This year alone, the South African economy lost 75,000 jobs (according to Statistics South Africa’s latest quarterly Labour Force Survey) as companies retrenched workers or simply chose not to fill empty posts.
Very few of us are safe from the risk of losing our jobs – whether you work in an office, a mine or a factory, and whether you work for a big company or a small business. For that reason, it is essential for all employees to understand their legal rights around retrenchment.
In South Africa, you are protected by a progressive piece of legislation called the Labour Relations Act. According to this law, your employer is not allowed to retrench you without reason, without consultation and without following a clearly defined process.
Companies have to show that they are retrenching for a good reason under our labour law. South Africa law allows employers to retrench for three reasons:
• Economic: the company cannot afford all the workers on the payroll.
• Structural: a change in the company structure has made certain positions redundant – for example, a branch office has been shut down or two departments have merged.
• Technological: technology such as new machines or computers have made certain jobs redundant.
The retrenchment process
Before retrenchments start, employers have to consult with their employees and listen to their suggestions about how retrenchments can be avoided or minimised. Consultations must involve the affected employees, the workplace forum, and if there is one, the trade union or worker representative in these consultations.
Alternatives to retrenchments should be jointly explored by affected employees and the employer. For example, before retrenching you, the company could:
• offer you a job in another part of the business,
• reduce your working hours or
• offer a voluntary retrenchment package.
If involuntary retrenchments are unavoidable, employer and workers must agree on ways of minimising retrenchments and lessening their impact on affected workers. For example, employers might agree to help workers find other jobs or to train them to improve their suitability for other positions within the company.
During consultations, workers (and their representatives) and the employer must discuss how the workers to be retrenched will be chosen as well as severance pay. These details must be confirmed in writing.
If no agreement is reached, the criteria must be fair and objective. Often, the last in, first out principle is applied, but time spent working for the firm isn’t the only measure. Employees with specialised skills may be retained, and a poor performance record may be taken into consideration.
If your employer breaks these rules, you can seek redress through a number of legal avenues.
If you’re a member of a trade union, your union leaders might give the employer notice of a strike action if union members are being treated unfairly or if the employer hasn’t followed the correct processes before issuing retrenchment notices.
If you believe your employer’s retrenchment procedure is unfair, you can also apply to the Labour Court for help, within 30 days after the employer’s notice. The Labour Court has the power to force the employer to comply with a fair procedure, prevent it from retrenching workers, and order it to award compensation to a worker.
The economy looks set to remain tight for the foreseeable future, which will put further strain on relationships between employers and workers. For this reason it is a good idea to understand how the law balances your power in your relationship with your employer so that you can protect yourself against any unfair treatment.
*For more information on Legal & Tax, visit www.legalandtax.co.za, call 0860 LTS LTS (587 587) or email email@example.com.
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