In South Africa, the Labour Relations Act (LRA) requires employers to consult with affected parties when contemplating restructuring as a result of operational requirements. Section 189(1) of the LRA is clear in this.
It is evident that many businesses are facing economic pressures and technological changes, which require amendments to terms and conditions of employment. In such cases, it is important for companies to start consultations as soon as possible for legal reasons and to collaborate with employees to identify possible alternatives to retrenchment. By using models such as design-thinking, collaborating with various stakeholders, and opening engagement, the prospects of identifying viable options and reducing the impact of job losses are improved.
Recently, President Ramaphosa called on businesses to delay possible retrenchments as South Africa tries to remediate the transport, crime, and energy crisis.
In the event that an employer fails to comply with the requirements of section 198 of the LRA as a result of a lack of consultation, the Labour Court may find the employer guilty of unfair labour practice. For example, in the case of IMATU obo K C JOUBERT and MODIMOLLE LOCAL MUNICIPALITY, the Labour Court found that the employer failed to consult with the affected parties as required by section 189 of the LRA.
It is important for employers to comply with the requirements of the LRA to ensure that the retrenchment process is fair and that the rights of employees are protected. Failure to do so may result in legal action being taken against the employer.
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