The Court of Appeal has ruled in favour of a man who was retrenched by his employer in 2018, and ordered that he should be paid what is due to him.
The Industrial Court had ruled that Jacobus Fourie was entitled to Severance Pay and Retrenchment Pay as compensation for termination of his job.
However, Concor Botswana argued that he was entitled to only severance pay and not retrenchment pay..
The Industrial Court also ruled that his termination was substantively fair, but the consultative process was inadequate, unreasonable and unfair, hence his retrenchment was procedurally unfair.
“Upon termination he was paid P50,467.84 as notice pay; P477,327.40 as severance benefit; and P8,011.50 as accrued leave pay”.
The company decided to retrench after it failed to secure contracts that resulted in financial dire straits.
Concor ContraCtors had argued that it had a policy that did not entitle employees to Severance Pay and Retrenchment Pay, since South African laws do not separate the two, something which the Industrial Court refused.
The Court agreed that Fourie was entitled to P143, 713.69 as Retrenchment Pay according to the laws of Botswana.
Fourie had worked for the company for 11 years and calculated his Retrenchment Pay at 12 weeks payment according to the Employment Act.
The company approached the Court of Appeal arguing that the employee was not entitled to both Severance Pay and Retrenchment Pay, since they are the same.
The Court of Appeal stated that an employee is entitled to severance pay at the elapse of every 60 months, whilst retrenchment pay must be paid when contract is terminated as a result of retrenchment.
“Retrenchment comes at the instance of the employer and is compelled by the hardships a business might encounter at a given point. When an employee is released under such circumstances, which are clearly unplanned for, and have the effect of abruptly ending an otherwise potentially long career or employment, the retrenchment benefit is effected so as to ameliorate such hardship and cushion such an employee for a few months whilst he or she looks for alternative employment. The two pays, therefore cannot be put on the same pedestal for they serve different purposes”.
The court dismissed Concor appeal with costs and ordered that Fourie be paid his retrenchment pay.