At certain periods of a company’s existence, it may be placed in a situation where it has to ‘release’ employees in order to sustain itself, or to create financial growth for the company.

Should an employee or an employer find themselves in an inevitable retrenchment process, certain procedures must to be adhered to in order for the procedure to be deemed legal.

Section 189 of the Labour Relations Act (“LRA”) allows employers to dismiss employees for operational requirements (dependant on compliance – we advise approaching with caution and obtaining legal advice, first).

The aforesaid further provides that, before retrenching the employee, the employers must consult any person whom the employer is required to consult in terms of any collective agreement that may be in force.

During the consultation process the employer must attempt to reach an agreement on any of the following:

  1. avoiding the dismissals (examples could include adjusting working hours, eliminating temporary labour, eliminating overtime, offering early retirement);
  2. minimising the number of dismissals;
  3. the timing of dismissals;
  4. ways to lessen the effects of the retrenchment;
  5. the method for selecting the employees to be dismissed; and
  6. severance payments.

The employer needs to ensure that there is compliance with the aforesaid consultations with the effected party, any non-compliance with Section 189 of the Labour Relations Act would render the proposed retrenchment invalid.

Should you find yourself at your workplace facing retrenchment or should you be an employer wishing to initiate retrenchment procedures, and would enjoy seeking assistance as to your legal options regarding such a procedure, our office is available to provide you with the assistance you require.