Due to the SABC’s and certain mining companies’
announcements in 2018 that extensive retrenchment processes would be rolled
out, this article aims at discussing retrenchments on a major scale. The
related section in the Basic Conditions of Employment Act is section 189(A)
which is specifically applicable to employers who retrench more than 50 staff
members out of a total of 500 or more employees.
The current weak economic circumstances in
South Africa, and the poor management of institutions and companies are not
covered in this article, but it can be readily accepted as the most compelling
cause of the retrenchments.
Section 189(A) of the Basic Conditions of
If the relevant employer plan to implement
retrenchments on a major scale due to operational reasons, he must adhere to
the requirements enforced by the Act. The regulations in this section include
the number of employees who were retrenched in the preceding 12 months due to
operational reasons and the proposed number of employees who are going to be
1) All employees who are influenced by the
retrenchment process must be notified in writing. If there is an existing collective
agreement in place, negotiations must take place according to the agreement,
which include two-way consultation, and any employee who falls under this
collective agreement must be informed. If there is no collective agreement in
place, all employees must be notified of the proposed retrenchments.
2) The requirements for consultation or
discussions include that it should not be just a once-off notification, but it
must be a continuous fair and reasonable process.
3) After the notification, which should include
an invitation for negotiation or consultation, the following matters should be
addressed and both parties must actively try to reach consensus on the
following very important matters:
possibility and alternatives to avoid retrenchments must be investigated and
reasons for the retrenchments must be stated.
and suggestions to decrease the number of retrenchments must be investigated
number of employees involved must be determined by means of a fair and
and suggestions to postpone the retrenchments must be investigated and
method of selection must be clear; if a collective agreement or employment
contract does not include this
aspect. If consensus cannot be reached, a fair and reasonable process must be followed. The LIFO method (Last in, first
out) may be used.
employees who are influenced by the retrenchment process has the right to a
severance package according to section 41
of the Labour Relations Act. Employees may negotiate for such a package and the minimum criterium that
may be used is one week’s salary for every year
that was completed.
available support that can be offered to the employees.
possibility of re-employment in the future must be discussed.
4) Notification of termination of service must be
sent to all employees who are retrenched according to the preceding
5) Employees have the right to comment and if the
comments are submitted in writing, it is compulsory for the employer to respond
6) The severance package payment must be done
immediately and must include the following: the normal salary payable,
outstanding leave, the severance package amount, and the notice period wage if
Author: FJ Botha