The lockdown has affected businesses across the country, and many employers are considering retrenchment because with their businesses unable to bring in money, there is not enough money to pay their workers.
Until we are advised otherwise by our government, the Covid-19 (coronavirus) crisis does not give employers the right to skip the normal rules and procedures for retrenchment as set out in section 189 of the Labour Relations Act and just retrench employees without due process. If they do, employers could face unfair dismissal claims. Employees can still refer their unfair dismissal disputes, including retrenchments for operational requirements, to the CCMA. By law, employers must follow the steps of the retrenchment process and make sure that any workers who are retrenched receive severance pay and any other monies owed to them, as well as their UI19 documentation so they can start the process of claiming from the Unemployment Insurance Fund (UIF).
According to the LRA, the basic process for retrenchment includes consultation with employees, notice that they may be retrenched along with details like reasons for retrenchment, what alternatives were considered, severance pay, etc, an opportunity for feedback from workers, criteria for selecting the employees who are going to be retrenched and, finally, notice of termination. The requirements regarding severance pay are set out in section 41 of the Basic Conditions of Employment Act (BCEA) – an employer must pay an employee who has been dismissed for operational requirements “severance pay equal to at least one week’s remuneration for each completed year of service with that employer”.
Tips:
- Lockdown is not an excuse for employers to skip the legal processes required by law in order to retrench employees.
Source: CCMA Info Sheet: Retrenchment in terms of s189A (Labour Relations Act)
Section 41, Basic Conditions of Employment Act (No 75 of 1997)
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* This is only basic advice and cannot be relied on solely. The information is correct at the time of being sent to publishing. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.