What exactly is retrenchment?
Retrenchments are a type of termination from your position. It’s crucial to understand that you are not being fired, proving that you are not to blame for this. It typically indicates that a firm has examined its operational demands and commercial requirements and has determined that, in order to continue, it must cut the number of employees in order to boost earnings or stem additional losses.
Naturally, the procedure is not as straightforward as just alerting a worker of their retrenchment and providing them with a month’s notice. To guarantee that labor rules are not breached and that rights are not violated, the employer must, among other things, provide justifications for the layoffs and follow the legal process.
Your legal rights in South Africa and a fair retrenchment procedure.
As was previously indicated, getting laid off doesn’t only entail your company giving you notice. According to section 189 of the Labour Relations Act in South Africa, employers are not permitted to fire employees without first following due procedure. Failure to do so might result in legal trouble for the employer (more on this later in the feature).
1. Accept an invitation to attend a consultation.
As soon as an employer contemplates retrenchments, employees must be informed about the consultation. This type of information might be quite disturbing, but keep in mind that you will have the chance to argue your position and even provide potential solutions.
2. Receive written notice of a retrenchment
If retrenchment is regrettably necessary due to business needs, the employer is required to give the employee a Notification of Retrenchment. Additionally, the employer is required to document the grounds for the layoff, the reasons why the alternatives that were explored during the consultation aren’t workable, the number of employees who will be impacted, and how they were chosen. The severance compensation, any further help the business may provide, and a statement about whether or not the employee might be rehired in the future must also be included in this communication. The employer must provide persons impacted a chance to reply after sending this notification.
Get a notice of termination.
Naturally, this is necessary to let the employee know that the working relationship will stop and to specify the employee’s final day of employment with the organization. Again, this sort of letter might cause worry and uncertainty even though you may have had some time to come to terms with the retrenchment process. If you require assistance in processing your feelings, make sure to speak with a spouse or close friend.
Legal consequences for unfair retrenchments.
It’s critical to keep in mind that the law safeguards your rights as an employee. Therefore, you probably have a case for unfair dismissal if you believe that you were the victim of an unjust retrenchment. Please read our Basic Legal Advice on Handling Unfair Rejections. If so, you have 30 days following the layoff to contact the CCMA or a Bargaining Council. The employee has the option to take the disagreement to the Labour Court if mediation at this level is unsuccessful. The Labour Court may order the employer to reinstate the employee or grant the employee compensation in the event that the lawful retrenchment process was not followed.
The compensation sum might be as much as 24 months’ salary in cases where the layoff was motivated by discrimination of any kind (for example, because of someone’s color, religion, gender, sexual orientation, etc.).
There have also been instances where bosses have attempted to use the sale of the company to a larger organization as justification for layoffs. Even in this situation, the procedure is still relevant and required by law.
