According to a Business Day article (SA’s recession rescue plan ‘paralysed’ by ineptitude – Mthabo Le Roux - 13/07/09), around 200 000  people have been retrenched in South Africa this year so far.

There is no doubt that the international economic fallout has affected every sector of the South African economy.

The GEO is of the opinion that the figure of 200 000 employees is far lower than the actual number of people that have been retrenched. GEO officials are attending to more retrenchments this year than in the past decade.

From a Labour Law point of view, there is no doubt that litigation around current retrenchments will occupy the Labour Court for years to come.

Unlike the law dealing with unfair dismissal, retrenchment law is complex and fraught with difficulty. The reason for this is that the retrenchment of an employee is regarded as a ‘no fault dismissal’. Stated differently, it is not the employee’s fault that he was dismissed for economic or other operational reasons. With this in mind, the Labour Court scrutinizes the process and reasons behind retrenchments. Added to this, given the current high level of job losses, The Labour Courts follow a stricter approach to the process followed and reasons given by the employer.

 

It is therefore extremely important that employers ensure that they are guided from the very moment that the employer ‘contemplates’ rationalizing or restructuring an operation.

In NUMSA obo Members v Timken SA (Pty) Ltd

(2009) 18 LC 5.3.1, the Labour Court found that the employer had unfairly retrenched six employees. The employer had not used fair selection criteria. They had used a combination of LIFO, disciplinary record, attendance and tardiness to decide on who should be retrenched. They had also failed to consider alternatives such as the “bumping” of the employees into other positions. They had also failed to offer the retrenched employees the opportunity to apply for new positions when these became available. The employees were each awarded 12 months salary and the employer was liable for their own and the union’s legal costs.

Ed- Should you be contemplating retrenchments, please ensure you contact the GEO from the very outset.

Andre Rabe