It is possible that you, or someone you know, will face retrenchment sometime in your life. A retrenchment is a no-fault dismissal, in other words, it is not the workers' fault that they are being dismissed. Retrenchments often occur when the employer makes operational changes such as downsizing.
When retrenched, you will be offered compensation. This is called severance pay, and is calculated at a minimum of one week’s salary for every completed year of work. In other words: if you’ve worked for one year and eight months, you will only receive one week’s worth of pay.
The employer needs to provide employees with a written notice to start the retrenchment process. This notice needs to include the following information:
- The reasons for the proposed retrenchment.
- Any alternative options the employer has considered before deciding on retrenchment.
- The number of employees that will be affected and the job categories in which they are employed.
- The selection criteria that will be used.
- When the dismissals are likely to take place.
- The proposed severance pay.
- Any additional assistance the employer proposes to offer the employees likely to be dismissed.
- Whether the affected employees can be re-employed at a later stage.
- The number of current employees.
- The number of employees that were dismissed due to operational requirements in the preceding 12 months.
During the retrenchment consultation process, employees or their representatives may contribute suggestions on how to minimise the number of people being retrenched. Choosing who has to go needs to be based on selection criteria that are considered fair by the Labour Relations Act. This includes last in, first out. Nobody may be selected for retrenchment based on gender, age, race, sexual preference or any external factor. If the employee is offered an alternative position which is similar to his current job, but he turns it down, the employer may not need to pay out the severance package.
Retrenchment is a serious process, and it may not always be possible for you as employee to ensure that all the requirements set out in section 189 of the Labour Relations Act are met. It is always advisable to call Scorpion as soon as you hear that you are being retrenched so we can take the lead.