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Retrenchment Notice Template — LRA s.189 / s.189A — South Africa
Retrenchment is the single most procedurally exposed dismissal category in South African labour law. The LRA s.189 (small-scale) and s.189A (large-scale 50+ employee) regimes prescribe what must be in the notice, how consultation must work and what severance is due. Our free template implements every required element under the new 2025 Code of Good Practice on Dismissal (effective 4 September 2025) — for contemplated, large-scale and final retrenchment notices.
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Meridian Group (Pty) Ltd
22 Fredman Drive, Sandton, Johannesburg 2196
+27 11 234 5678
hr@meridiangroup.co.za
20 May 2026
Ayanda Dlamini
47 Berea Road, Durban 4001
SA ID: 9001015009087
Employee No: EMP-04217
SA ID: 9001015009087
Employee No: EMP-04217
RE
NOTICE OF CONTEMPLATED LARGE-SCALE RETRENCHMENT — LRA s.189A — REF HR-RTR-2026-0021
Dear Ayanda Dlamini,
We write to formally notify you that the Company is implementing a CONTEMPLATED large-scale retrenchment under section 189A of the LRA affecting your position as Senior Software Engineer (Test) in the Technology and Innovation department (employed since 1 March 2020 — 6 completed years of service). This notice is issued under section 189A of the Labour Relations Act 66 of 1995 (LRA), consistent with the consolidated 2025 Code of Good Practice on Dismissal (effective 4 September 2025).
1. REASONS FOR THE PROPOSED RETRENCHMENT
The retrenchment is necessitated by technological — automation, digitisation or new technology. The specific facts are as follows:
Implementation of automated software-testing tooling (Selenium + GitHub Copilot) since November 2025. The volume of manual test work has fallen by approximately 70% since deployment and is forecast to fall below 10% by September 2026. The Senior Software Engineer (Test) and Test Analyst roles are no longer commercially justifiable in their current form. This is an industry-wide trend reflected in the latest sector outlook reports.
The retrenchment is necessitated by technological — automation, digitisation or new technology. The specific facts are as follows:
Implementation of automated software-testing tooling (Selenium + GitHub Copilot) since November 2025. The volume of manual test work has fallen by approximately 70% since deployment and is forecast to fall below 10% by September 2026. The Senior Software Engineer (Test) and Test Analyst roles are no longer commercially justifiable in their current form. This is an industry-wide trend reflected in the latest sector outlook reports.
2. ALTERNATIVES CONSIDERED
Before reaching the decision to contemplate retrenchment, the Company considered the following alternatives:
1. Redeployment to vacant roles in the Engineering team — none currently available at the relevant seniority. 2. Reduction of hours or short-time — declined by the majority of employees consulted in March 2026. 3. Voluntary separation packages — offered from 1 March 2026 to all affected employees; uptake limited to 2 of 8 affected employees. 4. Reskilling for adjacent roles — explored but the required upskilling period (12-18 months) exceeds the commercial runway available. 5. Company-wide recruitment freeze — in effect since November 2025; reviewed quarterly.
Before reaching the decision to contemplate retrenchment, the Company considered the following alternatives:
1. Redeployment to vacant roles in the Engineering team — none currently available at the relevant seniority. 2. Reduction of hours or short-time — declined by the majority of employees consulted in March 2026. 3. Voluntary separation packages — offered from 1 March 2026 to all affected employees; uptake limited to 2 of 8 affected employees. 4. Reskilling for adjacent roles — explored but the required upskilling period (12-18 months) exceeds the commercial runway available. 5. Company-wide recruitment freeze — in effect since November 2025; reviewed quarterly.
3. EMPLOYEES AFFECTED AND SELECTION CRITERIA
A total of 8 employees are potentially affected across the following categories: Senior Software Engineer (Test) ×3; Test Analyst ×5.
The Company's proposed selection criterion is: LIFO with skills-retention override. Detail: LIFO within each affected category, with skills-retention override for any employee holding ISTQB Advanced certification (no current employee in the affected categories holds this certification). Within the Test Analyst category, pure LIFO across all five employees.
A total of 8 employees are potentially affected across the following categories: Senior Software Engineer (Test) ×3; Test Analyst ×5.
The Company's proposed selection criterion is: LIFO with skills-retention override. Detail: LIFO within each affected category, with skills-retention override for any employee holding ISTQB Advanced certification (no current employee in the affected categories holds this certification). Within the Test Analyst category, pure LIFO across all five employees.
4. TIMELINE AND TERMINATION DATE
The consultation period started on 20 May 2026. If the consultation process confirms the contemplated retrenchment, your employment would terminate on or about 31 August 2026, following four (4) weeks notice under section 37 of the BCEA.
