Retrenchments and Labour Law Attorneys

Retrenchment can mean considerable financial loss for employers and serious hardship for employees. In fact, recent reports show that where major downsizing takes place, there is a severe risk to the mental and physical health of all staff. That’s because retrenchment doesn’t just affect those who lose their jobs but also workers left behind who have to deal with the stress of potential future job losses, a depleted work force and an increased workload..

Of course, the loss of workers who have been trained and developed over time can constitute a major loss of human resources to a business. Such loss can take a long time and much new investment to replace. Consequently, planning retrenchments carefully and weighing up your options in advance are essential.

Retrenchment Planning

As an employer you should consider alternatives to retrenchment. In fact, the law dictates that you must do this, as well as consult with all relevant parties in advance of making job cuts. However, if retrenchment is unavoidable, fair procedures must be followed including written notice of aspects such as:

  • The reasons for retrenchment
  • What method of retrenchment is intended
  • The number of workers employed
  • The number of workers to be retrenched
  • The number of workers retrenched in the last year
  • The dates and timings of retrenchments
  • Assistance the employer intends to provide retrenched workers
  • Opportunities for possible re-employment

Retrenchment Consultation Procedure

When considering retrenchment of workers, an employer must consult everyone mentioned in a collective agreement or workplace forum, as well as the relevant trade union. Where there is no trade union, the workers or their representatives should be consulted directly. This consultation should result in agreement on ways to:

  • Avoid or minimise retrenchments
  • Change the timing of retrenchments
  • Reduce the negative effects of retrenchment
  • Choose which workers to retrench
  • Deal with and apportion severance pay
  • Determine what process / method of retrenchment is to be followed

A consulting document should be drafted carefully. Once it has been submitted to the consulting party they have a period in which to respond, in writing. If you then disagree with the response, you must state why, also in writing. The success of a retrenchment process can depend largely on the skilful handling of this communication by expert labour attorneys – an area we can help with, in conjunction with the client’s strategic goals.

Disputes Arising From Retrenchments

Not surprisingly, retrenchments are often characterised by conflict of one kind or another, leading to involvement by the CCMA or action in the labour courts. Even worse are occurrences like strikes and lockouts, which prove costly to the organisation and damaging to staff morale. That’s why we find so often that helping to negotiate a settlement early on can minimise or even avoid any lasting damage from retrenchments.

Our long experience as labour attorneys has shown that there is often an enormous down turn in productivity after a retrenchment programme, resulting not just from a depleted workforce, but also profound damage to morale. It’s essential that this risk is minimised with immediate effect after the last consultation has taken place. That’s why our service goes beyond just planning job losses, by providing input to help restore staff morale at the conclusion of a retrenchment programme, and beyond.

Although the process of retrenchment can be complex, dealing with it strategically at the right time can eliminate a lot of trouble later on. We advise anyone who is considering workforce downsizing to minimise damaging conflict early on and talk to us about your retrenchment plans.