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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 [email protected]   

 

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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