Retrenching a domestic worker: when the job ends for household reasons (full process, severance and final pay)

Most households never think of themselves as an employer that "retrenches". But when the job ends because of something happening in your life - you are emigrating, moving to a flat, the youngest has started school, or the money simply is not there any more - that is exactly what the law calls it: a dismissal for operational requirements. It has its own process, its own pay-out, and its own way of going wrong at the CCMA.

This guide walks through the whole thing in order: deciding whether it really is a retrenchment, looking at alternatives, the consultation the Labour Relations Act requires, notice, severance, final pay, UIF, and what happens if it is challenged. The figures use the national minimum wage of R30.23 an hour from 1 March 2026.

1. Is it really a retrenchment?

Sectoral Determination 7, the rulebook for the domestic worker sector, defines operational requirements as "requirements based on the economic, technological, structural or similar needs of an employer". It then gives household examples, which is unusual for a labour law and very helpful. Clause 27(5) lists:

• The employer moves to another city or country.
• The employer can no longer afford a domestic worker.
• A child no longer needs a child-minder.
• The employer moves to a smaller house and no longer needs a domestic worker.

Other common household cases fit the same pattern: a parent you cared for has moved into frail care or passed away, you have lost your own job, or you are cutting from five days to two and the employee will not agree to the change.

What is not a retrenchment:

• Theft, rudeness, repeated lateness or poor work. Those are misconduct or performance issues. They need a different, fair process (warnings, a hearing) and no severance is due if the dismissal is fair. See our CCMA and unfair dismissal guide.
• Your employee resigning. No severance is due.
• A "retrenchment" followed by hiring someone else for the same job. If the job still exists, the reason was not operational. This is the single most common way household retrenchments are found unfair.
• The end of a genuine fixed-term contract, where the agreed end date simply arrives. Be careful: repeatedly renewing short contracts can create an expectation of renewal.

Be honest with yourself here. If the real reason is that you are unhappy with the work, dressing it up as a retrenchment does not make it safer - it gives your employee two arguments at the CCMA instead of one.

2. Look at the alternatives first

The Labour Relations Act (section 189) requires you to try to agree on ways to avoid the dismissal, or to soften its effect. In a household that usually means asking, and writing down, whether any of these would work:

• Fewer days or hours instead of no job. This needs your employee's agreement and a written change to the contract. See cutting hours and short time.
• A later end date - for example staying until the house is sold or until the end of the school year.
• Work with a relative, neighbour or friend who needs help. If you arrange a genuine job offer, it matters for severance (see section 6).
• Taking annual leave during a gap, rather than ending the job.
• Help with the next job: a reference letter, time off to attend interviews, sharing contacts.

You do not have to accept an alternative that does not work for your household. You do have to genuinely consider it and explain why you rejected it.

3. The consultation, step by step

Section 189 of the Labour Relations Act applies to every employer, including a household with one employee. (Section 189A, with its 60-day timetables and facilitators, is only for employers with more than 50 employees, so it does not apply to you.) The law calls this a "meaningful joint consensus-seeking process". In plain terms: tell your employee early, explain why, listen, and respond before you decide.

Step 1: Give a written notice inviting consultation

Section 189(3) lists what this letter must disclose. For a household, most items are short:

• The reasons the job may end (for example: "we are relocating to Durban at the end of February").
• The alternatives you considered, and why you rejected each.
• How many employees may be affected (usually one) and how many you employ.
• How you would choose who is affected, if you employ more than one (for example a housekeeper and a gardener).
• When the dismissal would take effect.
• The severance you propose - at least the legal minimum.
• Any help you propose: references, time off for interviews, contacts.
• Whether you might re-employ your employee in future, for example if you return.
• Anyone else you dismissed for operational reasons in the last 12 months.

If your employee cannot read, explain the letter in a language your employee understands, and say so in writing on your copy.

