By: Natasha Archary
After recent job losses in the mining sector were highlighted in the news, Gugulethu Mfuphi roped in Managing Director at Molatudi Attorneys, Osbourne Molatudi an employment and labour law expert to share how you can financially prepare for retrenchments.
The hard truth is that thousands of South Africans are facing Section 189 restructuring processes due to loadshedding which has affected several businesses financially, leading to several job losses.
Many South Africans don’t plan for the probability of retrenchment, and when asked how they would survive if they lost their jobs, most don’t have a plan or backup savings to tap into.
Here are a few ways you can financially prepare for retrenchments:
Evaluate your expenses
If you got a letter today saying you are going to be retrenched how would you pay for all your monthly expenses?
Debts such as medical aid, car and house payments, and school fees do not stop, but there are ways to manage your financial affairs to navigate through this time. It is important to realise that retrenchment is not always negative, and it can sometimes lead you to your dream job or true calling.
Don’t use debt as your backup plan
It’s important to plan, as loans and credit card money are not your money and will eventually have to pay back with ridiculous interest rates.
Coupled with getting yourself in debt following a retrenchment is the debt you already have, Molatudi advised listeners to never use debt as a backup plan.
Listen to the conversation on Kaya Biz:
Understand your industry?
How volatile is your industry? One of the most important things to consider when you are doing planning is to be fully aware of the trends within your industry. Examine the current performance and look at the economy and how it impacts your environment.
Are you a freelancer, or have a permanent contract?
It’s always important to note what your contract with your employer says should you be retrenched. Freelancers and contractors tend to walk away with nothing during the retrenchment processes and are usually the first to go.
Important things to note:
- It’s better to see a financial adviser before anything goes wrong to plan for any eventualities
- Retrenchment cover is important to have
- Get in the habit of having less debt and paying current debt
- Don’t be paranoid, but make sure you plan for the unknown
Should you get retrenched – Get your house in order:
– Call your creditors
– Claim your package, UIF, and other insurance you have
– Update your C.V, register on career portals
– Consult, consult, consult. Get as much advice as possible
– Manage your finances – Know the percentage of your income versus expense and where your payout will go should you get retrenched
Also read: Phone lines at Gauteng hospitals are down due to unpaid bills
