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Two things MTN must get right in its retrenchment process

by , 27 August 2014
The tough economy is taking its toll on companies like MTN.

The company is currently going through a huge retrenchment process that'll affect over 800 employees in managerial positions.

According to Business Tech, in its section 189 letter, MTN says it's contemplating possible dismissals due to operational requirements, based on its structural changes at various management levels.

This massive move has unions fuming and it's put sharp focus on retrenchments for other companies as well.

That's why we've decided to outline two things the mobile operator and your company must get right to ensure the retrenchment process is legally compliant.

Retrenchment is a sensitive issue and you must handle it correctly 

You must handle retrenchments correctly.

We've mentioned a number of times that with retrenchments you end your employment relationship with your employees not because they've done something wrong, but due to operational reasons.

And as labour expert, Ivan Israelstam explains here, since your employees are losing their jobs even though it's not their fault, the courts won't hesitate to protect their rights and it'll penalise you for failing to follow the correct retrenchment procedures.

That's why it's crucial you get the following two things right in your retrenchment process.

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Here are the two things you must get right when retrenching

#1: You must have a valid reason to retrench

You can't just retrench because you want to get rid of employees you don't like – that's illegal and you'll get into trouble with the courts.

A valid reason for retrenching would be if you can't afford to pay the number of employees you currently have because your business is doing badly.

There's one more thing you must get right when retrenching.

#2: You must follow a fair procedure

Following the right procedure is critical when retrenching. You can't just implement the retrenchment process as you please. You must consult extensively with the people you're retrenching or with their representatives on ways to avoid job losses, for instance.

Just remember this important point when it comes to these two things:

If you get either one or both wrong, retrenched employees can take you to the CCMA or the Labour Court. This means you could be ordered to take them back (reinstate them), with or without back pay, or to pay them compensation.

Don't take chances. Get these two things right when retrenching. It's the only way to avoid comebacks.

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