When an employee is retrenched, it is often referred to as “service pay”. In legal terms, the payment for years of service is referred to as “severance package”. In terms of the MIBCO Main Collective Agreement, an employee is entitled to severance pay that is calculated as follows:
Please note that the average commission calculated over the previous 13 weeks prior termination must be taken in consideration in regards to motor vehicle- and supply sales people. Over and above the severance pay, the employee is also entitled to the following payments and documents:
Being a MISA member, also entitles the employee to a retrenchment benefit, a once-off payment subject to certain criteria.
In a Nutshell, when an employee is retrenched, he/she is entitled to a retrenchment package that consists of payment for years of service as well as all statutory payments.
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