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What's the right retrenchment procedure?

Ivan Israelstam

 
Employers have regularly been reminded in this column of the factors that render dismissals for operational requirements (retrenchments) fair and unfair. Despite this, employers continue to get it wrong and, in many cases they land up paying a very heavy price. In order to win a retrenchment case at the CCMA or Labour Court, the employer must fulfil its onus of proving that the retrenchment was fair in all respects. It is the employer who has the duty of proving that there was a genuine and valid reason for retrenching staff in the first place.

Furthermore, they must prove that the decision as to which employees will be retrenched and which will keep their jobs was arrived at fairly. The retrenchment procedure as laid down in the Labour Relations Act (LRA) must be followed properly and in good faith by the employer. The employer must also prove that he/she has shared with the targeted employees (or their representatives) all documentary and other information pertinent to the retrenchment.

Despite the fact that the retrenchment procedure is clearly spelt out, employers are still being caught out at the CCMA and in the Labour Court for failing to follow procedure. For example, in the case of Numsa and others v Dorbyl Ltd and another (2004, 9 BLLR 914) 176 employees embarked on a protected strike. Thereafter, the plant at which they worked was closed down and 122 employees were retrenched.

The employees claimed that the retrenchments were unfair because (among other reasons) they had not been properly consulted by the employer before being retrenched and the options were not explained to them. The court found that the decision to retrench was taken at an executive meeting held before the employer had consulted the employees regarding the retrenchments. This rendered the consultations meaningless as the employer had already made up its mind to go ahead with the retrenchment procedure and, therefore, it went into the consultations with a foregone conclusion.

As a good-faith consultation is the core requirement of retrenchment procedure, the retrenchment was procedurally unfair. The employer was required to pay each of the 122 retrenched staff two months' remuneration in compensation. In Nkopane and others v the Independent Electoral Commission (2007, 2 BLLR 146) the employees were employed on the basis of fixed-term contracts. However, prior to the natural expiry date of the contracts, the employees were retrenched.

The Labour Court found that it was a breach of contract for the employer to terminate the contracts prior to the expiry date unless the employees had been in breach themselves. However, this had not been the case and the employer was ordered to pay all the employees out up to the date of the expiry of their contracts.

There are a number of possible reasons for the fact that employers are still not complying with dismissal law, including:

  • Employers know the law well enough but do not believe it will be applied to them;
  • They hear about the law but do not believe it;
  • The operational circumstances of the employer are so dire that the pressure distracts the employer from the legal aspects of the retrenchment;
  • There is also a mistaken belief that, if there is a good reason for retrenchment, the court will be lenient on the procedural side of the case;
  • Employers misuse so-called retrenchments to get rid of undesirable employees. As their priority is getting rid of such employees, the legal requirements are given little consideration;
  • Employers are given poor legal advice regarding retrenchment law and implementation strategy.
 

Although the courts have become stricter over time in applying retrenchment law, employers still implement retrenchments without giving thought to labour law compliance. As I have repeatedly warned employers, the courts see retrenchments as no-fault terminations. This means that the employee is losing his/her job through no fault of his/her own. In addition, the unemployment rate in South Africa is extremely high and it is very difficult for retrenchees to find new jobs.

For these reasons the courts have no hesitation in protecting the rights of retrenchees and making employers pay heavily where they deviate from the law.

  • Ivan Israelstam is chief executive of Labour Law Management Consulting. He can be contacted on 011-888-7944 or 082-852-2973 or   

 

The Protection of Personal Information


By Jan du Toit, Senior Consultant, SA Labour Guide

 

After more than seven years in the making, President Ramaphosa announced last year an effective date of 1 July 2020 for the Protection of Personal Information Act (POPI), Act 4 of 2013. “Responsible Parties” only have approximately 5 months left until 30 June 2021 to become compliant in full.

 

The duration of a typical POPI compliance project will differ from one business to another depending on the nature and size of the business, as well as the Personal Information processed by a Responsible Party. Business owners are therefore advised to, without delay, embark on a compliance project to meet the deadline.

 

Even though the Protection of Personal Information Act is welcomed by most, it has been long overdue and will require business owners (“Responsible Parties” in terms of the Act) to process Personal Information according to 8 processing conditions as set out in the Act.

 

The purpose of the Protection of Personal Information Act is in essence found in the title of the Act; to protect the Personal Information of “Data Subjects”. It gives effect to ones right to privacy as enshrined in the Constitution but also provides balance in terms of the right to privacy weighed up against the right to access to information.

 

The Act regulates the manner in which Personal Information must be processed and provides protection and recourse to those whose rights are infringed. Further to this, the Act makes provision for the establishment of an Information Regulator. Advocate, Pansy Tlakula has already been appointed as the Information Regulator a couple of years ago and has done a great deal of work in establishing her office.

 

Before I get into more detail about the eight processing conditions, it is important to note that the Act is “definitions driven”. It is therefore of utmost importance to first highlight some of the definitions found in the Act for readers to better understand the eight processing conditions.