The consultation period started on 20 May 2026. If the consultation process confirms the contemplated retrenchment, your employment would terminate on or about 31 August 2026, following four (4) weeks notice under section 37 of the BCEA.
5. SEVERANCE PAY AND FINAL PAYMENTS
Severance pay shall be calculated at the rate of one (1) week's remuneration for each completed year of continuous service, in accordance with section 41 of the BCEA. Based on your 6 completed years of service and weekly remuneration of ZAR 12 692, the indicative statutory severance figure is ZAR 76 152 (subject to PAYE).
On or before the termination date you will also receive: (a) all outstanding remuneration; (b) any accrued and untaken annual leave (calculated under section 40 of the BCEA); and (c) any other amounts due to you. Your UI-19 (UIF form) and Certificate of Service (required under section 42 of the BCEA) will be issued to you on or before the termination date.
Severance pay shall be calculated at the rate of one (1) week's remuneration for each completed year of continuous service, in accordance with section 41 of the BCEA. Based on your 6 completed years of service and weekly remuneration of ZAR 12 692, the indicative statutory severance figure is ZAR 76 152 (subject to PAYE).
On or before the termination date you will also receive: (a) all outstanding remuneration; (b) any accrued and untaken annual leave (calculated under section 40 of the BCEA); and (c) any other amounts due to you. Your UI-19 (UIF form) and Certificate of Service (required under section 42 of the BCEA) will be issued to you on or before the termination date.
6. SECTION 189A — LARGE-SCALE RETRENCHMENT FRAMEWORK
This retrenchment is subject to section 189A of the LRA because the Company is an employer of between 50 and 200 employees (threshold: 10 contemplated retrenchments). The Company is requesting the appointment of a CCMA-appointed facilitator by lodging LRA Form 7.20 with the CCMA within fifteen (15) days of this notice. Notice of retrenchment cannot be given before the expiry of the sixty (60) days following the date of the section 189(3) notice. The facilitation process includes a minimum of four (4) facilitation meetings in accordance with the Information Sheet: Retrenchment in terms of section 189A of the LRA (CCMA-I805-2025-01).
This retrenchment is subject to section 189A of the LRA because the Company is an employer of between 50 and 200 employees (threshold: 10 contemplated retrenchments). The Company is requesting the appointment of a CCMA-appointed facilitator by lodging LRA Form 7.20 with the CCMA within fifteen (15) days of this notice. Notice of retrenchment cannot be given before the expiry of the sixty (60) days following the date of the section 189(3) notice. The facilitation process includes a minimum of four (4) facilitation meetings in accordance with the Information Sheet: Retrenchment in terms of section 189A of the LRA (CCMA-I805-2025-01).
7. PREFERENTIAL RE-EMPLOYMENT
For a period of twelve (12) months from your termination date, in accordance with section 189(5) of the LRA, the Company commits to offer you preferential re-employment in any vacancy that arises for your previous role, or a role substantially similar to your previous role, for which you are qualified. Please ensure that the Company has your current contact details for this purpose.
For a period of twelve (12) months from your termination date, in accordance with section 189(5) of the LRA, the Company commits to offer you preferential re-employment in any vacancy that arises for your previous role, or a role substantially similar to your previous role, for which you are qualified. Please ensure that the Company has your current contact details for this purpose.
8. TRAINING, RESKILLING AND OUTPLACEMENT
The Company will provide the following assistance to support your transition:
CV-writing workshop (1 × 2 hours) and outplacement services through an external partner (Adcorp) for ninety (90) days post-termination. Free access to LinkedIn Learning for six (6) months from termination date. Reskilling bursary of up to ZAR 25,000 toward an accredited South African short course in cloud engineering, DevOps or AI / ML.
The Company will provide the following assistance to support your transition:
CV-writing workshop (1 × 2 hours) and outplacement services through an external partner (Adcorp) for ninety (90) days post-termination. Free access to LinkedIn Learning for six (6) months from termination date. Reskilling bursary of up to ZAR 25,000 toward an accredited South African short course in cloud engineering, DevOps or AI / ML.
9. COUNSELLING AND EMPLOYEE ASSISTANCE
You and your immediate family members will have continued access to the Company's Employee Assistance Programme (EAP) for a period of ninety (90) days from the termination date, providing confidential counselling and practical support during the transition.
You and your immediate family members will have continued access to the Company's Employee Assistance Programme (EAP) for a period of ninety (90) days from the termination date, providing confidential counselling and practical support during the transition.
