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Retrenchment letters could land you in trouble at the CCMA if you don't get it right!

by , 26 October 2016
Retrenchment letters could land you in trouble at the CCMA if you don't get it right!Retrenchment letters are a hot topic at the CCMA right now! The CCMA says cases involving retrenchment increased in the first four months of this year and were considerably ahead of the number referred to the CCMA in the previous period. If your company's planning to retrench, it's crucial that you ensure your employee's notice of retrenchment letter contains all the required details. One wrong move could land you at the CCMA or Labour Court. Read on to find out what these details are...

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According to the BusinessReport, the director of the CCMA, Nerine Kahn said 'the recent sharp increase in cases before the CCMA was an early warning indicator that the economy was heading for extremely tough times.'

Kahn was addressing the Department of Labour about the 25% increase in the CCMA's case workload over the past five years. Last year about 160 000 cases were heard by the CCMA.

'This translates to over 13 000 cases a month or 3 333 cases a week or 667 cases each working day,' Kahn said.

While Kahn noted that a tough economy leads to increased retrenchments and, this doesn't mean you mustn't stick to the law when carrying out retrenchments and send retrenchment letters in your workplace. If you overlook this area, you risk landing up at the Labour Court for retrenching unfairly.

'With the amount of cases before the CCMA already, joining that long list is something you want to avoid,' warns the Labour Law for Managers Loose Leaf Service.

Here's what your employee's notice of retrenchment letter should contain:

#1: The name and designation of the employee to be retrenched.

#2: Confirmation that notice is given after a process of consultation, specifying who you consulted with.

#3: The date on which retrenchment takes effect.

#4: Whether or not the employee is required to work out a notice period.

#5: The package that your employee will receive on retrenchment (such as notice pay, leave pay, severance pay, pro rata bonus and any other applicable payment).

#6: What will happen with benefits such as pension or provident fund and medical aid if applicable?

#7: The details of any assistance that you've agreed on for retrenched employees.

Avoid landing up at the CCMA for implementing retrenchments unfairly. Ensure your employee's notice of retrenchment letter contains all the necessary requirements.

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