By Jessica Anne Wood, journalist, Justmoney
The Commission for Conciliation, Mediation and Arbitration (CCMA) has noted an increase in the number of small and large-scale retrenchment cases brought before it.
It has blamed the increase in the number of referrals since 2009/2010 on the last global economic crisis.
To tackle this problem, the CCMA launched a job insecurity crisis committee. It will be “embarking on an urgent action plan to support businesses in distress and the job insecurity spike,” revealed the CCMA.
Unfair dismissal and unfair labour practices
There are a number of incidents where dismissals can be viewed as fair. According to the Department of Labour, a dismissal is deemed fair if, “the specific needs of a job are not being met, [and/or] a worker has reached retirement age.”
However, the CCMA pointed out that there are a number of unfair labour practices. These are:
• Unfair conduct of the employer relating to the promotion, demotion or training of an employee or relating to the provision of benefits to an employee.
• The unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee.
• A failure or refusal by an employer to reinstate or re-employ a former employee in terms of any agreement.
• An occupational detriment, other than dismissal, in contravention of the Protected Disclosures Act of 2000 on account of an employee having made a protected disclosure as defined in that Act.
A dismissal will be deemed “automatically unfair” under the following conditions:
• Dismissal for participation in a lawful strike or protest action and dismissal for refusal to do work normally done by an employee on a lawful strike;
• Dismissal to compel an employee to accept a demand in respect of a matter of mutual interest;
• Dismissal because an employee exercised a right conferred by the Labour Relations Act (LRA);
• Dismissal for reasons related to an employee’s pregnancy;
• Dismissal as a result of unfair discrimination;
• Dismissal related to a transfer, or a reason related to a transfer as contemplated in section 197 or 197A of the LRA; and
• Dismissal in contravention of the Protected Disclosures Act of 2000, by the employer, because of the employee having made a protected disclosure.
The retrenchment process
When an employer is first contemplating retrenching employees, a consultation process needs to take place through a workplace forum, with a registered trade union whose members are likely to be affected, and with the employees who are likely to be affected, explained the CCMA.
It is important that an attempt is made to reach a consensus on avoiding and/or minimising dismissals, the timing of dismissals, the method for selecting which employees will be dismissed, ways to lessen the effect of retrenchment, and severance pay.
During the retrenchment process, an employer must disclose the following information in writing:
• the reasons for retrenchment,
• alternatives considered and why they were rejected,
• the number of employees likely to be affected and their job categories,
• the proposed method of selection for the employees who will be retrenched,
• the timing of the retrenchments,
• the proposed severance pay,
• the assistance that the employer will be offering to assist employees, such as allowing time off for employees to attend interviews, and
• the possibility of future re-employment.
Once the above has been completed, the employer must provide the other consulting party (i.e. the employees or trade union) the “opportunity to make presentations that must be considered and responded to,” revealed the CCMA.
If no agreement is reached for what criteria will be used to select who will be retrenched, a fair and objective set of criteria must be implemented. According to the CCMA, this is often the last in first out principle. However, if there are employees with key skills, selection may be based on performance, and poor performance records can be taken into consideration.
After the employees have been selected, the necessary payments need to be made. These include:
• Severance pay: Employees should be paid at least one week’s salary for each completed year of service. However, the CCMA highlighted: “Should an employee unreasonably refuse an offer of alternative employment he/she will not be entitled to a severance package.”
• Outstanding leave must be paid out.
• Notice pay: Employees are entitled to a notice period for the termination of their work, and are entitled to pay for the period of notice. According to the CCMA the employer may or may not require an employee to work during the notice period.
Period of employment Notice period
Less than six months One week
Between six months and one year Two weeks
More than one year Four weeks
“Domestic and farm workers who have been employed for more than six months, must receive four weeks’ notice,” added the CCMA.
• Depending on the employment contract, employees may be entitled to other payments, such as pro rata payment of bonus, pension and provident fund.