Although we use the colloquial term "retrenchment" the dismissals are in fact dismissals for reasons arising from the employer's operational requirements - that is dismissals for operational requirements.
What are operational requirements?
The Labour Relations Act defines them as "requirements based on the economic, technological, structural or similar needs of an employer".
There is a Code of Good Practice on Operational Requirements Dismissals that defines these terms further, it clarifies:
"As a general rule, economic reasons are those that relate to the financial management of the enterprise".
Technological reasons refer to the introduction of new technology which affects work relationships either by making existing jobs redundant or by requiring employees to adapt to the new technology or a consequential restructuring of the workplace.
Structural reasons relate to the redundancy of posts consequent to a restructuring of the employer's enterprise."
Unlike dismissals for misconduct where there is fault on the part of the employee, operational requirements dismissals are "no fault" dismissals.
For this reason, the employer is required to follow a more detailed and considered procedure before dismissing.
In addition, the operational requirements dismissals must still be procedurally and substantively fair. /p>
Section 189 was updated in 2002 and an additional section 189A was added specifically to ensure the fairness of operational requirements dismissals.