Unions and workers in Johannesburg protest retrenchment plans at gold mining company Sibanye-Stillwater | Photo by Ihsaan Haffejee.
Retrenchment is a reality in the world of work. Companies decide to lay off workers due to various factors, presenting challenges for everyone involved. As worker leaders, you are on the frontline, defending workers’ rights when companies consider letting people go.
The Labour Relations Act (LRA) and the Commission for Conciliation, Mediation and Arbitration (CCMA) provide workers with legal and cost-free easy access to just treatment in employment and in a retrenchment process. However, our labour legislation has grown in complexity since 1995, with many rules and regulations that can lead to uncertainty and confusion. Unions need to keep up with changes in the law and help workers understand and use their rights and responsibilities.
Labour laws are an important tool for worker leaders who organise and negotiate to protect and further workers’ interests. It is crucial to understand the legal aspects of retrenchments.
Legal obligations and procedures: What does the Labour Relations Act say about retrenchments?
Employers must adhere to the rules outlined in Sections 189-195 of the LRA when considering retrenchment due to operational needs. These rules provide valid reasons for layoffs and outline the required procedures.
Employers can only retrench employees for valid operational reasons, including economic conditions, technological changes, and new management structures.
Before retrenching, the employer must consult with the worker representative from the union or workplace forum or with the workers directly if there are no unions and forums.
The consulting parties must seek consensus on the following:
- Appropriate measures to prevent retrenchments.
- Appropriate measures to reduce the number of retrenched employees.
- Timing of the retrenchment.
- Actions to alleviate the impact of retrenchment.
- Selection criteria for the employees to retrench (e.g., last in, first out, or proximity to retirement).
- Terms of the severance package for retrenched workers.
The employer must provide written information to the consulting party, including the reasons for the proposed retrenchment process, the alternatives considered, and the reasons for rejecting each alternative.
Pathways for dispute resolution: CCMA and labour court options
In the case of a dispute about operational needs, the aggrieved party can seek assistance from the Commission for Conciliation, Mediation, and Arbitration (CCMA). If conciliation and mediation fail, the party can take the issue to the labour court.
Challenges in negotiation: Some obstacles the negotiator could face
- Unions cannot stop job cuts; they can only try to lessen the impact.
- Employers often do not genuinely consult before layoffs; they may have already decided what to do.
- Employers might blame external factors like new technology and disasters.
Recognising the need for legal advice
If the union and employer disagree, the union can seek advice about the legality of the retrenchment process.
The negotiator's ideal outcomes
- Jobs are saved, and workers are happy with their severance packages.
- Potential retrenchments are deployed to other departments, regions, or provinces, with input from the employees.
- Workers are reskilled and retrained for deployment into other positions.
- Workers are reskilled and retrained for other positions.
- Workers receive skills training to re-enter the labour market.
Let’s close with the sentiments of a worker leader engaged in an LRS workshop in 2019:
“In the event that anything happens, know there’s a law that protects you. As a union member, you need to know exactly what the law is. Use labour law as a resource, i.e. for organising, defending, and improving working conditions. There are things that are not within the labour law, but if we have a collective agreement, you are able to cover what is not in the labour law. We negotiate for extras, those things that are not covered in the labour laws.”
