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Employers are still getting retrenchments wrong! Here's how to avoid being one of them

by , 25 August 2014
Retrenchment is a process where you end your employment relationship with your staff for operational reasons. For example, your business isn't doing well and you can't afford to keep on more employees.

While the retrenchment process has been around for many years, employers continue to get it wrong and end up paying a very heavy price with the CCMA. This is according to top labour expert, Ivan Israelstam.

But where do these employers go wrong?

Keep reading to find out so you can ensure your retrenchments are always fair and legally compliant.

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Where employers go wrong when it comes to retrenchments

According to Israelstam, most employers don't follow the correct procedure when it comes to retrenchments.

He says there are a number of possible reasons for this non-compliance. This includes the fact that:

  • Employers know the law, but don't believe it's applicable to them.
  • The operational circumstances are so dire that the pressure distracts employers from the legal aspects of the retrenchment.
  • They believe that, if there's a good reason for retrenchment, the court will be lenient on the procedural side of the case.
  • Employers misuse retrenchments to get rid of poor performers. Since their priority is getting rid of undesirable employees, they don't take the legal requirements into account.


Never make mistakes when retrenching

Make sure you steer clear of these pitfalls. If you don't, you'll land at the CCMA or Labour Court and you'll lose your case and have to pay compensation to your employees.

According to Israelstam, the courts see retrenchments as no-fault terminations. This means your employee is losing his job through no fault of his own. In addition, the unemployment rate in South Africa is extremely high and it's very difficult for retrenchees to find new jobs.

Israelstam says it's for these reasons that the courts won't hesitate to protect the rights of the people you're retrenching and it'll penalise you for failing to follow the correct retrenchment procedures.

You've been warned.

Always follow the correct retrenchment procedures

When it comes to retrenchments, always follow the correct procedure. This includes having a valid reason to retrench and consulting with relevant parties.

We recommend you checkout the Labour Law for Managers Loose Leaf Service. It contains a step-by-step procedure you must follow when you retrench.

There you have it: Don't be one of the many employers who continue to get retrenchments wrong.

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