Retrenchments – Myths, Mysteries and Misconceptions

 
Judging by the enquiries received, there are very few employers who are aware of correct retrenchment procedures, and if they are then they largely ignore the statutory requirements. This I deduce from the large number of enquiries I receive from employees  who are facing retrenchment and I shudder when they tell me what procedure the employer is following.

Myth : Management have the right to retrench for any operational requirement and there is nothing the employee can do about it.

Truth : Rubbish !! No right is absolute, and retrenchments may only be resorted to as a last resort for genuine reasons based on the genuine technological, structural or economic requirements of the employer.

Retrenchments may not be used as a disguise to effect dismissals based on misconduct or incapacity, although it is a fact that this practice is quite widespread.  

This conclusion I reach based on the number of enquiries I receive from employers who inform me that they have perhaps a hundred or more employees but "we need to retrench one employee" Nobody "needs to retrench one employee " and it is blatantly obvious that the employer is disguising a dismissal as a retrenchment. This is a despicable and disgusting practice – not to mention that it is totally unfair procedurally and substantively.

Myth : Management must first decide who is to be retrenched, and decide on date of termination for those selected. The only remaining requirement is then for management to inform employees accordingly.

Truth : As soon as management "contemplate" retrenchment, consultations with the employees likely to be affected must begin. Put differently, as soon as management decide "we may have to retrench" then consultations must begin. The Act (section 189 LRA) states that these consultations must be with the trade Union if there is one, or failing that the Workplace Forum if there is one or failing that with the employees "likely to be affected."
 

This not a choice that the employer must make : The Act states "the employer MUST consult" and therefore there is no option – the employer MUST do it. What is more, the requirements of section 189 apply even if only one employee is being retrenched.

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