Leave & BCEA
Retrenchment
Termination for operational (economic, structural, technological) reasons under Section 189 of the LRA.
Full definition
Retrenchment is dismissal for operational requirements under Section 189 (or 189A for large-scale) of the Labour Relations Act. Employers must consult affected employees or their representatives, follow fair selection criteria and pay severance under BCEA Section 41 plus outstanding notice and leave.
See also
Severance pay
One week's pay per completed year of service, payable to employees retrenched for operational reasons (BCEA Section 41).
Notice pay
BCEA notice period: 1 week (under 6 months), 2 weeks (6 months–1 year), or 4 weeks (1 year+).
Labour Relations Act (LRA)
The 1995 Act governing dismissals, unfair labour practices and the CCMA.
Automate Retrenchment in your payroll
Payroll Africa handles Retrenchment calculations automatically for South African employers — SARS-aligned for 2026/27. From R90/month.
Browse the full South African payroll glossary — 55 terms explained.