‘Unpredictability’ seems to be theme of 2020 and 2021 since the harsh introduction of COVID-19. This uncertainty coupled with the national lockdown has led to many employers struggling to keep operations afloat, and as such, has left them considering the possibility of retrenchment.
It must be noted that retrenchment is seen as a last resort. Employers are encouraged to exhaust all other alternatives before electing to retrench their employees. Section 189 of the Labour Relations Act 66 of 1995 governs the retrenchment process and implements specific measures that must be adhered to during this process to ensure that it is fair and lawful.
An employer may retrench in terms of Section 213 of the Labour Relations Act 66 of 1995, which permits retrenchment for operational requirements in other words based on economic, technological, structural, or similar needs of the employer. Procedures will differ in the case of a workforce of 50 employees and above.
It is important to note that employers bear the onus of proving the reasons for operational requirement and a financial crisis does not qualify as a reason to retrench employees unless the employer is able to prove this.
The retrenchment process is outlined in Section 189 of the Labour Relations Act, click on each step below to read further:
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