Retrenchment Procedure Documents Pack

RETRENCHMENT PROCEDURE DOCUMENTS PACK

Summary A business that employs staff may use Retrenchment Procedure documents when implementing the company’s Retrenchment procedures and policies.

Who should use Retrenchment policies, procedures & templates? If your business employs staff it is recommended that the company implement procedures and forms to cater for the unfortunate event of retrenching staff. In this way the company and its employees are aware of the process that needs to be followed, and the forms that need to be used during retrenchment procedures.

What does the Retrenchment Procedures Pack consist of? This Retrenchment procedures template pack consists of the following documents:

• Retrenchment Policy
• Notice of Possible Retrenchment
• Notice of Retrenchment
• Letter of Service

What do you need to do to use the Retrenchment Policy and Retrenchment Forms?

• Read the template Retrenchment Policy and documents, and adapt them for your requirements, where applicable.
• Use the policy and documents should you need to institute retrenchment procedures.
• Ensure the Retrenchment Policy is available to all staff.

Feel free to browse the Policies & Procedures category on our website for more sample employment policy & procedure templates.

Why is it important for you to use the Retrenchment Policy and Retrenchment Forms?

When retrenching employees or looking the retrench employees, the employer must follow the provisions of the Labour Relations Act, labour court regulations and the Employment Act which sets out the basic conditions of employment, as well as any applicable collective agreement.

The retrenchment process is a joint consensus seeking process (also known as a collective agreement) which should be fair and objective, and based on appropriate criteria such as operational requirements, number of employees, basic conditions of employment, registered trade union details and job categories.

Section 189 (3) of the Labour Relations Act requires the employer to disclose in writing to the employees or their unions (where applicable) all relevant information including but not limited to: The reasons for the Retrenchment, Alternatives to dismissal (dismiss employees) that were considered and the reasons why they were rejected, The number of employees likely to be affected, Proposed method of selection, Severance pay employees must be paid, Assistance that the employer will be offering and the possibility of future re employment.

When an employer contemplates retrenchment, appropriate measures must be taken to minimize the financial and emotional impact on affected employees (also known as the retrenched employee) and to ensure a fair retrenchment process. This includes the inclusion of a bargaining council, a workplace forum and registered trade union or any other consulting party to represent the employees likely to be affected by the proposed method of retrenchment. (also known as the consulting employees representations)Finally, the employer must respond to the consulting employees’ representations and suggestions.

The employer must provide a written notice inviting the affected employees to consult with them by way of a workplace forum regarding the proposed retrenchment and the retrenchment process.

During the consultation process, the employer proposes the criteria that will be used to select the retrenched employees. These criteria must be fair and objective criteria and based on fair reasons related to the employment relationship.

If the employer decides to retrench, the retrenched employees must be paid any severance pay, such as a weeks notice pay, and other discretionary payments related to severance pay linked to their proposed retrenchment and the retrenchment process.   Employees should be paid at least one week’s remuneration for each completed and continued year of service. Usually, such retrenchment packages include additional benefits. A legal agreement exists on acceptance of such a voluntary retrenchment offer.

If the employer disagrees that the employee was unfairly retrenched, the employee can claim unfair dismissal. However, should an employee unreasonably refuse the retrenchment process, their claim will not succeed.

Employers may only retrench if “Operational Requirements” necessitates it. Operational requirements are requirements based on the economic, technological, structural, or other business needs of an employer.

Temporary labor should be eliminated before considering retrenchment, and if retrenchment is necessary, a retrenchment package must be offered to the affected employees such as a week’s remuneration for each week worked more than a year or any other severance pay proposed by the employer towards the consulting employees. (also known as a weeks notice pay) This can include any kind and discretionary payments made by an employer towards their consulting employees or other employees likely to be affected by a fair procedure of retrenchment.

In eliminating temporary labour or any other labour, an employer must also consider economic, technological, and structural factors when proposing retrenchments.

During the consultation process, the affected employees can be represented by a consulting party, and, in-line with the conditions of Employment Act, the employer must use criteria which is objective to determine who will be retrenched and the number of employees.

Employers must consult with employees or their representatives before retrenchment, and provide written notice of the proposed retrenchments. The notice period should be at least the usual notice period or as agreed upon in the employment contract.

The employer must also propose a fair severance package that includes severance pay, notice pay, and any kind of discretionary payments.

If the employer offers voluntary retrenchment, the employee may claim unemployment benefits, and the employer must pay the proposed severance pay. However, if the employee unreasonably refuses alternative employment, they may forfeit their right to claim unfair dismissal.

Retrenched employees have the right to claim unemployment benefits and one week’s notice pay. Employers must eliminate temporary labor before retrenching permanent employees. Unfair retrenchments can result in legal consequences for the employer.

Our Retrenchment documents are fully in line with the Labour Relations Act, any Labour court precedents as well as the conditions of Employment Act.

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