Basic Guide For A Fair Retrenchment Procedure

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Basic Guide For A Fair Retrenchment Procedure

Basic Guide For A Fair Retrenchment Procedure

Most employers keep getting retrenchment processes wrong which then leads to the employer paying hefty costs trying to settle the dispute at the CCMA. What is important in retrenchment is that the employer must fulfil its onus by proving that the retrenchment was fair in all aspects.

Fair procedure for retrenchment:

  • When the employer contemplates dismissing one or more employees for reasons based on operational requirement of the job, the employer must consult with the employees who are likely/potentially to be affected by the retrenchment, or their workplace forum, registered trade union or elected representatives, or any person elected in terms of a collective agreement.
  • The decision for the employer to consider retrenchment must be rational and valid.
  • NB: “Potentially affected employees” are not only those employees who may have already been earmarked for retrenchment.
  • The employer must issue a written notice inviting the consulting employees to consult and disclose in writing all relevant information pertaining the retrenchment.
  • The employer and consulting employees must engage and consult in good faith with an intention to seek consensus on certain matters outlined in the proposed retrenchment.
  • The consultation between the parties must seek to avoid retrenchment or mitigate the impact of such retrenchments.
  • The employer must allow the consulting employees to make representations about the matters contained in the notice and other matters relating to the proposed retrenchment.
  • The employer must respond to the consulting employees’ representations. If the employer disagrees with the consulting employees, it must state the reasons for disagreeing with them.
  • The employer must select the employees to be dismissed based on a selection criteria agreed with the consulting employees or selection criteria that is fair and objective.
  • The Labour Relations Act does not prescribe a time period during which the consultation should be completed.
  • After the consultation process has been exhausted, the employer may make its decision to retrench, and then issue a notice of retrenchment to the affected employees.




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