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Retrenching? Do these five things to reduce potential problems

by , 28 August 2014
You must deal with the retrenchment process properly.

The reasons?

The nature of this dismissal makes things tough for you from the start.

There's bound to be some resistance when you dismiss employees for operational reasons and not because they've done something wrong. Your employees and their representatives will scrutinise your every move and WILL challenge you if they believe you're not implementing retrenchment in a legal manner.

So how do you reduce potential problems?

Here are five things you can do to ensure your retrenchment process is above board.

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Warning!  Your company could be next! Don't make this retrenchment mistake. It could cost you over R1 million in compensation...

Discover how to avoid making the same horrific mistake Telkom, Sibanye Gold and Amplats made when retrenching their employees.


Minimise potential problems during the retrenchment process by doing these five things

#1: Make sure you follow the retrenchment process to the letter according to Sections 189 and 189A of the Labour Relations Act 66 of 1995.

#2: Know the requirements of a retrenchment process. Some of the requirements include:

#3: Have valid reasons for retrenching. You must also explain these reasons to the employees.

Remember, you can't retrench employees on a whim or to avoid dealing with performance or behaviour issues, you must explain reasons to your employees.

#4: Pay a basic, minimum retrenchment package.

The Practical Guide to Human Resources Management says you must calculate the package according to one week's pay for every completed year of service and take into account the value of any outstanding leave. In addition, you must give all employees you're retrenching a formal, paid notice of termination of service.

#5: Pay out pension and provident funds according to the scheme rules where applicable.

The bottom line: Retrenchment can result in labour disputes if you fail to implement them in a legal manner. Reduce potential problems by doing these five things.

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