10. UIF CLAIM SUPPORT
The Company will issue your Form UI-19 (Employer's Declaration of Employees) to the Department of Employment and Labour on or before your termination date and will assist you in completing Form UI-2.7 (remuneration confirmation) for your unemployment benefits claim under the Unemployment Insurance Act 63 of 2001. Please note that retrenchment is a qualifying basis for UIF unemployment benefits.
The Company will issue your Form UI-19 (Employer's Declaration of Employees) to the Department of Employment and Labour on or before your termination date and will assist you in completing Form UI-2.7 (remuneration confirmation) for your unemployment benefits claim under the Unemployment Insurance Act 63 of 2001. Please note that retrenchment is a qualifying basis for UIF unemployment benefits.
11. CCMA REFERRAL — YOUR RIGHTS
If you believe that the large-scale retrenchment is unfair, you may refer an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) within thirty (30) days of the date of termination. The referral is made on LRA Form 7.11, available at www.ccma.org.za. The CCMA is a free dispute-resolution body and you do not require legal representation for the conciliation process.
If you believe that the large-scale retrenchment is unfair, you may refer an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) within thirty (30) days of the date of termination. The referral is made on LRA Form 7.11, available at www.ccma.org.za. The CCMA is a free dispute-resolution body and you do not require legal representation for the conciliation process.
12. LABOUR COURT INTERDICT (s.189A(13))
For large-scale retrenchments, an affected party may apply to the Labour Court under section 189A(13) of the LRA within thirty (30) days of the section 189(3) notice for an order requiring the Company to comply with a fair procedure, including an order interdicting the Company from issuing notices of termination, retracting any notices already issued, or requiring the Company to re-instate dismissed employees pending compliance.
For large-scale retrenchments, an affected party may apply to the Labour Court under section 189A(13) of the LRA within thirty (30) days of the section 189(3) notice for an order requiring the Company to comply with a fair procedure, including an order interdicting the Company from issuing notices of termination, retracting any notices already issued, or requiring the Company to re-instate dismissed employees pending compliance.
13. SECTION 189A(7) / (8) STRIKE OPTION
For large-scale retrenchments under section 189A, the affected employees collectively have a right under section 189A(7) and (8) to elect strike action instead of referring an unfair dismissal dispute to arbitration. The Company places this option on record as part of the procedural framework. The strike option is exercisable only collectively through a recognised trade union or a majority of the affected employees, not individually.
For large-scale retrenchments under section 189A, the affected employees collectively have a right under section 189A(7) and (8) to elect strike action instead of referring an unfair dismissal dispute to arbitration. The Company places this option on record as part of the procedural framework. The strike option is exercisable only collectively through a recognised trade union or a majority of the affected employees, not individually.
ACKNOWLEDGEMENT
By signing below, you acknowledge receipt of this notice. Your signature does not indicate agreement with the contents — you retain all rights to consult, to challenge the retrenchment and to refer disputes as set out above. Should you refuse to sign, a witness will be requested to record service of this notice.
By signing below, you acknowledge receipt of this notice. Your signature does not indicate agreement with the contents — you retain all rights to consult, to challenge the retrenchment and to refer disputes as set out above. Should you refuse to sign, a witness will be requested to record service of this notice.
YOURS SINCERELY,
Pieter van der Merwe
Head of Human Resources
Date: ____________________
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What Is a Retrenchment Notice (LRA s.189)?
A retrenchment notice is a written notification from an employer to an employee that the employer is either contemplating or implementing termination of employment based on operational requirements — economic, structural, technological or similar. South African labour law treats retrenchment under section 189 (small-scale, employers with fewer than 50 employees or contemplating fewer than the threshold) and section 189A (large-scale, 50+ employee employer plus threshold-meeting retrenchment count) of the Labour Relations Act 66 of 1995.
The section 189(3) notice opens the consultation process: it lists the reasons, the alternatives considered, the number affected and the selection method, and invites the employee or their representatives to consult on each issue. The Final Retrenchment Notice is issued only after consultation has been completed in a meaningful (joint consensus-seeking) manner. For large-scale retrenchments under s.189A, a mandatory 60-day facilitated consultation period applies, supervised by a CCMA-appointed facilitator at the request of either party (LRA Form 7.20 within 15 days of the s.189(3) notice).
The 2025 Code of Good Practice on Dismissal (effective 4 September 2025) consolidates the previous Schedule 8 and the 1999 Operational Requirements Code into a single dismissal framework. Under the new Code, retrenchment notices must be in a prescribed format and must set out reasons, alternatives, selection criteria, severance pay and re-employment prospects. Employers must consult meaningfully — going through the motions does not satisfy the Code. Failure to follow s.189 or s.189A renders the retrenchment procedurally unfair and exposes the employer to up to 12 months' compensation for ordinary unfair dismissal, or up to 24 months for automatically unfair dismissal.
