Retrenchment: Keep your options open
Know your rights and you will not be bullied into damaging actions
Retrenchment looms, and panic has set in. In the turmoil, there is one rule that the “re-trenchee” has to follow: Do not sign anything, irrespective of the pressure the employer may exert.
Bridgette Beetge-Magnus, of East London’s legal firm Bax Kaplan Russell Incorporated, advises affected employees not to rush into signing a voluntary separation agreement because they often contain no financial benefit to them, and will ensure the end of their employment.
Once signed, the deal is done, and often employers sneak “restraints” into these agreements, which trip up the unwary.
Irrespective of all the wellknown retrenchment-warning signs, notification of retrenchment is bound to shock the common sense out of most people. This may lead to hasty and ill-informed short-term decisions that could have lasting consequences.
“Employers need advice pertaining to retrenchment matters, and an understanding of the realities of retrenchment is necessary. Retrenchment may be initiated to affect savings in a company and, contrary to populist belief, to increase profits. In light of the volatility of the economy and labour market, all employees should invest in retrenchment cover, which covers debts for up to six months, if retrenchment hits,” said Beetge-Magnus.
Consulting a professional should ensure that employees get the fairest deal available to them. There are rules employees can use to their benefit. However, many employers go into retrenchment schemes without sticking to these rules, either through ignorance or self-interest, leaving the “re-trenchee” at a disadvantage.
Retrenched employees should be able to stand their ground and fight for what is right, but that is difficult if they do not know their rights, which is where a professional comes in.
“All retrenchments must be procedurally and substantively fair. In terms of Section 189 and Section 189A of the Labour Relations Act (‘the Act’), the employer must consult with all stakeholders who will ultimately be affected by the retrenchment.
“The employer is also obliged to provide the employees with certain relevant information in terms of s16 of the Act. During the consultation, the employer and the consulting parties must attempt to reach consensus on items listed in section 189 and section 189A of the Act.”
The employer is limited to three reasons for retrenchment, albeit broad.
An employer may only retrench for technological, structural or economic reasons. An employer may not make use of the retrenchment process to “cleanse” the workplace of people it deems troublesome, or to “rid” itself of union members.
Retrenchment is a “no-fault” process and as such an employee’s disciplinary record should not be considered.
During consultation, employees are encouraged to consult openly and to negotiate fearlessly. Employees will firstly be requested to make submissions on how to avoid the retrenchments or how to mitigate its adverse effects.
At this stage, employees should suggest the concept of “bumping” where employees are moved to different departments where their skills may be required. A further suggestion should be that the selection criteria be based on skills retention rather than “last in, first out”.
In the event that retrenchment is inevitable, employees must negotiate better terms for the termination of employment. The severance package as stated in the Basic Conditions of Employment Act, is just that, the basic minimum that the employer may offer.
Employees are fully entitled to negotiate a higher severance package. Furthermore, employees can negotiate for payment in lieu of the notice period which would allow the employee to immediately start the job hunt as their attendance at work during the notice period would not be required.
In terms of section 189 and section 189A, the employer is obliged to re-employ retrenched employees during the 12 months immediately following the retrenchment, should the need to increase staff arise.
Many employers are nonchalant with regards to this provision and often employ “new” employees. This is an unfair labour practice.