More details on the scary reality of retrenchments.
What is a retrenchment?
Retrenchment is a dismissal due to no fault of the employee, it is a process whereby the employer reviews its business needs in order to increase profits or limit losses.
The reasons for the retrenchment process?
An employer may retrench employees for operational requirements. Operational requirements are based on the following business needs:
1. economical requirements;
2. technological requirements;
3. structural or similar needs of an employer.
Retrenchments should always be considered as a last resort. When the courts consider whether the retrench was fair, it looks at whether there was a real reason; and whether it was unavoidable.
Fair procedure?
A consultation process with the affected employees or their representatives must take place. This process starts once an employer issues a written notice inviting the employees to consult and disclosing all the necessary information for such consultation.
The notice has to provide the employee with certain prescribed information to allow the parties to engage in a consensus-seeking process. Your attorney can advise you on this process as it is different for each situation and should be evaluated on a case by case basis.
The employer must select the employees to be dismissed based on a selection criterion agreed with the consulting employees or selection criteria that is fair and objective.
After the consultation process has been exhausted, the employer may make its decision to retrench, and then issue a notice of retrenchment to the affected employees. This process is slightly different for employers employing more than 50 employees.
Unfairly retrenched?
An employee that feels s/he has been unfairly retrenched may refer the dispute to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) or a bargaining council. The employee must refer a dispute to the CCMA or bargaining council within 30 (thirty) days from date of retrenchment.
An employee may claim that the employer:
1. reinstates him/her (with or without back pay);
2. re-employs him/her, either in the work in which s/he was employed before the
retrenchment or in another reasonably suitable work (without back pay); or
3. pays compensation to him/her.
If the dispute is not resolved at conciliation, the employee may refer the dispute to the Labour Court.
If you require more details on retrenchment proceedings, please feel free to contact Xander Naudé, from Naude Attorneys and he will assist you with the necessary information - email: xander@naudeattorneys.com
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