 

The first definition is that of “Personal Information”. Personal Information is widely defined in the Act and includes, but is not limited to, information relating to an identifiable living natural person or a juristic person (“Data Subjects”), such as:

  • Race, gender, sex, pregnancy, marital status, nationality, ethnic or social origin, colour, sexual orientation, age, physical or mental health, well-being, disability, religion, conscience, believe, culture, language, birth

  • History - education, medical, financial, criminal, employment

  • Identifiers – number, symbols, e-mail address, physical address, telephone numbers, location, online ID or other assignment to a person such as a unique identifier (in example a student or patient number)

  • Biometric information – physical or psychological behavioural characterization, blood type, fingerprints, DNA analysis, retinal scanning, voice recognition

  • Personal opinion views or preferences

  • Correspondence implicitly or explicitly of a private and confidential nature

  • Views or opinions of another individual\

  • The name of the person with other information or the name alone

 

The second definition of importance is that of “processing”. The processing of Personal Information includes but is not limited to any operation/activity or any set of operations, whether automated or not, concerning Personal Information. It includes:

  • Collection / receipt / recording / organizing / collation / storage / updating / modification / retrieval / alteration of Personal Information

  • Dissemination by means of transmission distribution or making available to others.

  • Merging / linking / restricting / degradation / erasure / destruction of Personal Information.

 

A Responsible Party can either be a public body, private body or any other person or persons, domiciled in South Africa and that determines the purpose and means for processing of Personal Information.

 

Throughout the entire lifecycle of Personal Information in any business, eight processing conditions must be adhered to. The eight processing conditions are summarized below:

 

Condition 1 – Accountability. The Responsible Party must always ensure that the conditions set out in Chapter 3 of the Act and all the associated measures are complied with.

 

Condition 2 – Personal Information must be collected and processed lawfully in a reasonable manner that does not infringe the privacy of a Data Subject. The Personal Information may only be processed if it is adequate, relevant, and not excessive.
Personal Information may only be processed if the Data Subject consented thereto. Alternatively, where it is necessary to do so for the conclusion or performance of a contract, an obligation in terms of law, to protect the legitimate interest of the Data Subject, or to pursue a legitimate interest of the Responsible Party.

 

A further requirement is that the Personal Information must be collected directly from the Data Subject.

 

Condition 3 requires that Personal Information must be collected for a specific explicitly defined and lawful purpose related to a function or activity of the Responsible Party. Such Personal Information may not be retained any longer than necessary for achieving the purposes for which the information was collected and/or subsequently processed.

 

Condition 4 prohibits the further processing of Personal Information unless such processing is compatible with the initial purpose of collecting the information.

 

Condition 5 requires that Responsible Parties must take reasonable, practicable steps to ensure that Personal Information is complete, accurate, and not misleading. Such Personal Information must also be kept up to date, taking into consideration the purpose of the Personal Information.

 

The nature and purpose of the Personal Information will dictate as to how often such Personal Information must be updated.

 

Condition 6 addresses some of the rights of Data Subjects, such as the right to be informed by the Responsible Party before information is collected. The purpose of collecting and from where Personal Information will be collected must be disclosed to the Data Subject.

 

A Data Subject is entitled to the details of the Responsible Party and to be made aware of the consequences of not making Personal Information available to the Responsible Party.

 

Should it be required that Personal Information be collected and processed in terms of legislation, the Data Subject must be made aware accordingly.

 

As per Section 72 of the Act, the Data Subject must be advised if Personal Information will be transferred across the borders of South Africa. Under such circumstances the Data Subject is entitled to first be made aware of legislation in other countries that provides adequate protection of the Personal Information. In the absence of legislation, whether there are any binding corporate rules in place, alternatively a written agreement that offers adequate protection for the Data Subject, concluded between the Responsible Party and he third party.

 

Condition 7 requires that Responsible Parties must secure the integrity and confidentiality of Personal Information by taking appropriate reasonable, technical and organisational measures, to prevent loss or unlawful access of Personal Information under the control of a Responsible Party.

 

In this regard the Responsible Party is required to identify all reasonable and foreseeable internal and external risks, and to establish and maintain appropriate safeguards. Compliance with such safeguards must be regularly audited and measures updated if so required.

 

Condition 8 deals with the rights of Data Subjects and participation. In terms of condition 8, Data Subjects have the right to establish whether Personal Information is held by a Responsible Party and to have it corrected or destroyed if it is inaccurate, irrelevant, excessive, out of date, incomplete, misleading, or have been obtained unlawfully.

 

Responsible Parties are also further required to introduce Data Subject rights and participation in their PAIA (Promotion of Access to Information Act) manuals.

 

Responsible Parties are also not permitted to send direct marketing material to Data Subjects without their written consent as per from 4 four of the regulations of the Act.

 

Other important considerations in terms of the Act are that a Responsible Party may be issued with an administrative fine of up to R10 million for its non-compliance with the Act. Additionally, Data Subjects have the right to sue Responsible Parties and under specific circumstances, the Information Officer of the Responsible Party may be imprisoned.

 

Each Responsible Party must register an Information Officer (the head of the organization or a person acting in such capacity) with the Information Regulator. The Information Officer may appoint deputies to assist with ensuring compliance within the business.

 

From the above, it is evident that a POPIA compliance project is not something that should be undertaken without a solid understanding of the Act.

 

Our subscribers, a.k.a. “Responsible Parties”, are invited to attend our online POPIA presentations to better understand the Act and to ensure compliance. In-house training can also be arranged on request.

 

The author of this article is also available to assist employers with compliance projects in the form of awareness sessions, gap analysis, policy development / implementation and staff awareness.

 

For further information pertaining to training, readers are invited to visit www.labourguide.co.za or to contact Jan du Toit at .

 

 

 

 

 

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