Proposed labour law changes could double retrenchment pay

The new Labour Laws (Employment Laws) Amendment Bill proposes a doubling of severance pay, as well as increased powers for the Commission for Conciliation, Mediation and Arbitration (CCMA) to simplify procedures and reduce backlogs.

- Alida de Beer

The bill, which the Department of Employment and Labour (DEL) published on 26 February, is open to public comment by no later than 28 March.

One of the main proposals, that severance pay for retrenched employees be doubled from one week's pay per year worked to two weeks per year worked, can have an impact on employment in the long run, according to George-based labour law attorney Dawie Bezuidenhout. He said it could cause employers to become more cautious when considering the cost of retrenchment versus keeping the employee, albeit in a different employment position. Employers could also be more cautious when appointing a new employee. "Employees' job security would be more certain, however, getting employed will become much more difficult, because the employer will know they are stuck with this employee for the long run."