Retrenchment Policy
Retrenchment Policy- For a dismissal ( be it for misconduct, incapacity or operational reasons ) to be fair, it has to be substantively as well as procedurally fair. In other words, there has to be a fair reason for the dismissal (substantive fairness) and how the dismissal takes place needs to be fair as well (in other words, it needs to be procedurally fair).
Large-scale vs Small-scale Retrenchments
Labour law for retrenchments states that there is a distinction drawn between large-scale and small-scale retrenchments. However, before the distinction between these two is drawn one needs to look at what a small employer is versus a big employer:
A small employer employers 50 or less employees.
A big employer employs more than 50 employees.
A big employer can undergo a large-scale or a small-scale retrenchment. A large-scale retrenchment at a big employer is a dismissal of a specified minimum number of employees in relation to the size of the employer. If the employer retrenches:
10 employees, and they employ between 50 and 200, this is a large-scale retrenchment
20 employees, and they employ between 200 and 300, this is a large-scale retrenchment
30 employees, and they employ between 300 and 400, this is a large-scale retrenchment
40 employees, and they employ between 400 and 500, this is a large-scale retrenchment
50 employees, and they employ over 500, this is a large-scale retrenchment
If a big employer retrenches fewer employees than the numbers listed above, this may still be considered as a large-scale retrenchment. This is if the number of employees to be retrenched – together with the number of employees who have been tretrenched in the last 12 months before the proposed retrenchment – is equal to the numbers listed above.
The heart of procedural fairness in retrenchment: the consultation procedure
At the heart of procedural fairness in retrenchments is the consultation procedure. The first step in any retrenchment procedure is for an employer to consult with:
Any party that they are required to consult with owing to a collective agreement
A workplace forum or registered trade union if there is no collective agreement
The employees themselves, who may possibly be affected by the retrenchment
Employers need to make sure retrenchment proceedings in their company are both procedurally and substantively fair as – if not – they risk a negative outcome at the CCMA.
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