HomeHome SearchSearch MenuMenu Our productsOur products

Retrenchment myth busted: You CAN retrench employees during a Section 197 procedure

by , 09 July 2015
Some people are under the impression that if a company's being transferred or sold, employees can't be retrenched. This is untrue!

Let's say, for example, you're buying a company called The Packaging Co. You want to merge this company with a company you currently own, Jacoby Packaging.

In the merged business, you're going to end up with two receptionists and two general managers. And you don't need (nor can afford) the duplicated staff!

You're under the impression that you retrench any current The Packaging Co employees. But you can. Here's why...

You can follow Section 189 procedures at the same time as a Section 197 procedure

Just because a business is being sold or transferred to someone else (namely a Section 197 procedure), doesn't mean that retrenching (namely a Section 189 procedure) isn't allowed.
This isn't considered illegal retrenchment.
*********** Advertisement ************
Warning! Your company could be next! Don't make this retrenchment mistake. It could cost you over R1 million in compensation... 

How to retrench an employee during a Section 197 procedure

You're the employer, and you've decided that you have to retrench two employees, a receptionist and a general manager, at the same time as taking over The Packaging Co.
In order to do this, you must:
Correctly consult the affected employees (in this case, the receptionist and general manager); and
Ensure the method for selecting retrenched employees is subject to meaningful, consensus-seeking consultations.
You must also ensure you follow the correct Section 189 procedure steps to retrenching an employee. 

Vote article

Retrenchment myth busted: You CAN retrench employees during a Section 197 procedure
Note: 4.7 of 5 votes

Related articles

Related articles

Related Products