Things in South Africa have been tough over the past year, with a number of big companies retrenching staff. Retrenchments happen for a number of reasons that fall under ‘operational requirements’, including things like new technology, restructuring or simply economic needs because the business is doing poorly. The Labour Relations Act 66 of 1995 (LRA) - specifically sections 189 and 189A - sets out the requirements for retrenchment in South Africa. Employers cannot achieve a fair retrenchment process without following the requirements of the LRA. One of these requirements is a ‘notice to consult’. If you’ve received one of these, here’s what you need to know.

Scorpion Legal Protection’s advice

Consultation is an important part of the retrenchment process, and if the employer fails to consult with employees on retrenchment, it could be ruled a case of ‘unfair retrenchment’ if the employee takes the employer to the CCMA. The purpose of consultation is to enable the parties – employer and employee – to go through a problem-solving exercise in an attempt to reach an agreement on appropriate measures to avoid dismissal or to minimise the number of dismissals and lessen the effect of the dismissals by avoiding retrenchments). So if your employer is going through retrenchment procedures, it’s essential that they give you notice.

This is the ‘notice to consult’, and it must be in writing and contain the necessary information for the consulting employees to make representations at the consultation. It should include the number of employees who were dismissed due to operational requirements in the preceding 12 months, the reasons for the proposed retrenchment, as well as what alternatives to retrenchment – if any – the employer considered and why none of these were selected. It should also detail things like how many employees will be affected, what criteria were used to select them, when the retrenchment is likely to take place, what the severance pay will be and what assistance the employer proposes to give to those who are retrenched as well as the possibility of future re-employment. If you feel that the information on the notice to consult is not sufficient, you can request that the employer disclose more information, for example, if the reason for retrenchment is because the business needs to cut costs, employees can ask the employer to provide their audited financial statements to support their position that the retrenchment is necessary in terms of cutting costs.

Tips:

• Employers must carry out consultations with employees according to the Labour Relations Act.
• If you feel that you’ve been unfairly retrenched, you can refer your dispute to the CCMA or bargaining council within 30 days from the date of retrenchment.

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* This is only basic advice and cannot be relied on solely. Names have been changed to protect identity.