Adhere to the law in the retrenchment process

Labour Court ordered the reinstatement, with 3.5 years’ backpay plus costs, where an employer flouted the Labour Relations Act provisions, just to cause another legal fight concerning the amount of backpay.

The legal provisions for ensuring a fair retrenchment, as contained in sections 189 and 189A of the LRA, are rather unambiguous and very explicit and, as such, no excuse exists for employers to make basic procedural mistakes. In this regard, the LRA clearly prescribes with whom the employer should understood, wisely crafted and tailored to oiling the wheels of a meaningful joint consensus-seeking process. It was the wise employer who followed them to the letter.

“Those employers who chose not to did so at the peril of a finding not only of procedural, but also substantive, unfairness”.

With specific reference to the Section 189(3) written notice, the judge viewed this as “a critical, if not the most central, ingredient of the consultation process”, and, if properly drafted, should comply with an employer’s obligation to disclose the necessary information.

This, according to the judge, together with a consultation process that is focused on “joint consensusseeking”, will contribute towards a fair retrenchment procedure. However, it is here that employers are continuously making fatal mistakes.

Firstly, employers too often make the decision to, for example, restructure and/or determine the new organisation structure and/or the selection criteria and/or who is to be retrenched, and so on, in an arbitrary, irrational and subjective manner before even starting with the consultation exercise. As in the Moodley case, too often retrenchees are given a short letter which declares an employee’s position redundant and then the employer merely wishes to follow a consulta- tion process with limited purpose, for example, to consult only on the severance pay and/or alternatives.

Employers should by now realise that it is an LRA requirement that meaningful consultation must take place before any final employer decision is made. Meaning that, in order to ensure a fair retrenchment, an employer may not, for example, decide on the new organogram or selection criteria, and so on, prior to having exhausted the consultation exercise.

Another fatal employer mistake emanates from the selection criteria used, which, as per the LRA, should preferably be agreed upon and, if not, should be fair and objective. Employers too frequently merely determine selection criteria unilaterally or, in cases where everybody needs to apply for limited jobs, use and apply selection criteria such as attributes, qualities, skills, experience and/or “sweet nature” in a subjective and dubious manner through questionable interviews.

As in the Moodley matter, the extent of the employer’s procedural irregularities contributed towards a finding that the retrenchment is also substantively unfair, namely that the reason for the retrenchment is, at best, questionable.

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