Employers lose cases they should have won. Not because the reason was bad, but because the process was, and the CCMA judges both.
A valid reason with a defective process is still an unfair dismissal, and it still costs compensation. That is the single most useful thing a small employer can know about ending someone's employment.
Notice, and the household exception
Get this right first, because it is the most commonly misstated rule in South African employment.
For employees generally, BCEA section 37 requires:
- one week in the first six months
- two weeks from six months to a year
- four weeks after a year
For a domestic worker, there is no two-week band:
- one week if employed for six months or less
- four weeks if employed for more than six months
That comes from clause 24 of Sectoral Determination 7, and section 37(1)(c) of the BCEA names domestic and farm workers explicitly for the four-week step after six months. If you employ someone in your home and you have been assuming a two-week notice at the eight-month mark, you have been assuming wrong by a fortnight's pay.
Notice must be in writing (unless the employee cannot write), and it may not run concurrently with annual leave or sick leave. You may pay in lieu of notice rather than work it out.
Our notice periods guide goes through the variations.
Retrenchment is a process, not a decision
Retrenchment means dismissal for operational requirements: the job is no longer affordable or no longer needed. It is a no-fault dismissal, and it has a consultation process attached under section 189 of the Labour Relations Act.
The order matters. You consult before the decision is final, not after. That is what the process is for, and doing it in the wrong order is the defect the CCMA sees most often.
In substance you must:
- Give written notice that you are considering retrenchment, with the reasons
- Consult in good faith on ways to avoid it, reduce it, change the timing, or soften the effect
- Consider alternatives put to you, and give reasons if you reject them
- Apply fair and objective selection criteria where more than one person could go
- Confirm the outcome in writing
For a household, this feels heavy for what may be one person and a real financial squeeze. It is still the process. It does not have to be long or formal, but it does have to genuinely happen, and there has to be a record that it did.
Severance pay
On retrenchment, severance is at least one week's pay for each completed year of continuous service, under BCEA section 41.
A week's pay comes from the same section 35(4) route as everything else: monthly divided by 4.333. On R6,500 a month that is R1,500.12 a week, so four completed years is R6,000.48.
The entitlement falls away if they unreasonably refuse a suitable alternative position offered to them. Unreasonably, and suitable, are both doing work in that sentence.
Severance is only for retrenchment. It is not owed on resignation, on dismissal for misconduct, or at the end of a fixed term that simply ran out.
The final payment
Whatever the reason for leaving, the last payment includes:
- outstanding wages to the last day worked
- accrued but untaken annual leave, paid out
- notice pay, if you are paying in lieu rather than working it
- severance, if it is a retrenchment
The leave payout is the one that gets missed. Accrued leave is money they have already earned, and it is paid whether they resign, is dismissed or is retrenched. It is not forfeited by the manner of leaving.
And it is a payslip like any other. Show the lines, show the deductions, hand it over.
The paperwork they need from you
Two documents, and both are your obligation:
A certificate of service, compulsory under BCEA section 42, showing their name, your name and address, the job, the date started and ended, and their wage at the date of termination. It is not a reference and you are not required to say anything about performance. You cannot withhold it, including over money you believe they owe you.
The UI-19, recording the termination and the correct reason code. This is the one that decides whether their UIF claim goes through. A wrong or missing reason is the most common cause of a claim being refused, and the person it lands on has no income while it is sorted out.
It costs you nothing to get right at the time and is painful to fix afterwards. See UIF contributions for how the declarations work.
The paper trail is the defence
At the CCMA, the question is not whether you are a decent employer. It is what you can show.
The warnings, the consultation letter, the notice in writing, the payslips, the leave records, the certificate of service. An employer who has them usually resolves things quickly. An employer who has a good story and no documents is in a much worse position than the facts deserve, and that gap is entirely self-inflicted.
WageDesk keeps the employment record, the payslips and the leave history in one place with dates attached, so the trail exists before you need it. The time to build it is not the week you need it.
This article explains the law in general terms and is not legal advice. A dismissal or a retrenchment is exactly the situation where proper advice is worth what it costs, and this article is not a substitute for it.