Step 2: Meet and talk

• Give a few days' warning of the meeting so your employee can think, and bring someone along if wanted.
• Explain the reason and the timing. Answer questions honestly.
• Ask for proposals: could the job continue in another form? Is a different end date better? Does your employee know of other work?
• Take short notes and give your employee a copy.

Step 3: Consider what you hear, and reply

Section 189(5) and (6) require you to let your employee make representations, to consider them, and to respond - in writing if they were made in writing. A one-page reply is enough: what was proposed, whether you can accept it, and why.

Step 4: Decide, then give notice

Only once you have consulted do you decide and issue the notice of termination. Giving notice on the same day as the first conversation is the classic procedural mistake: it shows the decision was already made.

How long should it take? The Act sets no fixed period for small employers. For a household, a sensible pattern is: letter on day 1, meeting on about day 4-7, written reply within a few days of that, notice of termination after that. Two to three weeks of consultation is common, and the notice period then runs on top. Start early - if you know in October that you are moving in February, consulting in October costs you nothing and protects you.

Choosing between two employees

If you employ a housekeeper and a nanny and only need one, section 189(7) says you must use agreed selection criteria or, if none are agreed, criteria that are fair and objective. In households that usually means which role is no longer needed. If the roles are interchangeable, length of service ("last in, first out") is the standard fair criterion. Personal preference is not.

4. Notice

Sectoral Determination 7, clause 24, sets the minimum notice either side must give:

• Notice must be in writing and, where needed, explained in a language your employee understands.
• You may pay instead of notice - the wages your employee would have earned during the notice period - and end the job sooner.
• Your contract may give longer notice. The longer period then applies.
• Annual leave may not be set to run inside the notice period without your employee's agreement - pay it out instead.

Work out the last working day from the date you give notice:

Calculator by CalcSA - open the notice period calculator if it does not load.

5. Severance pay

Clause 27(2) of Sectoral Determination 7 is short: an employer must pay a domestic worker dismissed for operational requirements "severance pay equal to at least one week's full pay for each completed year of continuous service with that employer".

• Completed years only. 4 years and 11 months is 4 years. Under one full year, no severance is due under the clause, although notice and other pay still are.
• "Full pay" means your employee's normal pay for a week. Include regular payments such as a fixed transport allowance; do not reduce it for a week with less work.
• Continuous service with you counts from the first day, including time before any contract was written down.
• It is a minimum. Many households pay more, especially after long service. Anything extra is a gift you choose to make.
• It is on top of everything else. Clause 27(4) says severance does not affect any other amount owed - notice pay, leave pay and wages are still due.

Worked example 1: full-time at the minimum wage

Your employee works 45 hours a week at R30.23 an hour, and has been with you for 6 years and 8 months.

• Weekly pay: 45 x R30.23 = R1,360.35.
• Completed years: 6.
• Minimum severance: 6 x R1,360.35 = R8,162.10.

Worked example 2: above the minimum, shorter week

Your employee earns R7,500 a month for 40 hours a week and has 3 years and 11 months of service.

• Weekly pay: R7,500 / 4.333 (the average weeks in a month) = about R1,730.90.
• Completed years: 3.
• Minimum severance: 3 x R1,730.90 = about R5,192.71.

Worked example 3: under a year

Your employee has worked for you for 10 months.

• Completed years: 0, so no severance is due under clause 27.
• But notice is 4 weeks (more than 6 months' service), and unused leave must still be paid out.

Check the amount for your own employee:

Calculator by CalcSA - open the severance pay calculator if it does not load.

6. If you find your employee another job

Clause 27(3) says a domestic worker who unreasonably refuses an offer of alternative employment - with you or with any other employer - loses the right to severance under the clause. This is a real incentive to help, but it is narrower than it sounds:

• The offer must be genuine and specific: a named employer, the hours, the pay, the start date.
• Refusing must be unreasonable. A job with clearly lower pay, much longer travel, or live-in work for someone with children at home can be reasonably refused.
• Put the offer in writing, and record the answer.
• When in doubt, pay the severance. A dispute about severance alone can be referred to the CCMA (clause 27(5)), and the cost of losing is the same amount plus your time.

