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Telkom's dilemma casts the spotlight on the importance of having proper retrenchment procedures in place

by , 26 May 2014
According to the latest news, Telkom plans to retrench around 1000 management staff and specialists by the end of July.

Following reports that the communications giant didn't follow proper retrenchment procedures, our experts have received a lot of questions about this issue.

Here are the five steps they recommend you follow to make sure you retrench properly and don't end up at the Labour Court.


Labour Law for Managers provides quick access to comprehensive and professional advice on labour legislation.

With more than 500 pages in the original binder, Labour Law for Managers covers all aspects of employee-employer relationship, down to the smallest details.

Click here for details…


Not too sure about retrenchment procedures? Follow these five steps to make sure you do it properly

Step 1: Think carefully before you start the retrenchment process

You must have a good reason to retrench. That's why you must consider things like:

  • What you want to achieve by retrenching?
  • What's the best plan to get there?

The Labour Law for Managers Loose Leaf Service has a full list of questions you need to ask yourself before you start to retrench. So be sure to check it out.

Step 2: Select the employees you want to retrench

Use fair criteria when you select employees you want to retrench.

Step 3: Consult with the relevant parties

Consult properly with all affected parties. This could be your employees or their union.

Be sincere and realise that this isn't easy for your employees. Try to find alternatives.


Your labour consultant could be wasting your money…

Don't get me wrong. Labour consultants are good to have and they definitely can help you out of an employment jam. But when it comes to employment contracts, company policies and procedures and disciplinary procedures and forms, why waste your money when you could have all of these at your fingertips, in a standard format, with your company logo on it?


Step 4: Implement the retrenchments

If you reach an agreement on all the issues, set out all the details in a written agreement.

You and the union (if you've been consulting with one) must sign it. And if you've been consulting with employees directly, they must sign the agreement if they agree on the terms.

Step 5: Decide on the severance package

You must pay at least the prescribed minimum amount of severance pay to retrenched employees.

The statutory minimum is one weeks' remuneration for every completed year of continuous service (Section 41 of the Basic Conditions of Employment Act (BCEA)).

We've just scratched the surface with these steps. Check out the Labour Law for Managers Loose Leaf Service for a breakdown of what you must do in each step.

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