How Does Retrenchment Work In South Africa?

How Long Does A Retrenchment Process Take?

Retrenchment is a complex process in South Africa, guided by the Labour Relations Act, specifically Section 189. It’s not about employee fault but about an employer’s need to adjust to changing operational requirements. This could be due to economic shifts, technological changes, or restructuring within the company.

The process requires employers to engage in fair consultation with either the relevant trade union, workplace forum, or the affected employees. The aim is to reach consensus on several crucial aspects, including efforts to prevent dismissals, reduce the impact on employees, and agree on severance pay.

Transparency is key; employers must disclose detailed reasons for the retrenchments, the criteria for selecting employees to be dismissed, the timing, and the proposed severance pay. Affected employees have the right to provide feedback and make representations.

Employees to be retrenched should receive a severance package, payout of any outstanding leave, and notice pay proportionate to their length of service. Further entitlements may include bonuses and retirement fund contributions, depending on the employment contract.

Should there be a dispute in the retrenchment process, employees can refer their case to the CCMA under certain circumstances.

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