Nowadays the term 'job security' has become as obsolete as an abacus. In fact, those of us who risk self-employment are probably feeling more secure than our corporate counterparts. In this world of downsizing and retrenchments, no-one is assured of employment for his or her lifetime, so it’s a good idea to have a plan of action before you suddenly find yourself without a job.

A company cannot simply retrench you on a whim; they have to provide you with a clear case for their decision. The justification must be based on 'operational requirements'. In other words, they are allowed to retrench you for economic, technical or structural reasons.

A company has to individually engage in consultations with all employees that could be affected by the retrenchment. The employer has to discuss options with the purpose of avoiding retrenchment. So, for example, they should see if a reduction in working hours, or offering early retirement, is a solution.

What kind of payout?

If the employee is offered alternative employment on similar terms and conditions of their current employment, the company will not have to pay a severance.

So what kind of payout can you expect if you are retrenched? Labour law requires a minimum severance pay of one week per year of service, but you can get more depending on the position of your employer.

Your typical retrenchment package has a number of elements: your notice salary (one to three months depending on your letter of employment), leave pay (for leave due but not taken) and a severance payment. If you have a company car or laptop, they may offer these items for sale for a favourable price.

One of the big downfalls of retrenchment is the loss of a medical aid as they are usually subsidised by your company. Some employers may allow you to stay on the fund for a few months after retrenchment until you find your feet.

Hang onto your medical aid

You should never allow your medical aid to lapse, so ask your existing fund if you can sign up for a basic cover until you can upgrade. A hospital plan is a must, because if you are involved in an accident, the costs can literally push you into insolvency.

When companies are downsized or restructured even the most competent staff lose their jobs. Many people experience self-doubt, a sense of failure and even depression after retrenchment. If you can maintain a positive attitude you will find another job and it may be better than your previous one. Griping and moaning to a prospective employer about the 'insensitive animal that dismissed you' is not going to score any points. Focus on the experience you have gained and highlight your skills.

Expect the best and prepare for the worst

Obviously a sudden loss of income is a big worry, particularly if you have a family to support. In a perfect world, you would have saved up an amount equal to six months' salary to accommodate such an event (click here to learn how to put together an emergency fund). It will enable you to pay your bills and keep stress levels down while seeking alternative employment.

This kind of long range planning is so easy to put off if you don’t feel threatened at the moment. Don’t be caught unprepared; keep your CV up to date and your savings plan on schedule. Network as much as possible so that you make connections with people who could be your potential employers in the future.

Article continues on page two...


Page: 1 of 4 - next
RSS
Digg
de.li.cious
facebook
What will you regret? Advice to a reader who wants to know if he should accept the promotion he's been offered...
Shares: flat as a pancake Allan Gray on why the stock market is set to move sideways for many years...
Medical aid 101 A guide to medical schemes including guidance on choosing one and your rights according to law...