7. Final pay: the complete list

On the last day your employee must receive everything owed. Put it all on one final payslip:

• Wages up to the last day worked, including any overtime and Sunday or public holiday pay.
• Notice pay, if you paid instead of notice.
• Unused annual leave, paid out. This is the one time leave may be paid instead of taken.
• Severance, if your employee has at least one completed year.
• Any pro-rata bonus your contract promises (a bonus is not required by law unless agreed).
• Less any lawful deductions - UIF on the wage portion, and an outstanding loan balance only if your employee agreed to it in writing. See loans and deductions.

Worked example: leave pay-out

Your employee in example 1 works 9 hours a day, five days a week, and has 10 days of unused leave.

• Daily pay: 9 x R30.23 = R272.07.
• Leave pay-out: 10 x R272.07 = R2,720.70.
• With severance from example 1: R8,162.10 + R2,720.70 = R10,882.80, before final wages.

Calculator by CalcSA - open the leave pay calculator if it does not load.

8. UIF, the certificate of service and the paperwork

A retrenched employee is unemployed through no fault of the employee and can usually claim UIF unemployment benefits. Your paperwork decides how quickly that money arrives.

• Declare the termination to UIF on uFiling (or at a labour centre), with the reason "retrenchment" or "operational requirements". See our UIF step-by-step guide.
• Give your employee a UI-19 (the employer's declaration) and copies of recent payslips. The labour centre will ask for them.
• Give a certificate of service: the Basic Conditions of Employment Act (section 42) requires one when employment ends. It states the dates, the job and the pay. The reason for ending may only be included if your employee asks.
• Tell your employee to claim promptly. The Unemployment Insurance Amendment Act, 2016, allows a claim within 12 months of becoming unemployed, but benefits are paid from the date of the claim in practice, so delay costs money.
• Keep copies of the consultation letter, notes, reply, notice and final payslip for at least three years.

9. Is severance taxed?

Most domestic workers earn well below the income tax threshold, so in practice there is usually no PAYE on the final pay. For completeness: SARS treats a retrenchment pay-out as a severance benefit, taxed using the retirement lump-sum table rather than the normal monthly tables, and the first band of that table is taxed at 0%.

10. Changing your mind, or hiring again later

• If the move falls through during consultation, say so and stop the process. That is what consulting first is for.
• If you need help again within months, offer the job back to your former employee first. You said in your letter whether re-employment was possible; act consistently with it.
• Hiring a replacement soon after for the same work is strong evidence the job never ended - and that the retrenchment was unfair.

11. If it goes to the CCMA

Your employee has 30 days from the date of dismissal to refer an unfair dismissal dispute to the CCMA. A retrenchment can be unfair in two ways:

• Substantively unfair - the reason was not a genuine operational one (for example, you hired someone else).
• Procedurally unfair - the reason was real, but you did not consult, or decided before consulting.

Compensation for an unfair dismissal can be up to 12 months' pay, and arbitrators often award less where only the procedure was wrong. That is still far more than most severance amounts - which is why the consultation is worth doing properly. Estimate the exposure:

Calculator by CalcSA - open the CCMA compensation calculator if it does not load.

12. The five mistakes we see most

• Giving notice in the first conversation. Consult first, then decide.
• Doing it all verbally. Without the letter, notes and reply you cannot show a process happened.
• Counting severance in months, not weeks. The minimum is one week per completed year.
• Forgetting the leave pay-out. It is owed even when severance is not.
• Not declaring to UIF. Your employee's claim stalls, and that frustration often becomes a CCMA referral.

A consultation letter you can adapt

How HomeHR helps

• The contract maker sets out notice periods and the terms that decide what is owed when a job ends - start with one if you do not have a written contract yet.
• The free payslip maker produces the final payslip, with wages, leave pay-out and severance as separate lines.

General information, not legal advice. Every figure we use is on the rates page with its source.