The most important section when it comes to retrenchment in South Africa is section 189 of the labour relations act which deals with all the rights and responsibilities when it comes to the retrenchment and the necessary processes involved.
Section 189
Section 189 of the Labour Relations Act allows employers and business owners to retrench employees with very strict requirements that needs to be adhered to for the retrenchment process.
What reasons can an employer use to retrench an employee?
With regards to section 189 – there are only 3 reasons that an employer can use retrenchment:
- The business is doing poorly financially – The financial grounds of a business relates to the money of the business. The business simply cannot afford to keep the employee any longer on the payroll and it has no option but to retrench.
A reason could be because of a poor economy, loss of customers – any reason that has caused the business to now struggle to survive and results in retrenchment of their employees to cut down its overheads.
Business owners must have the ability to show why retrenchment was necessary, so as to avoid blaming the economy and retrenching employees because they hated the employee or the employee committed misconduct.
The law is there to protect the employees to ensure employers are not using retrenchment as an escape route, instead of having a disciplinary hearing.
In order for the owner to justify the retrenchment process, he or she must provide specific reasons for why it is necessary.
- The business has acquired a new form of technology and it doesn’t not require the employee for the position as they have invested in technology to do the work.
Technological reasons are a new machine brought by a business owner, which now does the work of the employee therefore the employee has to be retrenched because the new machine is doing the work – there’s no need to keep the machine and the employee
In any case, it must be done in accordance with a fair process, which involves consultation with the employee.
- The business must restructure itself from an operational requirements perspective to be more profitable and more efficient.
What action can you as an employee consider:
If you’re currently going through a retrenchment, it is vital to read the retrenchment documents and find the reason provided for the retrenchment. Is it
Financial?
Structural?
Technical?
After finding out this information, you can plan your way forward.
