Labour Relations Act, 1995 (Act No. 66 of 1995)Codes of Good PracticeDismissal based on Operational RequirementsSchedule 8Part G - Operational Requirements22. The nature of operational requirements |
| (1) | The Act defines a dismissal based on an employer's operational requirements as one that is based on the "economic, technological, structural or similar needs of the employer". This type of dismissal is commonly called a retrenchment. 6 |
| (2) | It is difficult to define all the circumstances that might legitimately form the basis for a retrenchment. As a general rule, economic reasons are those that relate to the financial state of the employer. Technological reasons refer to the introduction of new technology, which affects work relationships either by making existing jobs redundant or by requiring employees to adapt to the new technology, or a consequential restructuring of the workplace. Structural reasons relate to the redundancy of posts resulting from a restructuring of the employer's business. |
| (3) | Dismissals for operational requirements have been categorised as "no fault" dismissals. In other words, it is not the employee who is responsible for the termination of employment. Because retrenchment is a "no fault" dismissal and because of its human cost, the Act places particular obligations on an employer, most of which are directed toward ensuring that all possible alternatives to dismissal are explored and that the employees to be dismissed are treated fairly. |
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| 6 | To make things easier to understand, the term retrenchment is used to include all types of dismissals for operational requirements. |