Retrenchments: All you need to know
UNLIKE dismissals due to misconduct or poor performance, dismissals (retrenchments) for “operational requirements” are “no fault dismissals”, which means the employee didn’t do anything wrong.
These happen because of the economical, technological, structural or similar needs of the employer.
New technology makes certain jobs no longer necessary, and traditional workers are retrenched because of the shift in technology. Section 189(1) of the Labour Relations Act deals specifically with the consultation process when it comes to no fault dismissals. The employer must consult with:
the person they are obliged to consult with in terms of a collective agreement;
if there is no collective agreement, a workplace forum and any registered trade union whose members are likely to be affected by the proposed dismissals;
if there is no such trade union, the employees likely to be affected by the proposed dismissals or the representatives they nominated.
So, the first step in the process is receiving a notification of retrenchment.
This will include all the relevant details, including the reason for retrenchment, number of employees, severance pay, etc.
Next, all affected employees will get a chance to give feedback and consult with the employer about the retrenchments.
This can be in writing or in person. Once criteria has been decided on how they will decide who to retrench, the employees who have been selected will get a notice of termination.
Sometimes, employers use the excuse of “operational requirements” when they just want to get rid of an employee. Employers who do this could find themselves facing penalties from the CCMA if the employee decides to take legal action.
The purpose of the Section 189 process is to ensure the decision to retrench is properly and genuinely justified by operational requirements. Tips
A Section 189 process comes from the Act, and refers to the consultation that must take place before retrenchments can happen.
Dismissals for operational requirements are “no fault” dismissals.
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This is only basic advice and cannot be relied on solely. Names have been changed to protect identity.