The Severance Letter is a critical document in South African employment law, typically used when employment is terminated due to operational requirements (retrenchment) or other justified business reasons. It must comply with the Basic Conditions of Employment Act 75 of 1997 and the Labour Relations Act 66 of 1995, which mandate minimum severance pay of one week's remuneration per completed year of service. The letter serves as a formal record of the termination arrangement, detailing the severance package, final payments, benefit treatments, and any post-employment obligations. It protects both employer and employee interests by clearly documenting the terms of separation and ensuring legal compliance with South African labor regulations.
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1. Letterhead and Date: Company letterhead, date, and reference number if applicable
2. Recipient Details: Employee's full name, employee ID, position, and address
3. Subject Line: Clear indication that this is a severance letter
4. Confirmation of Termination: Statement confirming termination decision, effective date, and reason (e.g., retrenchment, operational requirements)
5. Severance Package Details: Breakdown of severance pay calculation and other termination benefits
6. Final Salary and Leave Pay: Details of final salary payment and accumulated leave pay
7. Company Property: Instructions regarding return of company property
8. Tax Treatment: Information about tax implications of the severance payment
9. Legal Compliance Statement: Confirmation of compliance with relevant labor laws
10. Signature Block: Space for authorized signatory and employee acknowledgment
1. Long-term Incentives: Treatment of outstanding share options or long-term incentives, if applicable
2. Medical Aid Continuation: Details about post-employment medical aid benefits if offered
3. Restraint of Trade: If applicable, reminder of existing restraint of trade obligations
4. Reference Letter Offer: Offer to provide a reference letter if agreed
5. Outplacement Support: Details of any career transition support services offered
6. Release Agreement: Reference to any mutual release of claims if required
7. Confidentiality Obligations: Reminder of ongoing confidentiality obligations if applicable
1. Schedule A - Severance Calculation: Detailed calculation of severance pay showing years of service and applicable formula
2. Schedule B - Benefits Summary: Comprehensive list of all benefits and their treatment post-termination
3. Schedule C - Outstanding Loans/Advances: Statement of any outstanding loans or advances and repayment arrangements
4. Schedule D - Company Property Checklist: List of company property to be returned
Relevant legal definitions
Termination Date
Severance Pay
Notice Period
Final Remuneration
Basic Salary
Benefits
Leave Pay
Company Property
Confidential Information
Statutory Deductions
UIF
Long-term Incentives
Pro-rata Bonus
Medical Aid Benefits
Retirement Fund
Tax Year
Years of Service
Settlement Agreement
Retrenchment
Operational Requirements
Outstanding Obligations
Release of Claims
Company Policies
Restraint of Trade
Severance Pay
Notice Period
Final Remuneration
Basic Salary
Benefits
Leave Pay
Company Property
Confidential Information
Statutory Deductions
UIF
Long-term Incentives
Pro-rata Bonus
Medical Aid Benefits
Retirement Fund
Tax Year
Years of Service
Settlement Agreement
Retrenchment
Operational Requirements
Outstanding Obligations
Release of Claims
Company Policies
Restraint of Trade
Clauses
Termination
Severance Payment
Notice Period
Final Salary
Leave Encashment
Benefits Cessation
Company Property Return
Confidentiality
Non-Disparagement
Tax Treatment
Release of Claims
Post-Employment Restrictions
Reference Provision
Legal Compliance
Acknowledgment
Final Settlement
Outstanding Obligations
Medical Aid Continuation
Retirement Benefits
Bonus Treatment
Long-term Incentives
Outplacement Support
Union Consultation
Dispute Resolution
Severance Payment
Notice Period
Final Salary
Leave Encashment
Benefits Cessation
Company Property Return
Confidentiality
Non-Disparagement
Tax Treatment
Release of Claims
Post-Employment Restrictions
Reference Provision
Legal Compliance
Acknowledgment
Final Settlement
Outstanding Obligations
Medical Aid Continuation
Retirement Benefits
Bonus Treatment
Long-term Incentives
Outplacement Support
Union Consultation
Dispute Resolution
Relevant Industries
Financial Services
Mining
Manufacturing
Retail
Technology
Healthcare
Construction
Agriculture
Education
Transportation
Energy
Telecommunications
Professional Services
Hospitality
Public Sector
Relevant Teams
Human Resources
Legal
Finance
Payroll
Compliance
Employee Relations
Industrial Relations
Corporate Services
Relevant Roles
CEO
Managing Director
Human Resources Director
Legal Counsel
Finance Director
Department Manager
Operations Manager
HR Manager
Payroll Manager
Compliance Officer
Employee Relations Manager
Corporate Services Director
Industrial Relations Manager
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