Facing the threat of retrenchment? Here’s what you should know.

Since the beginning of the lockdown, we’ve seen reports on the damaging impact of the COVID-19 pandemic on businesses throughout the country. As they struggle to make ends meet, many businesses are considering retrenching a number of their employees.

When it comes to retrenchment, the first thing you need to know is that it should be a measure of last resort. An employer should exhaust all alternatives before they consider reducing the number of employees. This is the message of the Labour Relations Act of 1995 (“LRA”) which has also been echoed by the government in providing relief measures to businesses to help keep their doors open.

However, some businesses may have reached the end of their ropes and have no choice but to consider retrenchment. In this case, the LRA sets out the rules and procedures for fair retrenchment.

According to section 189 of the LRA, an employer considering retrenchment must send a written notice inviting the affected employees and their elected representatives for consultation. The notice should contain all the information relevant to the retrenchment, including the reasons for the retrenchment; the alternatives that were considered, and the reasons for rejecting those alternatives.

The employer should then consult with the affected employees to try and reach an understanding on suitable measures to avoid the retrenchment entirely, or alternatively, to delay the retrenchment; reduce the number of employees to be retrenched, and to lessen the negative effects of the retrenchment. The parties should also try to reach consensus on the method of selecting which employees will be retrenched and their severance pay. As part of this consultation, the affected employees should be given an opportunity to makerepresentations, which the employer must consider and respond to.

An employer may only issue a notice of retrenchment to affected employees after exhausting the consultation process.

Without this due process, a retrenchment could be considered unfair. If you believe that you have been unfairly retrenched, you can refer a dispute to the CCMA within 30 days of the retrenchment.