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New Legal opinion on trainee severance pay due to COVID-19
- 19 February 2021
- Accounting
- South African Accounting Academy
Due to the COVID-19 lockdown some training offices have had to retrench trainees. The trainees are employees, usually employed on a fixed term basis by SAICA-accredited training offices that are their employers.
CDH (Cliffe Dekker Hofmeyr) provided SAICA with a legal opinion, following the request for advice on severance payable to trainees by training offices. Although SAICA does not ordinarily involve itself in employment related matters, it plans to assist offices during this uncertain time.
The legal opinion concludes that employers must pay all employees, with longer than 12 months' service, severance pay. The entitlement to severance pay is not dependent on the employee's employment. A fixed term employee, employed for longer than 12 months, would nevertheless be entitled to severance pay
Annexure A to the legal opinion sets out how severance pay is calculated, by providing guidance as well as an example.
Click here to download the legal opinion.
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