What's Covered in This Template
Three notice stages, four reason categories, five selection methods and full s.189A large-scale machinery in one template.
Three Notice Stages
s.189(3) Contemplated, s.189A Large-Scale Contemplated and Final Retrenchment Notice — auto-adjusted subject line and clause set per stage.
Operational Reason Category
Economic, structural, technological or similar — with required factual elaboration.
Alternatives Considered
Redeployment, hours reduction, voluntary separation, reskilling, recruitment freeze — required by LRA s.189(2)(a)(i).
Affected Employee Count and Categories
Total headcount and job-category breakdown — required by LRA s.189(3).
Five Selection Methods
LIFO, LIFO + skills, skills + performance, bumping, voluntary first — with detailed override criteria field.
Termination Date and Notice Period
BCEA s.37 minimum notice (1 week to 1 month based on service) plus contractual options.
Severance Pay Calculator
BCEA s.41 statutory minimum (1 week per completed year) or enhanced — with automatic indicative ZAR calculation in the PDF.
Section 189A Large-Scale Machinery (Expert)
Threshold check by employer size, 60-day mandatory consultation, CCMA facilitator request (Form 7.20).
Preferential Re-Employment (Expert)
12-month LRA s.189(5) preferential re-employment commitment.
Training, Outplacement and Counselling (Expert)
Specific reskilling and EAP commitments — meaningful consultation evidence.
UIF Claim Support (Expert)
Form UI-19 + UI-2.7 completion assistance under Unemployment Insurance Act 63 of 2001.
Dispute Resolution (Expert)
CCMA Form 7.11 (30 days), Labour Court interdict under s.189A(13) (30 days from s.189(3) notice), s.189A(7)/(8) collective strike option.
How to Create a Retrenchment Notice in South Africa
Five steps from operational decision to procedurally bulletproof notice.
- 1
Decide the Stage
Contemplated s.189(3) notice opens consultation. Large-scale s.189A notice opens the 60-day facilitated process for 50+ employee employers. Final Retrenchment Notice closes the process.
- 2
Document the Operational Reason
State the specific economic, structural, technological or similar driver. Vague "cost-cutting" reasoning fails the CCMA test — be factual and specific.
- 3
List the Alternatives
Every alternative the Company considered, why it was rejected. This is the most contested element at the CCMA — bare denial that alternatives existed is fatal.
- 4
Pick a Fair Selection Method
LIFO is presumed fair. LIFO + skills retention is the SA market norm. Skills + performance requires objectively measurable criteria. Document the criterion and any override.
- 5
Calculate Severance and Issue
BCEA s.41 minimum is 1 week per completed year. Issue your UI-19 and Certificate of Service on or before the termination date.
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Legal Considerations
Retrenchment is procedurally the most exposed dismissal category — defective notices routinely trigger CCMA reinstatement.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified South African attorney or registered labour practitioner for advice specific to your situation.
Reviewed for South African law
Section 189(3) Notice — Required Content
The s.189(3) notice opens the consultation process. The notice must be in writing and contain: the reasons for the proposed retrenchment; the alternatives considered before proposing retrenchment, and why those alternatives were rejected; the number of employees likely to be affected and their job categories; the proposed method for selecting employees to be retrenched; the time frame for the proposed retrenchment; the proposed severance pay formula; and any assistance the employer proposes to offer (re-employment opportunities, training, counselling). Omission of any of these elements is the single most common reason the CCMA finds retrenchments procedurally unfair.
Section 189A — Large-Scale Process
Section 189A applies where the employer has 50+ employees and contemplates retrenching at least: 10 for 51-200 staff; 20 for 201-300; 30 for 301-400; 40 for 401-500; or 50 for 500+. Section 189A imposes a mandatory 60-day facilitated consultation period from the date of the s.189(3) notice, supervised by a CCMA-appointed facilitator (requested on LRA Form 7.20 within 15 days). The facilitator must hold at least four facilitation meetings. Notice of termination cannot be issued before the 60-day period ends. The 2025 CCMA Information Sheet (CCMA-I805-2025-01) codifies the process.
BCEA s.41 Severance Pay — Minimum and Calculation
Section 41 of the BCEA entitles an employee dismissed for operational requirements to severance pay of at least one (1) week's remuneration for each completed year of continuous service. "Remuneration" includes basic salary, regular allowances, value of board / accommodation, employer pension contribution and similar items; bonuses and incidental payments are usually excluded unless contractually required. An employee who unreasonably refuses an offer of alternative employment may lose the right to severance. Enhanced severance (above the statutory minimum) may be agreed in consultation or set by Company policy and is the SA market practice for large-scale retrenchments.
Frequently Asked Questions
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