Retrenchment letters! Do you know what to include in your retrenchment letters to employees?
Last year Anglo American Platinum announced its plan to cut 6 000 jobs instead of the 14 000 it predicted. Did Anglo American Platinum issue legally correct retrenchment letters to their employees? Why did Anglo American Platinum decide to send retrenchment letters to their employees?
Should your company find itself in the same situation, it's important your company's retrenchment process is procedurally fair. Read on to discover what your employee's notice of retrenchment letter should contain to avoid landing at the Labour Court defending a costly retrenchment case.
You need to have a good reason to retrench and send your employees retrenchment letters. If you don't, your employees can take you to the Labour Court. And this means 'you could be ordered to reinstate them, with or without back pay, or to pay them compensation,' warns the Labour Law for Managers Loose Leaf Service.
That's why it's important that your employee's notice of retrenchment letter contains all the necessary requirements set out by the Labour Relations Act (LRA).
But, do you know what these are?
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Here's a checklist for the notice of retrenchment letter
The name and designation of the employee to be retrenched.
Confirmation that notice is given after a process of consultation, specifying who you consulted with. Remember, 'the bottom line is that you must consult properly and canvass all the relevant issues. If the union or the employees make representations to you during the process you must respond to them,' says the Loose Leaf.
The date on which retrenchment takes effect.
Whether or not the employee is required to work out a notice period.
The package that the employee will receive on retrenchment (such as notice pay, leave pay, severance pay, pro rata bonus and any other applicable payment).
What will happen with benefits such as pension/provident fund and medical aid if applicable?
The details of any assistance that you've agreed on for retrenched employees.
By ensuring your employee's notice of retrenchment letter has all the necessary requirements you'll avoid landing at the Labour Court for retrenching unfairly.
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