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Two retrenchment alternatives AngloGold Ashanti could consider

by , 13 November 2014
The City Press is reporting that AngloGold Ashanti will be retrenching a number of employees as it feels the pinch of lower gold prices and rising costs.

According to the publication, a union source close to negotiations with the company said 200 positions were affected in South Africa.

When it comes to retrenchments, South African laws urge companies to find alternatives. And there are two retrenchment alternatives AngloGold could consider.

Read on to find out what they are so you can use them too, should you find yourself in a similar position.


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Revealed: Two alternatives to retrenchment

 
According to the Labour Law for Managers Loose Leaf Service, Section 189(2)(a)(i) of the Labour Relations Act (LRA) states that you must look carefully at ways and means of avoiding retrenchment. This could include:
 
1. Another job elsewhere in the company or group; and
 
2. A lesser job with a lower package (which the employee wouldn't be obliged to accept, but you should offer).
 
Note: You could also consider offering alternative positions to employees with long service even if that means retrenching other employees who currently occupy those positions. This process is called 'bumping'. The principle behind it is it gives greater job security to employees with longer service.
 
Bear in mind that you don't necessarily have to bump if you can come up with a good reason why it doesn't make business sense to do so.

 
So what happens if you offer your employee an alternative job and he refuses to accept it?

 
If your employee unreasonably refuses an offer of alternative employment, you don't have to pay severance pay.
 
There you have it: You're legally obliged to look at ways of avoiding retrenchment. Make sure you consider these two alternatives if you find yourself in AngloGold Ashanti's shoes.
 
PS: For more information on retrenchment, check out Retrenchments: How to make sure your retrenchment process is 100% correct.

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