Is Severance Pay Always There For The Taking?

As a general principle, an employer 'must pay an employee who is dismissed for reasons based on the employers operational requirements severance pay of at least one week's remuneration for each year of completed service'. The only exception to the general principle is found in section 41(4) of the Basic Conditions of Employment Act ("BCEA") in terms of which an employer is only absolved from paying severance pay 'if an employee unreasonably refuses to accept the employer's offer of alternative employment with that employer or any other employer'.

This bulletin addresses whether severance pay is still payable when an employer has assisted the employees in securing alternative employment with another employer. In other words, there was no unreasonable refusal on the part of the employees - they accepted the employment at a different employer.