Acts Online
GT Shield

Labour Relations Act, 1995 (Act No. 66 of 1995)

Chapter VIII : Unfair Dismissal and Unfair Labour Practice

196. Severance pay



(1) 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 remuneration for each completed year of continuous service with that employer, unless the employer has been exempted from the provisions of this subsection.


(2) The Minister, after consulting NEDLAC and the Public Service Co-ordinating Bargaining Council, may vary the amount of severance pay in terms of subsection (1) by notice in the Government Gazette.


(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 subsection (1).


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


(5) An employer or a category of employers may apply to the Minister for exemption from the provisions of subsection (1) as if the application is one in terms of the Basic Conditions of Employment Act and the Minister may grant an exemption as if it were an exemption granted in terms of that Act.


(6) If there is a dispute only about the entitlement to severance pay in terms of this section, the employee may refer the dispute in writing to—
(a) a council, if the parties to the dispute fall within the registered scope of that council; or
(b) the Commission, if no council has jurisdiction.


(7) The employee who refers the dispute to the council or the Commission must satisfy it that a copy of the referral has been served on all the other parties to the dispute.


(8) The council or the Commission must attempt to resolve the dispute through conciliation.


(9) If the dispute remains unresolved, the employee may refer it to arbitration.


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