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Your three burning retrenchment questions answered

by , 04 August 2014
Lately, our experts have been getting a lot of questions about retrenchments from employers.

From these questions, it's clear the current economic situation is taking its toll and these employers are forced to restructure their businesses so they can be profitable again.

If you're one of the many employers who've sent us questions about this, the good news is our experts can answer you.

Take a look at the answers below so you can retrench properly and avoid disputes.

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Here are the answers to your retrenchment questions

Question #1: 'I feel bad about having to retrench some of my staff, are there any alternatives I can explore?'

Yes. You have to look for alternatives to retrenchment.

In fact, Section 189 (2) (a) (i) of the Labour Relations Act compels you to look carefully at ways and means of avoiding retrenchment.

This could include finding another job elsewhere in your company for your employee or giving your employee a lesser job with a lower package.

Question #2: 'What's consultation and what should I consult about?'

According to the experts behind the Labour Law for Managers Loose Leaf Service, consultation is the discussion with potential retrenches (employees that you'll be retrenching) or their representatives on the proposed retrenchments.

You must consult about:

  • Ways to avoid retrenching.
  • How to keep the number of retrenchments as low as possible.
  • Ways to mitigate the hardships caused to employees who are retrenched.
  • How you're going to select employees to be retrenched.
  • What you'll pay retrenched employees (severance pay).

Remember that consultation must be meaningful and aim to find ways to avoid retrenchments. Our courts have regularly said sham consultations aren't good enough – you can't simply go through the motions.

Question #3: 'I know that I must consult when it comes to retrenchments. I just want to know when I should start consulting?'

You must start consulting when you contemplate retrenching. The Labour Court has said this means when retrenchments are reasonably foreseeable.

There you have it. We hope these answers have shed some light on retrenchments. We also hope they'll help you retrench properly and avoid disputes.

If you have more questions on retrenchments, ask our experts at the Labour & HR Club.

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