By Rachelle van Staden
Retrenchments are regulated by section 189 of the Labour Relations Act (No. 66 of 1995), hereafter referred to as the Act, and this Act allows employers to retrench employees due to operational requirements. Operational requirements are defined as requirements based on economic, technologic, structural or similar needs of the employer.
Dismissal due to retrenchments is regarded as a “no fault” or “no mistake” dismissal, because there is no fault or mistake on the employee’s side that led to the retrenchment.
Before the employer can proceed to retrench employees due to operation requirements, the employer must comply with the process as regulated by section 189 of the Act. The employer must notify all employees that might be affected by the retrenchment that he or she is contemplating it and that he or she wants to start with the consultation process.
Thus, the employer must provide a notice to all the possibly affected employees and this notice serves as an invitation to the consultation process. The employer must consult with all the necessary parties before he or she can proceed with retrenchments.
The employer must consult with one of the following parties, starting at the top of this structure moving down until the appropriate consulting party has been identified –
a) any person whom the employer is required to consult in terms of a collective agreement;
b) if there is no collective agreement that requires consultation –
a. a workplace forum, if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum; and
b. any registered trade union whose members are likely to be affected by the proposed dismissals
c) if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals; or
d) if there is no such trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose.
The obligations placed on an employer, is both procedural and substantive, and the employer must ensure that the retrenchment is fair and reasonable.