What to do if you are Retrenched

Has lockdown forced you to reconsider your life and finances? You’re not alone. If you’re wondering what to do if you are retrenched, we have got you covered!

Lockdown has forced many businesses to retrench their staff or close down completely. While it is arguably one of the worst things that can happen to you, there are things you can do to cope. Learn what to do if you are retrenched so you are well prepared in case this occurs. 

Retrenchment – What does it Mean? 

Retrenchment is a form of dismissal at no fault of the employee. It’s a process whereby an employer will review its business needs to increase profits or limit losses. This often leads to reducing its employees. 

Why Does It Happen? 

The main reason why companies retrench their staff is due to operational requirements. This is based on the economic, structural, technological or similar needs of an employer. Examples of each of these needs are listed below 

  • Economic – A drop in sales or services, or closure of business 
  • Structural – Restructuring of the business 
  • Technological – Employees can be replaced by new technology developed

What to do if you are Retrenched

The first thing you’re likely to do after being retrenched is panic. This is a completely valid reaction. Luckily, there are some things you can do to help lessen your stress. Use these steps as a guide to make sure you prepare well. 

Financially 

Not being financially stable is a main concern you will probably have. After all, you need money to be able to survive in the world. Here are some things you can do. 

Find out What you are Entitled to – This should be your first step. Many contracts come with retrenchment policies. This will provide you with a greater level of severance pay. You should get your owed notice pay, leave, overtime and any other payments relevant to your position. 

Ask Yourself if Legal Steps are Needed – Did your retrenchment meet the legal requirements? This is important to know, so make sure you check your employee contract. If necessary, seek legal advice. You can find the retrenchment process on the Department of Labour’s website. 

Register With the Unemployment Insurance Fund (UIF) – The sooner you start the process, the better it will be. It can be a complicated and long process. So, make sure you have the proper documentation. This includes a formal notification of retrenchment from your employer. 

Contact Your Credit Providers – Let your credit providers know of your situation. This includes mortgage, car and health insurance, and credit cards. Most current credit arrangements have insurance clauses in retrenchment cases that pays a portion of your debt while unemployed. 

Worker carrying a box of personal effects after being retrenched. Learn What to do if you are Retrenched right here.

Professionally

Though your retrenchment might have come as a shock, it’s important to remain professional. Don’t lash out or cause a scene. It may make things worse for you. 

Stay Calm – It may be hard, but it’s important to stay calm. You have more to gain by pursuing your interests, than losing your head. Your focus should be on getting what you are owed and maintaining a positive relationship with your ex-employer. 

Find out why you are Being Retrenched – By keeping your cool, you have the chance to ask your employer the hard questions. One of those questions should be why they have chosen you. This is especially important if it was a personal issue and not a structural one. 

Don’t Burn Bridges – The working world is a lot smaller than you may think. You never know who knows who and if your paths might cross again. This is why it’s essential to keep the lines of contact professional, polite and intact. 

Personally 

Being retrenched doesn’t make you a bad employee or person. You are not the cause, so it’s not your fault. These things just happen. Try not to take it personally. 

Look After Your Mental Health – Being retrenched is often a life changing and sometimes humiliating experience. It can make you feel as if you are a failure, even though it wasn’t your fault. So, be kind to yourself and use it as an opportunity to do something new. 

Come up With a Plan – As hard as it may be, you need to plan for your future. Sort out the necessary paperwork with your ex-employer as soon as possible. Once that’s done, update your CV and start looking for other jobs. 

Prepare a new Budget – This may be tricky, but not impossible. Work with the money you have and look for ways where you can save the most. Draw up a budget that reflects your new financial situation. The sooner you adjust to this, the better it will be for you. 

Stressed out woman researching What to do if you are Retrenched on her laptop

Can I Claim UIF? 

Not sure if you qualify for UIF? All employees who contributed towards the UIF can claim if: 

  • they have been let go or retrenched
  • their contract has expired 
  • their employer has gone bankrupt 

Registration requirements: 

  • ID or passport 
  • Proof of registration as someone who is seeking work 
  • A service letter from your employer
  • Copies of your last six payslips 
  • A form with your banking details filled in (UI-2.8)
  • A from that show you are no longer employed (UI-19) 

When can I not Claim?

The UIF is reserved for those who have lost their jobs involuntarily or cannot work due to illness, pregnancy or the death of an immediate family member. This means you cannot claim if you: 

  • were suspended due to a criminal act, such as fraud 
  • voluntarily quit your job
  • refused training or advice
  • are already receiving benefits from a related scheme 
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Last Updated: September 16, 2021

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ABOUT THE AUTHOR:

Thiana Pretorius
Thiana Pretorius
As an avid reader and writer, Thiana aims to create content that is both interesting and useful. She also has a passion for creative writing. Most of her free time is spent either reading or letting her imagination run wild while crafting her own stories. View my LinkedIn profile

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