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Disputes about retrenchments: Here's what you NEED to know

by , 14 January 2014
You must be very cautious when dealing with retrenchments. One wrong move could land you at the CCMA or Labour Court. Read on to find out more on disputes about retrenchments and what you can do to avoid these disputes.

Handling retrenchments incorrectly can easily lead to labour disputes.

In fact, last year we reported that CCMA cases involving retrenchment increased in the first four months of 2013 and were considerably ahead of the number referred to the CCMA in the same period in 2012.

Don't become a statistic!

Here's what you MUST know when it comes to disputes about retrenchments

If your employee is unhappy about his retrenchment or his severance pay, he can refer a dispute to the CCMA for conciliation. If the dispute isn't resolved at conciliation, then there are the following possibilities:

#1: If the dispute is only about severance pay, the CCMA must refer it for arbitration.

If your employee is also disputing the fairness of the retrenchment then the Labour Court can also consider the issue of severance pay at the same time.

#2: 'If the dispute is about alleged unfair retrenchment, it must be referred to the Labour Court by way of a statement of case,' says the Labour Law for Managers Loose Leaf Service.

If you receive a statement of case, you'll need to file a reply within two weeks. You must take professional advice as soon as you receive a statement of case.

#3: If you retrenched only one employee, that employee has the option to refer a dispute for arbitration by the CCMA after conciliation fails instead of going to the Labour Court.

Is there a way to avoid disputes related to retrenchments?


You've got to have a fair and valid reason to retrench and you've got to follow fair procedure. If you get both right; the CCMA will see your retrenchment as substantively and procedurally fair.

But if you get either one or both wrong, you'll be at risk. Retrenched employees can take you to the CCMA or the Labour Court.

You could be ordered to take them back (reinstate them), with or without back pay, or to pay them compensation.

To avoid disputes related to retrenchments, always start with the reason and make sure it's fair and valid. And follow a fair procedure.

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