If the worker accepts a separation package, the parties may agree that the amount of the payment will be calculated in the same way as the compensation of an austerity plan within the meaning of Section 41 of the Basic Law on Conditions of Employment (BCEA). This means that the calculation can be based on the number of years of service the employee in the company. This does not mean that the worker was removed under Section 189 of the Labour Relations Act (LRA). In this section, the employer is required to consult with the affected workers or their representatives when the employer has business requirements that may require downsizing and redundancy. Section 189 allows the employer to dismiss workers if there is a sufficient basis and if the consultation process has been duly conducted. In section 189, the employer is not required to obtain the agreement of workers or workers` representatives to proceed with the reduction. Instead, it must only comply with the provisions of the LRA. On the other hand, a consensual separation is by definition an agreement. A section 189 discount is supplemented by a letter from the employer informing workers of the termination of the employment relationship. However, a termination by mutual agreement is concluded by a legal agreement. Employers are cautioned that they should not confuse these two types of redundancies. The LRA does not consider the termination of a termination by an authentic and legally binding contract.
A section 189 reduction is a kind of dismissal and may, in some cases, be considered unfair dismissal. In a case recently decided by the Labour Court of Appeal [ABSA Investment Management Services (Pty) Ltd/Crowhurst 2006[2 BLLR 107], Crowhurst`s employment had been terminated. She went to the labour court and asked for unfair cuts. Absa lost the case and claimed on appeal that the employee`s employment had been terminated by mutual agreement. Crowhurst stated that she had been encouraged to believe that her position had become redundant and that it should be withdrawn because there were no other positions for her. However, according to Crowhurst, she discovered that there were several vacancies that matched her qualifications. The employer`s version was that Crowhurst had been offered two alternatives to the discount. Faced with these two conflicting versions, the court had to take a close look at the document that had implemented crowhurst`s termination of employment. She explained that her employment had ended as a result of the dismissal of her position. The letter did not refer to a mutually agreed termination, nor to alternative measures to the reductions that would have been offered to it, according to the employer. The court found that Crowhurst had indeed been withdrawn and that the dismissal had been unfair.
The employer was therefore required to pay Crowhurst six months` compensation and also to bear his legal costs. Employers are cautioned that the agreement identifies both parties and states on the date of employment and termination. There may be a particular reason for departure – dismissal, resignation, resignation – or simply indicate that the employee is leaving the company. When employers decide to terminate a job, they want the employee to release the company from any mandatory rights. To do this, most companies use a separation of jobs agreement. It is a way of saying that both parties have reached a friendly end to the working relationship. There are a number of important legal and economic issues that should be taken into account when negotiating an employment agreement. If you are over 40 years old and the company offers you a compensation package, the company must give you at least 21 days to review it and 7 days to revoke the package.