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RETRENCHMENT: ROCKY ROAD FOR EMPLOYERS
As far as retrenchment is concerned, not much has changed for employers who employ 50 or fewer employees (See the Labourwise article of May 2002 on www.labourwise.co.za). However, employers employing more than 50 employees and considering reducing their staff, face a more challenging process. This article concentrates on the practical implications of the relevant amendments to the Labour Relations Act of 1995.
The requirements regarding an invitation to consult, joint consensus seeking, etc. have to be adhered to irrespective of the size of the organization.
An employer who employs between 51 and 200 employees and who is contemplating dismissing 10 or more of these employees due to operational requirements, i.e. retrenchment, must be aware of the additional provisions introduced. (If the employer employs more than 200 employees, the number of persons considered for retrenchment changes progressively in relation to the size of the organisation).
Either of the parties can request the CCMA to appoint of a facilitator. At least 60 days must elapse after the notice from the employer (inviting consultation) to allow for consultation and facilitation, unless the parties agree to vary the timeframe. During this period the prescribed procedures have to be followed. The employer may also not give notice of termination of employment during this period. The Labour Court may be approached to provide relief on an urgent basis if the prescribed procedure has not been followed. A notice to strike may only be given during this period if the employer has prematurely given notice of termination of employment.
After the 60 days have elapsed, the employer may give notice of termination of employment. The employees or their representatives are free to give notice of a strike. The employer may respond with a lock out. A dispute about the fairness of the reason for the retrenchment may be referred to the Labour Court for arbitration, but then the employees may not call for strike action.
If a facilitator has not been appointed, the situation is slightly different within the 60 day timeframe: A period of at least 30 days must elapse after the invitation for consultation from the employer. If no consensus has been reached the matter may be referred to the CCMA or relevant Bargaining Council. At least a further 30 days have to elapse before the employees may give notice of a strike or the employer can give notice of termination of employment.
There are some interesting provisions regarding the powers of the Labour Court, but those are not discussed in this article.
The amendments should have the effect of encouraging a joint consensus-seeking approach and preventing employers from simply relying on process in order to achieve the objective of reducing staff complement.
It is obvious that the amendments are fraught with technicalities. Employers are therefore advised to seek professional advice before embarking on a retrenchment process.