Employers are not legally required to pay their dismissed employees a severance package if they can find reasonable alternative employment for the dismissed employees.
Employees are not entitled to severance pay when they are relieved of their duties if they unreasonably reject alternative employment.of entering a recession, which could lead to widescale retrenchments across the nation.
According to Werkmans Attorneys, section 41 of the Basic Conditions of Employment Act states that an employer can refuse to pay their dismissed employees if they unreasonably refuse to “accept the employer’s offer of alternative employment with that employer or any other employer”.The court reaffirmed that the requirements of section 41 are satisfied if the dismissed employee is offered alternative employment with a new employer due to the retrenching employer’s actions, said Werkmans Attorneys.
However, a dismissed employee who is offered alternative employment but the offer is not made via their retrenching employer is still entitled to severance pay – even if they refuse the alternative employment opportunity. Servest took the matter to the LC, which found that the arbitrator made an error of law, leading to a disregard of material evidence.
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