RETRENCHMENTS IN SOUTH AFRICA

UNDERSTANDING THE RETRENCHMENT PROCESS

The retrenchment process is a delicate balance between the employer’s operational requirements and the rights of employees. Employers must ensure compliance with labour laws to avoid disputes, while employees should seek guidance to understand their rights and entitlements. Retrenchment is a structured procedure aimed at balancing the employer’s operational needs with the rights and security of employees. It is considered a last resort after all reasonable alternatives to save jobs have been explored. The process typically includes the following key steps:

1. Notification
   Employers must notify all employees who might be affected by the retrenchment process.
2. Consultation
   Meaningful consultation must take place between the employer and relevant parties, such as trade unions, workplace forums, or directly with employees. These discussions focus on exploring alternatives to retrenchment and determining fair criteria for selecting employees for termination if no alternative can be found.
3. Termination
   Once all avenues have been exhausted, termination notices are issued to the identified employees.
4. Severance Packages
   Affected employees are entitled to severance pay, typically equal to at least one week’s remuneration for each completed year of service, as stipulated by the Basic Conditions of Employment Act (BCEA).

UNDERSTANDING LARGE-SCALE RETRENCHMENT IN SOUTH AFRICA

Large-scale retrenchment is defined under South African labour law based on the size of the employer’s workforce and the number of employees affected. The thresholds for large-scale retrenchment are as follows:

1. 10 employees if the employer has up to 200 employees.
2. 20 employees if the employer has between 201 and 300 employees.
3. 30 employees if the employer has between 301 and 400 employees.
4. 40 employees if the employer has between 401 and 500 employees.
5. 50 employees if the employer has more than 500 employees.