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Retrenching? Use these six tips to minimise potential retrenchment problems

by , 13 December 2013
In today's tough economic climate, there's an increasing risk you'll have to retrench staff. Since this isn't an easy process, use these six tips to navigate through this tough emotional storm without risk to your business.

The law recognises that your employee isn't at fault during retrenchments. That's why it's important to treat your affected employees respectfully.

This is just one way to help reduce potential problems during the retrenchment process. Here are some others…

Six tips you can use to reduce retrenchment problems

The Practical Guide to Human Resource Management urges you to remember the following to minimise potential problems during the retrenchment process:

#1: Make sure you follow the retrenchment process to the letter.

#2: Know the requirements of the legislated retrenchment process. This means you must explore all alternatives to retrenchment before starting the retrenchment process.

#3: Consult with representative unions and affected employees from the start of the retrenchment process. This is so you can try to agree on the following issues:

  • Appropriate measures to avoid retrenchments,
  • Opportunities to minimise the number of retrenchments
  • Opportunities to change the timing of the retrenchments and to decrease any adverse effects of the retrenchments.
  • Give the consulting parties the opportunity to make representations about any matter relating to the proposed retrenchments.

#4: Have valid reasons for retrenching employees. You must explain these reasons to your employees. You can't retrench employees on a whim or to avoid dealing with performance or behaviour issues. You must explain reasons to your employees.

#5: Pay a basic, minimum retrenchment package calculated according to one week's pay for every completed year of service plus the value of any outstanding leave. In addition, you must give all retrenched employees a formal, paid notice of termination of service according to the following scale:

Period of employment:

  • Up to 6 months (1 week notice period required)
  • 6 to12 months (2 weeks notice period required)
  • More than 12 months (4 weeks notice period required)

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

Remember, retrenchment is a dismissal for operational reasons and is classified as a no-fault dismissal. This means your employee isn't accountable for his current circumstances.

That's why there's an increased burden on you to ensure a fair and proper process during retrenchments. Use these tips to do just that, so you can minimise potential retrenchment problems.

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