We'll guide you through a Retrenchment Procedure

Labour Law Experts will help guide you as an employer through the retrenchment procedure

Retrenchments refer to the forced termination of employees by a business or company, usually due to organisational restructure, sale of the business and so forth.

Today, retrenchment has become a reality for many businesses or companies, both large and small. Although this is a common procedure, few businesses or companies deal with it on a daily basis. Because of this, employers are not always knowledgeable on the retrenchment procedure and this is why many seek the help of a legal professional when it comes to retrenchments.

Whilst retrenchment is fully legal, the reasons for retrenching an employee must be fair and the procedure must be followed fairly and correctly to meet the demands of the South African Labour Law. According to the Labour Law, for example, retrenchment cannot be used as an alternative to a performance management process.

To retrench an employee/employees, substantive criteria needs to prevail. This includes economical, technological and structural criteria. To ensure that the process is completely fair, communication and consultation between the employer and the employees impacted by the retrenchment process should be maintained the entire time. Communication should be initiated as soon as the decision to embark on a retrenchment process has been made, allowing both parties to engage in constructive discussions about the retrenchment process. This allows for employees to receive full consultation and have the opportunity to table alternative proposals to the retrenchment process and its likely outcomes.

There are major consequences when a company proceeds with retrenchments without following the correct procedure. If an employee feels that he/she was dismissed unfairly, your company may be taken by the affected employee to the CCMA or Labour Court, which can lead to several possible outcomes, including employee reinstatement. The retrenchment procedure is uncomfortable and hard on all parties involved, therefore it is advisable to ensure that you fully understand the laws around dismissals before starting the process. If you follow the procedure correctly, you do not have to fear a CCMA hearing.

The team at Labour Law Experts are knowledgeable on the retrenchment procedure, and we can provide guidance and counsel for our clients throughout the entire process. We are also able to handle all retrenchment procedures on behalf of clients that wish us to do so. We also provide our clients with all the legal documentation required for the retrenchment process. These documents are kept up to date in accordance to the latest rules and regulations at all times.