19 th October 2009

Dear Reader.

Welcome to Retrenchment Assist’s very first newsletter. When we embarked on the journey of assisting employees who are facing retrenchment either fairly or unfairly, we never could have imagined what we let ourselves in for. So many employees receive notifications of retrenchments on a daily basis and the sad news is that the status quo is not likely to improve overnight.

We aim to assist you throughout the entire process of retrenchment. We will provide you with proper legal advice on the retrenchment process, assist in the drafting of representations to help safe your job and referral to the relevant dispute resolution forum (should you have been unfairly retrenched).

With each newsletter we will be investigating the various aspects of not only retrenchments but also other forms of dismissal. We will also be discussing important decisions made by the Labour Courts of South Africa as the judgements become available. We will kick off with an outline of what exactly retrenchment means and how it should be embarked on by employers.

When an employer contemplates dismissing one or more employees for reasons based on the employer’s operational requirements, we are dealing with retrenchment. Section 213 of the Labour Relations Act (LRA) defines operational requirements to mean the economic, technological, structural or similar needs of the employer. These needs can lead to the employee’s position within the employer’s organisation becoming redundant. Retrenchment can only be effected for one of the above requirements.

The process of retrenchment is regulated by section 189 of the Labour Relations Act together with the Code of Good Practice on dismissal based on Operational Requirements, issued in terms of the LRA. The LRA and the Code stipulates in no uncertain terms that the employer must consult with the employees or their representatives, that might be affected. This consultation involves meaningful joint consensus seeking on the aspects of;

• Appropriate measures to avoid the dismissal
• Appropriate measures to minimise the number of dismissals
• Appropriate measures to change the timing of the dismissals
• Appropriate measure to mitigate the adverse effects of the dismissals
• Method of selecting the employees to be dismissed
• Severance pay

Consultation is the crux of procedural fairness – without meaningful consultation the employer’s process will be meaningless. In order to enable employees that might be effective to participate meaningfully in consultation, the employer is obliged to disclose relevant information in terms of section 189 (3). Disclosure of information is also regulated by section 16. The disclosure of information will be discussed in a later newsletter.

The Labour court has in the recent case of NUMSA v Timken SA (judgement delivered on 15 January 2009) reiterated the view of the Labour Appeal Court that the retrenchment of the employee has to be the very last resort for the employer. This means that the employer must consider all alternatives before retrenching the employee. If an alternative exist but an employee does not have the necessary skills it is expected of the employer to provide training to the employee.. It must be noted that the court does not expect of the employer to embark on the extensive training of an employee, but this duty to train is qualified to mean: additional or minimal training as per Judge Zondo in the case of Andre Johan Oostehuizen v Telkom SA Ltd (2007) ILJ 2531 (LAC):

“In my view an employer has an obligation not to dismiss an employee for operational requirements if the employer has work which such employee can perform either without any additional training or with minimal training. This is because that is a measure that can be employed to avoid the dismissal and the employer has an obligation to take appropriate measures to avoid it and employee’s dismissal for operational requirements. Such obligation particularly applies to a situation where the employer relies on the employee’s redundancy as the operational requirements ... A dismissal that could have been avoided but was not avoid is a dismissal that is without a fair reason.”

When during the course of the consultation process it becomes clear that there is no other alternative than to retrench, the employer should consult on the selection criteria (which employee to retrench) and try to reach consensus. If no consensus can be reached on the criteria to be used, section 189(7) stipulates that the criteria must be fair and objective. LIFO (last in first out) and the retention of skills are the most commonly used. There are various other criteria that can be fair and objective, like vertical and horizontal bumping, these will be discussed in more detail in newsletters to follow.
From the above it is clear that the process of retrenchment is a tricky one, needless to say one that has let to much litigation in our dispute resolution forums. Should you receive a notification of possible retrenchment, please contact us immediately. We have legal experts available to advice and assist you throughout. Contact us today!

Me. Lezanne Bouwer
General Manger: Legal Assistance

Next week: Constructive Dismissal (26th October 2009)

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 We Are Not The CCMA, Neither are affiliated to them. You may visit  the CCMA website on:
http://www.ccma.org.za/  Or contact their Call Centre 0861 16 16 16

For Further Information, Please See:

http://www.retrenchmentassist.co.za/index.php/ccma-representation/arbitration

http://www.retrenchmentassist.co.za/index.php/ccma-representation/dispute- resolution-process

http://www.retrenchmentassist.co.za/index.php/ccma-representation/conarb-process

http://www.retrenchmentassist.co.za/index.php/ccma- representation/concilliation

http://www.retrenchmentassist.co.za/index.php/ccma-representation/condonation

http://www.retrenchmentassist.co.za/index.php/ccma-representation/ccma- rules