What every South African needs to know about retrenchment

Retrenchment is a real threat in the current economic environment. If you're not already one of the thousands facing this reality, now is the time to make sure you know your rights and what to do to be prepared for such an event. That way no one can pull the carpet out from under you. Here are the facts every South African needs to know...

It's estimated that 25,000 people have lost their jobs and 16% of firms are retrenching. So be prepared- here's what you need to know:

1.  Your company can't retrench you on a whim
They have to provide a clear case and the justifications must be based on "operational requirements", meaning, for economic, technical or structural reasons.

A company has to engage in consultations with all employees that could be affected. Your employer should discuss options with the purpose of avaoiding retrenchment or to retrench as few staff members as possible. This consultation is a procedure and you, as the employee facing retrenchment, are entitled to the minutes of it. The disclosing of retrenchment information has to be done in writing and the employer must give consulting parties an opportunity to give feedback presentations.

2. Labour law requires a minimum severence pay of one week per year of service

The typical retrenchment package consists of your notice salary (1 to 3 months depending on your contract), leave pay (leave due but not taken) and the severence payment. But if you're offered alternative employment on similar terms and conditions, the company doesn't have to pay a severence.

3 tips to cope with retrenchment

1. One of the biggest downfallls of retrenchment is loss of medical aid
You should never allow this to lapse, so ask your existing fund for a basic cover, or at least a hospital plan, until you can upgrade.

2. You're going to have to curb your spending until you have some form of fixed income, no matter how big your pay-off was
Try not to borrow money, as frugality is key to keeping your head above water. If you have lots of bills to pay, consider phoning up your creditors to explain your situatiion.

3. If you feel secure where you are, don't be caught unprepared
Keep your CV  up-to-date and your savings plan on schedule. Network as much as possible and keep a well documented portfolio of your achievements. Adopt the attitude that you're being prepared for greater things and always go the extra mile so as to stand out from the crowd when retrenchments are in the pipeline.

If you're one of the recently retrenched, you're probably experiencing self-doubt, a sense of failure or depression. I urge you to maintain a positive attitude. You'll find another job and it may be even better than your previous one! In the meantime, focus on the experience you've gained and highlight your skills to potential employers.