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Ivan Israelstam


The Labour Relations Act (LRA) allows employers to dismiss employees for reasons of operational requirements (retrenchment). However, the LRA's provisions make the implementation of retrenchment, especially large-scale retrenchments, extremely difficult. Section 189 of the LRA lays down a number of strict requirements, the breach of which would normally place the employer in hot water. These provisions require that the employer must:

  • Have a good reason for the need to retrench
  • Use fair criteria in deciding which employees are to be retrenched
  • Follow an intricate consultation procedure aimed primarily at seeking ways of avoiding retrenchment.
 

This process is started off with a section 189(3) notification to advise the company's employees that the employer is contemplating retrenchments. The intricate requirements of this procedure make speedy retrenchments extremely difficult, if not impossible. Despite the existence of these stringent restrictions, section 189A of the LRA - read together with section 64 (10(a) - contains additional far-reaching provisions that further delay the completion of the retrenchment process.

Section 189A applies only where the employer has more than 50 employees and:

  • Where there are up to 200 employees employed, the employer contemplates retrenching at least 10 employees.
  • Where there are up to 400 employees employed, the employer contemplates retrenching at least 30 employees
  • Where there are up to 500 employees employed, the employer contemplates retrenching at least 40 employees
  • Where there are more than 500 employees employed, the employer contemplates retrenching at least 50 employees.

 

The number of retrenchments is calculated by adding the number of retrenchments over the previous 12-month period to the number of retrenchments currently contemplated. Section 189A allows employees wishing to dispute the fairness of the retrenchments to either challenge them in court or to go on strike. The section also requires that the CCMA must provide a facilitator to help with the retrenchment consultations should either party request this.

Whether or not a facilitator is requested, the employer is not entitled to finalise the retrenchments before 60 days from the date on which it gave the employees the section 189(3) notification. While section 189A has been written in a very confusing and unclear manner, it appears that, where the employees have neither lodged a dispute with the CCMA nor applied for a facilitator, the employer must either lodge a dispute in terms of section 64(1) of the LRA or must apply for a facilitator.

However, this can only be done 30 days after the 189(3) notification has been issued. It seems that this needs to be done even if the parties are in full agreement on all aspects of the retrenchment (although there is not complete clarity on this). Case law appears to have confirmed some, but not all of these complex, confusing and extremely peculiar legal provisions.

In the case of Leoni Wiring Systems (Pty) Ltd vs NUMSA & others (September 2007, CLL Vol 17 No 2),the Labour Court found that, if a facilitator has been appointed, there is no need for a dispute to be lodged. It appears that the application for and appointment of a facilitator takes the place of the dispute referral.

In the case of NUM vs De Beers Consolidated Mines (Pty) Ltd (September 2007, CLL Vol. 17 No 2), the Labour Court found that, if the employer wanted to complete the retrenchment process within 60 days of the date of issue of the section 189(3) notification, then it would need to lodge a dispute to the CCMA itself as soon as the law allowed it to do so.

It appears that the law relating to large-scale retrenchments is not only complex but is also incomplete. This is because it does not specify whether a dispute must be referred even if the parties are in full agreement on all issues.

The result is that employers will end up either lodging disputes where there are none, just in order to err on the side of caution, or even leave out this step and take the risk of being penalised for committing a procedural irregularity.
     
Due to the onerous, complex and dangerous nature of the requirements of the LRA, it is important that employers should not take any steps towards retrenchment before obtaining advice from a labour law expert. 

  • Ivan Israelstam, chief executive of Labour Law Management Consulting, may be contacted on 011-888-7944 or 082-852-2973 or via e-mail at [email protected]
  • Our appreciation to Ivan and the Star  newspaper for permission to publish this article

 

The four-day working week and its impact on South African labour law: Are we ready?

 

If there is one thing we can learn from the COVID-19 pandemic, it is that many employees can work from anywhere and the “normal” 9 to 5 is no longer palatable to the upcoming workforce.

 

2022/07

By Hedda Schensema, Director and Tshepiso Rasetlola, Associate, Employment Law, Cliffe Dekker Hofmeyr

 

Over the past two years, many employers have had to reassess their working arrangement as a result of the pandemic. COVID-19 served as a test run on what the “new normal” has to offer in respect of the employment relationship and some working conditions. This has resulted in many employers successfully implementing a hybrid working arrangement and, in some instances, even requiring their employees to work from home indefinitely.

 

Many employers have indicated that they have experienced an increase in productivity and less stressed employees. On the flip side, however, employees have been unable to shut down and find themselves working round the clock and over and above their normal working hours. Considering the above, does this mean that South Africa is ready for a four-day working week post COVID-19?

Countries like Belgium and the UK have been able to successfully implement a four-day working week. However, given that South Africa is highly regulated in respect of its labour and employment laws, it has been argued that it would not be as seamless or easy an exercise to implement in comparison to these countries.

 

South Africa has numerous bargaining councils and sectorial agreements that regulate basic conditions of employment in the different sectors and include, inter alia, working hours. In order to be able to implement a four-day working week model, these agreements will have to be amended and their terms renegotiated to align with such a model.

 

This means an employer cannot change the terms and conditions of employment as recorded in these agreements without first consulting the relevant stakeholders, which include trade unions, workplace forums and individual employees.

 

This is a process that is consultative and which must result in consensus being reached on all aspects related to the arrangement. A failure to obtain consent prior to implementing the working model may result in a unilateral change in terms and conditions of employment by an employer. This could expose the employer to a referral by its employees in relation to unilateral changes to terms and conditions of employment.

 

In addition to this, the relevant labour and employment laws will have to be amended to cater for the working model from a regulatory point of view. Employers will need to consider their health and safety obligations towards employees in terms of the Occupational Health and Safety Act 85 of 1993, which requires an employer to, among other things, do everything reasonably practicable to protect employees’ health and safety in the workplace. In this regard, an employer’s obligations to ensure the health and safety of its employees extends to where the employee is working outside of the conventionally understood workplace, including a home office.

 

Although a four-day working week model sounds like a brilliant and exciting idea, employers will have to assess their respective sector and industry in order to establish whether it would be practicable or even feasible for its business model. Employers will also have to consider the applicable legislation and agreements regulating their sector and engage in a consultative process with the relevant stakeholders.

 

It is, therefore, perhaps premature to make a concrete finding that the four-day working week model would be possible in a highly regulated country like South Africa. We will therefore have to monitor its progress and assess from an individual employer’s business model as to whether the four-day working week would be appropriate.

 

For more information please contact Hedda Schensema at [email protected] or Tshepiso Rasetlola at [email protected]

 

Article published with the kind courtesy of Cliffe Dekker Hofmeyr www.cliffedekkerhofmeyr.com.

 

 

 

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