Mibco Collective Agreement Severance Pay

MIBCO Collective Agreement Severance Pay: What You Need to Know

If you work in the motor industry in South Africa, chances are you are covered by the Motor Industry Bargaining Council`s (MIBCO) collective agreement. This agreement spells out the rights and benefits of workers in the sector, including severance pay.

But what exactly is severance pay, and why is it important? Here`s what you need to know.

What is Severance Pay?

Severance pay is a form of compensation that employers are required to pay to employees who are laid off or retrenched. This payment is meant to help the affected employee bridge the gap between their current employment and their next job.

In South Africa, the Basic Conditions of Employment Act (BCEA) requires employers to pay severance pay to employees who have been employed for at least 12 months, and who have been retrenched for operational reasons. The amount of severance pay is calculated based on the employee`s length of service and their remuneration.

Severance Pay in the MIBCO Collective Agreement

The MIBCO collective agreement spells out the conditions for severance pay for employees in the motor industry. According to the agreement, employees who have been employed for at least 12 months and who are retrenched for operational reasons are entitled to severance pay.

The amount of severance pay is calculated based on the employee`s length of service and their remuneration.

For employees who have been employed for:

– less than 3 years: 1 week`s pay for each completed year of service

– 3 years or more but less than 5 years: 2 weeks` pay for each completed year of service

– 5 years or more: 3 weeks` pay for each completed year of service

It`s worth noting that the MIBCO collective agreement only applies to employees who are covered by the agreement. If you are not sure whether you are covered, you should check with your employer.

How to Claim Severance Pay

If you have been retrenched and are entitled to severance pay, you should contact your employer to initiate the process. Your employer will be required to calculate the amount of severance pay you are entitled to and pay it to you within 7 days of your retrenchment.

If your employer fails to pay your severance pay or disputes the amount, you can seek assistance from the Department of Labour.

Conclusion

Severance pay is an important form of compensation that provides a safety net for employees who are retrenched. If you work in the motor industry in South Africa, you should be aware of your entitlements under the MIBCO collective agreement.

If you have any questions about your rights or entitlements, you should seek advice from your union or the Department of Labour.