# Regulatory Compliance Category > Labour Relations and Legislation Forum >  Voluntary Retrenchment

## Branislav

Hi,

i have signed a voluntary retrenchment contract with my company, and it was all done swiftly from their side and later on they announced that they are closing one of our factories (in which i work). 

The contract was signed end of August, and it clearly states that the company will treat me (and others) as employees until 30th November 2011. It also states that severance pay which was agreed upon on, will be paid 21 days after signing of the agreement. 

The company now refuses to pay the severance pay until the end of november, stating that people will leave early if they get paid severance before that.

What can i do to make them pay that money, according to the contract?

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## Dave A

Putting aside the breach of contract issue for a moment, I do have some sympathy for your employer's concern. What recourse does the company have if you *do* happen to leave early?

Questions on unpaid salaries comes up quite regularly. This seems to be one of the more authoritive threads on non-payment of salaries.

Perhaps the real question given the circumstances is at what point should you hit the panic button?
I'm leaning towards 1st December myself, but perhaps that depends on just how likely the company is to try to skip its obligations entirely.

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## Branislav

Thanks for the pointers Dave!

I doubt that company will skip their obligation entirely, it's just a matter of principle. They have written the contract, so they should have been careful on what conditions do they stipulate. I personally would fulfill my duties, but i do understand other employees might leave. That would be a breach of contract then, i guess it works both ways.

My predicament is simple, it is not feasable to get a lawyer to chase the money that i will get anyway. And they know it, simple case of David vs Goliath. Any hostility from my side will just result in making circumstances worse.

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## Dave A

> They have written the contract, so they should have been careful on what conditions do they stipulate.


I also thought that was a bit silly of them.

Sounds like you've got a practical outlook on it though.  :Thumbup: 

I hope it all works out well in the end.

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## firstchoice

I'm trying to get some info on voluntary retrenchment, this thread has already helped, but my situation is slightly different. 
Our company formally gave notice that it will be retrenching on a Monday, invited those who would take voluntary to do so (although there was no incentive besides the basic severance pay). They then advised that final notices will be given to those affected that same Friday. All employees would have a personal consultation as to whether they were retrenched or would keep their jobs.
At my consultation - on the Thursday, i offered my voluntary and was advised I would not lose my position, then an agreement was drawn up, although only signed by me and not yet by my employer. 2 people seen after me were retrenched. On Friday I was informed that my VR was not applicable anymore as I had already been informed, in the consultation, that I could keep the position if I wanted it. My only option now is to resign, which I'm more than happy to do as I have not received this month's salary in full, and 4/10 times - I am paid short, or late.

I just want to find out if this is another under-handed way of dealing with the staff - of which there are many (under-handed things happening, not staff).

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## Dave A

> I just want to find out if this is another under-handed way of dealing with the staff


Probably depends how you look at it. I suspect one of the advantages is you aren't bound by last in first out, at least among the volunteers. So perhaps there's a bit more leeway to try to keep who you want.

But then thoughts on retrenchment are always full of point-of-view innunendos.

Is it a threat to job security, or is it improving job security?
If they want you to stay, is that a good thing or a bad thing?
Is it a negative or positive reflection of the future prospects of the company?

The answers I hear most of the time are pretty subjective. Doesn't change the reality if one is truly objective about it all.

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## sterne.law@gmail.com

A company normally offers an incentive for voluntary retrenchment, example a week and a half instead of one week severance. The thought process is that it can sometimes short circuit the process and helps limit damage to morale.
Sometimes the employer hopes that staff with longer service may take the VR becuase they want the package and may presuem tehy will not be retrenched, so the VR is beneficial. this is particulalry relevant with thos enearing the end o ftheir career and perhaps have 20-25 years service, so retrenchment can prove beneficial. the employer in turn may be seeking to bring youth and new ideas in.

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Dave A (26-Mar-12)

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## Angel.L

Hi guys. I would like to know, if your company is giving VR,  and you can get another, and better job, is it against the law to take the VR, and start at a new job? It would help me alot if someone can help me with this! Thank you in advance

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## Justloadit

There is absolutely nothing wrong with taking a VT and then getting a new job. If you are fortunate to find a new job, then you are very lucky. The company giving the VR will probably be very happy, as now they have one less employee to worry about.

Just be very wise with the money you receive for the VT, ensure you do not squander it. Just remember that the clock for service for the next retrenchment starts on the first day you start at the new place, so the next payout will not be grand.

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Angel.L (28-Jan-13)

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## Angel.L

Thank you so much Justloadit! The main reason for my question is because we saw the trouble coming, with all the striking. We were warned that our company might start with retrenchments. And I thought about the "firts in, first out" thing. We were called by another company before the retrenchments started, and we went for the interview. Pending only a medical, we were offered a job. We must still go for the medical. 
Basically monday next week, we  will know for sure if we have the new job. I thought it might be better to put in VR, in stead of resigning. If we resign, we have to work for 30 days more. If we take VR, we can start our new life faster. So do you think I can put in VR next monday, when I am sure of the new job?
Again, thank you so much for your help everyone!

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## Dave A

> So do you think I can put in VR next monday, when I am sure of the new job?


That depends on the deadline for applications for voluntary retrenchment. It's also worth bearing in mind that the company isn't obliged to accept your application for VR.

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Angel.L (28-Jan-13)

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## Angel.L

Hi Dave. The proccesses just started about a week ago. A company that is very much in the news at the moment, because 14000 people are going to be retrenched.
So I think there will still be some time left. People got their letters, but have to "wait and see" what is going to happen. In 2 months, those who recieved letters will know if they still going to have work or not.
I can't afford to wait and see what is going to happen at this company. Our branch is also in the market, and depending on who buys it, we can all lose our jobs. The future here looks bad.
So what I am planning only has 1 downfall. And that is that they can say no.
I can live with that. I was just concerned that there might be a legal issue.
Thank you so much for the help and support! I feel at home here! Amazing site! And amazing people!

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## Dave A

Testing times for the nerves, I'm sure. I hope it all works out for you, Angel.

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## Angel.L

I will let you guys know as time goes by, what's happening. Thank you again Dave.

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