-clause (2).


(4) The payment of severance pay in compliance with this clause does not affect an employee's right to any other amount payable according to law.


(5) If there is a  dispute only about the entitlement to severance pay in terms of this clause, the employee may refer the dispute in writing to the CCMA.


(6) An employee who refers a dispute to the CCMA as provided in sub- clause (5) must satisfy the body that a copy of the referral has been served on all other parties to the dispute.


(7) The CCMA must attempt to resolve the dispute through conciliation.


(8) If the dispute remains unresolved the employee may refer the dispute to arbitration.


(9) If the Labour Court is adjudicating a dispute about a dismissal on the employer's operational requirements, the Court may enquire into and determine the amount of any severance pay to which a dismissed employee may be entitled and the Court may make an order directing the employer to pay such amount.