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How to Retrench a Domestic Worker Fairly
Sometimes a household genuinely can no longer keep a domestic worker on: money is tight, you are relocating, or the work has simply fallen away. South African law allows you to retrench for these operational reasons, but only if you follow a fair process first. This guide walks you through that process step by step, scaled to a household, and gives you a complete retrenchment letter you can adapt and use.
Last reviewed June 2026 · wage figures from 1 March 2026
RETRENCHMENT OF A DOMESTIC WORKER - TWO-PART LETTER TEMPLATE
How to use: Complete Part A first and give it to your worker before any final decision is made. Hold at least one consultation meeting. Only after consultation, complete Part B. Replace every item in [SQUARE BRACKETS]. Keep signed copies of both parts.
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PART A - NOTICE OF POSSIBLE RETRENCHMENT AND INVITATION TO CONSULT
(Issued in terms of section 189(3) of the Labour Relations Act 66 of 1995)
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Date: [DATE]
From: [EMPLOYER FULL NAME], of [HOME ADDRESS]
To: [WORKER FULL NAME], employed as [POSITION, e.g. domestic worker / nanny / gardener] since [START DATE]
Dear [WORKER FIRST NAME],
1. PURPOSE OF THIS LETTER. I am considering ending your employment for operational reasons (retrenchment). No final decision has been made. This letter explains why, and invites you to discuss it with me before anything is decided.
2. REASONS. I am contemplating retrenchment because: [STATE THE REAL REASON, e.g. my household income has dropped and I can no longer afford your wage / our family is relocating to [PLACE] on [DATE] / the work you were employed to do is no longer needed because [REASON]].
3. ALTERNATIVES I HAVE CONSIDERED. Before proposing retrenchment I considered: [e.g. reducing your days from five to two per week; finding you a position with another household; delaying the move]. These have not resolved the problem because [REASON], but I remain open to your suggestions.
4. EMPLOYEES AFFECTED. [e.g. One position is affected: yours. / I employ two people and one position may be affected.]
5. PROPOSED SELECTION METHOD (only if more than one employee): [e.g. last in, first out / the position of [ROLE] is no longer required].
6. PROPOSED TIMING. If retrenchment goes ahead, I propose that your last working day would be [PROPOSED DATE], after proper notice.
7. PROPOSED SEVERANCE PAY. I propose severance pay of one week's remuneration for each completed year of your service, as required by section 41 of the Basic Conditions of Employment Act, which on your service of [NUMBER] completed years amounts to [NUMBER] weeks' remuneration, currently about R[AMOUNT]. You will also be paid notice (or payment instead of notice) and any leave owing to you.
8. ASSISTANCE OFFERED. I will: provide a written reference and certificate of service; allow reasonable paid time off to attend interviews before your last day; declare your termination to the UIF promptly so that you can claim unemployment benefits; [ANY OTHER HELP, e.g. ask neighbours and local groups about openings].
9. INVITATION TO CONSULT. I invite you to meet with me on [DATE] at [TIME] at [PLACE] to discuss this letter, any ways to avoid or reduce the retrenchment, the timing, and the proposed payments. You may bring a person of your choice to assist or represent you, and you may respond in writing instead or in addition.
Signed (employer): ______________________ Date: __________
Received by worker: ______________________ Date: __________
(If the worker cannot read this letter, it must be explained to them in a language they understand, in the presence of a witness, who should also sign.)
Witness: ______________________ Date: __________
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PART B - NOTICE OF RETRENCHMENT (FINAL)
Issue only after consultation under Part A has been completed.
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Date: [DATE]
To: [WORKER FULL NAME]
Dear [WORKER FIRST NAME],
1. OUTCOME OF CONSULTATION. We met on [DATE(S)] to discuss the notice of possible retrenchment dated [DATE OF PART A]. We considered the following alternatives: [LIST], but regrettably none resolved the situation because [REASON]. Your employment will therefore end by reason of my operational requirements. This is not a reflection on your conduct or work, which has been [e.g. consistently good].
2. NOTICE. You are entitled to [four weeks' / one week's - four weeks if employed more than six months] notice. [CHOOSE ONE:] (a) Your notice period runs from [DATE] and your last working day will be [DATE]. / (b) I have chosen to pay you for the notice period instead of your working it, and your employment ends on [DATE].
3. FINAL PAYMENT. On or before your last day you will be paid:
3.1 Wages up to and including your last day: R[AMOUNT];
3.2 Notice pay / payment instead of notice ([NUMBER] weeks): R[AMOUNT];
3.3 Severance pay ([NUMBER] completed years x one week's remuneration of R[WEEKLY AMOUNT]): R[AMOUNT];
3.4 Payment for [NUMBER] days of accrued, untaken annual leave: R[AMOUNT];
TOTAL: R[AMOUNT], paid by [cash / EFT to your account ending [DIGITS]] on [DATE].
4. UIF. I will declare the termination of your employment to the Unemployment Insurance Fund by [DATE] so that you can apply for UIF benefits. Your UIF reference number is [NUMBER, if known].
5. CERTIFICATE OF SERVICE AND REFERENCE. A certificate of service and a written reference are attached / will be given to you by [DATE].
