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One of the unfortunate consequences for employees of this outbreak of corona virus, is potential retrenchment. This week Ivan explains the benefits offered by the Department of Employment and Labour to mitigate this eventuality, and reminds employers of the importance of following the consultation steps as set our in the retrenchment clauses of the Labour Relations Act. 

Two important issues are raised his week by Ivan Israelstam - first that employers should not use retrenchment as an excuse to deal with their failure to manage employee performance, and when conducting restructuring and retrenchment exercises, there are clear steps to be followed to consult with employees - these include consultation, information sharing, and consideration of alternatives. For details on the requirements - see Labour Relations Act sections 189 and 189A, and the Code of Good Practice on Operational Requirements Dismissals.

This week Ivan Israelstam explains the process an exployer should adopt if a retrenchment of employees is contemplated. He explains what the steps are to be followed, to ensure that the employer complies with the requirements of the Labour Relations Act for what is an operational requirements dismissal.

When employers are faced with financial challenges, and contemplate retrenching employees, it is critical for the employer to first consult on alternatives to avoid retrenchment. Ivan Israelstam explains what is required, and how employers should consider alternatives. If the employee makes proposals, which the employer does not accept, it is necessary that the employer provides a response on why the alternative proposed is not a viable option.    

This week Ivan Israelstam points out that the CCMA and bargaining councils do have the jurisdiction to decide upon retrenchment disputes, if there is a failure to agree at conciliation. This arises from the amendments to the Labour Relations Act in 2002. It is critical that employers follow a fair procedure and not simply go ahead with retrenchments without engaging in a fair consultation process.  

Retrenchment consultations are potentially emotional and difficult discussions. This week Ivan Israelstam explains whether employees involved in a retrenchment consultation have a right to bring in a lawyer or other external labour law representative. 

Over a long period of time, many employers will be able to recall employees, who have not fitted in well in the organisational culture - despite being qualified for the position. However, sometimes the responsibility for not being able to get on with other employees does not rest with the employee, but elsewhere - and possibly with the manager or boss. This week Ivan Israelstam provides a practical example of the limits of managerial prerogative, and how any apparent incompatibility should be identified and handled.

Management, executives, and company boards do not always agree on an appropriate method to deal with senior employees when a company suffers a financial downturn. This week Ivan Israelstam points out how important it is to investigate the facts before deciding on the correct path to follow. A company should not agree on a retrenchment and then try also to dismiss for some form of misconduct or lack of performance.

Employers may retrench employees for reasons of economic, structural, or technological reasons, in terms of the Labour Relations Act and the Code of Good Practice on Operational Requirements Dismissals. The Labour Appeal Court has stated that retrenchment has a serious impact upon employees. Decisions on retrenchment therefore have to be made based upon sound objective criteria, which emerge after consultation with the parties concerned, and are backed by evidence. Ivan Israelstam sets out the issues determined by the courts in two cases.

Using retrenchment as a means of dealing with poor performers is not only risky and potentially very expensive, but also represents a failure of management. This week Ivan Israelstam explains what constitutes fair criteria for retrenchment and the possible costs to an employer of failing to conduct a procedurally fair consultation.

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