By Charlene Phillips
Durban Branch
A dismissal for operational requirements is, in terms of the Labour Relations Act 66 of 1995 a dismissal of employees based on an employer's economic, technological, structural or other similar reasons. It is therefore NOT a dismissal based on the need to get rid of 'dead wood' or problem employees. It is far better, and easier, to address the issues that you actually face rather than embark on a retrenchment process as it is not an easy way to get rid of people, and it requires severance pay to be paid. So, if you have 'dead wood' pick up on your performance process, you will find it a lot easier than you think! It is recommended that you obtain our advice in this regard.
In Janse van Rensburg v Super Group Trading (Pty) Ltd the Labour Court held that the applicant retrenchment was substantively and procedurally unfair due to the underlying reason for the applicant's retrenchment. The applicant's retrenchment was influenced by the fact that business associates had expressed reservations about continuing to do business with him due to his rude and aggressive attitude.
Although, Molahlehi J, accepted that there were genuine operational requirements that necessitated the right-sizing exercise, the Court held that the retrenchment was unfair due to the decision to retrench the applicant was made before the consultation process had started.
The applicant was awarded compensation equal to 12 months remuneration.
Whether you're retrenching one employee or many, you need to have a good reason to retrench and do it properly. Unfortunately, you cannot just retrench your staff. You need to consult with the potential retrenches or their representatives. Otherwise you'll end up with unhappy employees and in CCMA! Defending a retrenchment case in CCMA or Court will cost you time and money you may even end up worse-off despite the savings you achieved by reducing staff.
Which of these questions do you need answered?
- When can you retrench staff?
- What must you think about before you start retrenching?
- What must be included in your Section 189(3) notice?
- What must you include in your retrenchment letter?
- How do you calculate how much severance pay to pay?
LabourNet has the answers for you. Our qualified Consultants will assist, advise and guide you through the process from the very start. This includes drafting the section 189(3) notice, assisting you with the consultation process and drafting the retrenchment agreements.
Not yet a LabourNet client, but would like to know more about our service and products, visit our LabourNet website or send a mail sales and they will contact you to set up an appointment.
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Disclaimer
The information published in this article or newsletter is of general nature and should not be used without obtaining specific advise as to its application in your business or under your specific circumstances. LabourNet will accept no liability if the information is used without first obtaining specific advise from one of our consultants