6. RE-EMPLOYMENT. If I need to fill the same or a similar position within [e.g. six] months, I will offer it to you first before employing anyone else.
7. YOUR RIGHTS. If you believe this retrenchment is unfair, you may refer a dispute to the CCMA free of charge within 30 days of your dismissal.
8. THANK YOU. Thank you for your [NUMBER] years of service to our household. I am sorry that it has to end this way and I wish you well.
Signed (employer): ______________________ Date: __________
Acknowledgement of receipt by worker (receipt only, not agreement):
Signed (worker): ______________________ Date: __________
Witness: ______________________ Date: __________
When retrenchment is the right route
Retrenchment is a no-fault dismissal for operational reasons. For a household that typically means one of three things: you can no longer afford the wage, you are moving (to another town, overseas, or into a complex where services are provided), or the role has genuinely shrunk or disappeared, for example the children have grown up and a full-time nanny is no longer needed.
What retrenchment is not is a shortcut around a difficult conversation. If the real problem is theft, repeated absence or poor work, retrenching instead of dealing with the issue properly is unfair and will not survive scrutiny at the CCMA. Misconduct and poor performance each have their own fair procedures.
Step 1: Put the proposal in writing and invite the worker to talk
Section 189 of the Labour Relations Act requires every employer, including a household, to consult before retrenching. The starting point is a written notice that sets out the reasons you are contemplating retrenchment, the alternatives you have considered and why they did not work, who may be affected, how you propose to select anyone for retrenchment, the proposed timing, the severance pay you propose, and any help you can offer, such as a reference letter or paid time off to attend interviews.
In a household this does not need to be a corporate exercise. Hand the worker the letter, explain it in a language they understand, and set a date a few days later to sit down and talk. The worker is entitled to bring someone to support or represent them. The template at the bottom of this page covers the written notice for you.
Step 2: Genuinely consider alternatives
Consultation must be a real attempt to find a way to avoid or soften the retrenchment, not a box-ticking meeting where the decision is already final. Alternatives that often work in households include reducing days or hours by agreement (with a matching wage reduction), delaying the end date so the worker has more time to find other work, helping to place the worker with a neighbour, friend or the incoming owners of your home, or agreeing a later start to the retrenchment to bridge a school term or notice on the worker's own rented accommodation.
Listen to the worker's own proposals and respond to them seriously. Keep short written notes of each conversation, what was proposed, and why anything was rejected. Those notes are your best protection if the fairness of the process is ever questioned.
Step 3: If you employ more than one person, select fairly
If you employ, say, a housekeeper and a gardener and only one position must go, the selection criteria must be fair and objective. The default approach is last in, first out (LIFO): the most recently hired person is retrenched first. You may depart from LIFO for a justifiable operational reason, for example where one role is essential and the other is not, but discuss the selection method during consultation and never select on grounds such as age, pregnancy or because someone once referred a dispute against you.
Step 4: Notice, severance and the final payment
Once consultation is complete and retrenchment is confirmed, give written notice of termination. A domestic worker employed for more than six months is entitled to at least four weeks' notice; one week applies in the first six months. You may pay the notice period out instead of having it worked. The detail is on our notice periods page.
The worker must also receive severance pay of at least one week's remuneration for each completed year of service, plus payment for any accrued untaken annual leave, plus wages up to the last day. See severance pay for worked examples at common wages. Finally, declare the termination to the UIF so the worker can claim unemployment benefits without delay; if the worker worked more than 24 hours a month for you, they should already be registered.
What happens if the process is skipped
A retrenched domestic worker can refer an unfair dismissal dispute to the CCMA within 30 days, free of charge. If a commissioner finds the retrenchment was not genuine or the consultation never happened, the remedies include reinstatement or compensation of up to 12 months' remuneration. The process above usually takes two to three weeks of calendar time in a household setting; it is far cheaper than defending a flawed dismissal. Read what happens at the CCMA so you know what to expect either way.
Frequently asked questions
Can a private household really be expected to follow section 189?
Yes. The Labour Relations Act does not exempt household employers from fair retrenchment procedure. The process is simply scaled down: a clear letter, one or two honest conversations, written notes, and the correct payments.
How long should the whole retrenchment process take?
There is no fixed legal period, but allow at least a week or two between the written notice and the final decision so the consultation is genuine, then the notice period (usually four weeks) on top of that. Rushing it is the most common mistake.
Can I retrench because I am emigrating?
Yes, relocation is a legitimate operational reason. You must still consult first, give proper notice and pay severance, notice pay and accrued leave. Start the process well before your departure date.
Do I have to pay severance if my worker finds another job during the notice period?
Severance pay falls away only if the worker unreasonably refuses a reasonable offer of alternative employment from you. Finding their own new job does not cancel severance for completed years of service. See our severance pay guide for the rules.
What if my worker refuses to sign the retrenchment letter?
A signature only confirms receipt, not agreement. If the worker declines to sign, note that on the letter, have a witness sign that it was handed over and explained, and keep your copy.
Can I replace a retrenched worker with someone cheaper?
That is risky. If you hire a replacement into the same role shortly after retrenching, the dismissal looks like it was not genuinely about the position being redundant, and a CCMA commissioner may find it unfair. If circumstances change, offer the job back to the retrenched worker first.