Labour Relations Act, 1995 (Act No. 66 of 1995)Codes of Good PracticeDismissal based on Operational RequirementsSchedule 8Part G - Operational Requirements24. Fair procedure |
Written notice
| (1) | When an employer contemplates the possibility of retrenchments, it must initiate a process of consultation by giving a written notice. |
| (2) | The notice should be in the form of Annexure A. The notice must contain the relevant information available to the employer at that time. |
Consulting parties
| (3) | The notice must be sent to those set out in section 189(1) for the purpose of consultation. |
| (4) | Employers, including small employers, that have not concluded a collective agreement that applies to retrenchment consultations, should send the notice to a registered trade union whose members are likely to be affected by the proposed retrenchments, or if there is no such union, to each employee whom the employer proposes to retrench.7 |
Consultation
| (5) | The employer must then consult with a view to reaching consensus. |
| (6) | The employer must consult in good faith by keeping an open mind and seriously considering any proposals put forward by the union or employees. |
| (7) | The consultations should cover— |
| (a) | the reasons why there is a need to retrench; |
| (b) | appropriate measures to— |
| (i) | avoid the retrenchments; |
| (ii) | minimise the number of retrenchments; |
| (iii) | change the timing of the retrenchments; |
| (iv) | mitigate the adverse effects of the retrenchments; and |
| (c) | if the employees are to be retrenched— |
| (i) | the method for selecting the employees to be retrenched; and |
| (ii) | the severance pay. |
Selection criteria
| (8) | In the absence of an agreement between the consulting parties, the selection criteria must be fair and objective. Selection criteria that are generally accepted to be fair and objective include length of service, retention of skills or the qualifications of employees. |
| (9) | Irrespective of whether there is an agreement or not, selection based on union membership or activity, pregnancy or any other discriminatory ground can never be fair. |
Disclosure of information
| (10) | To ensure meaningful engagements, the employer must disclose relevant information. |
| (11) | Section 189(4)(a) of the Act, read with section 16, regulates disputes about the disclosure of relevant information. |
The period of consultation
| (12) | The period taken for consultations and the number of consultation meetings is dependent on numerous factors, such as the complexity of the issues giving rise to the retrenchments, the nature and size of the employer and the scale of the retrenchments. |
| (13) | Simple retrenchments at a small employer can be done relatively quickly. Large and complex retrenchments will probably require more consultation meetings over a longer period of time. |
| (14) | If section 189A of the Act is applicable, the minimum period for consultations is 60 days; however, a consulting party may not unreasonably refuse to extend the period of consultation if such an extension is required to ensure meaningful consultation. |
Severance
| (15) | The minimum amount of severance pay is prescribed in section 41 of the BCEA. |
Re-employment
| (16) | Subject to the outcome of the consultation process, employees who are retrenched may be given preference if the employer again hires employees with comparable skills and qualifications. |
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| 7 | Employers covered by a bargaining council should ascertain whether there are council agreements that regulate retrenchment procedures. |