Alternatives to retrenchment are employers obliged to save jobs. Westair retrenches amid virus outbreak the namibian. Responsible retrenchment ministry of manpower singapore. However, they are not allowed to use retrenchment to get rid of deadwood, trouble makers, poor performers or other problem employees. Despite many things that can be said against retrenchment, it does handle the immediate problems very effectively.
Retrenchment strategy advantages and disadvantages wisestep. If these become severe enough, an employer may have to consider retrenching employees. In the circumstances, having found that the respondent did have a valid commercial reason for retrenching the applicant, the court finds that the applicants retrenchment was substantively fair. Introduction retrenchment may happen not only during recession but it is also relevant when the economic situation is good. Sasol said it had discussed the latest round of retrenchments with unions. Retrenchments your guide to labour law in south africa. Preempting this natural termination can be problematic, especially when retrenchment is the envisioned mode of termination. Strategies for retaining employees and minimizing turnover. Apparently, termination of service is permitted by law for operational reasons, which is commonly known as redundancy.
Typically, economic reasons given for the need for retrenchment include the ability to make money or to retain sufficient funds to continue operations. The ground or grounds for termination must be specified in the written notice of. Here are the 7 things you should know about retrenchment from a legal perspective. Last year a tow truck took away simoneaus old mercury. Staff are one of the biggest expenses for a company and if the business is going to go under due to rising costs then you can bet your bottom. The lra refers to the time when the employer contemplates retrenching employees. Is there a difference in meaning behind the terminology. The crucial question that arises is, when is the duty to consult triggered. Introduction retrenchment is the process by which staff is reduced to cull redundant employees and reduce the wage bill. In todays uncertain economy, many employers are forced to embark on this unfortunate route, retrenching their employees on grounds of operational requirements as per section 189 of the labour relations act 66 of 1995 lra.
Therefore an employer cannot retrench a fixedterm employee unless provision is made for the termination of the contract due to operational requirements. Industrial disputes act, 1947 downsizing, retrenchment. The employee agrees that the services provided by himher may be terminated for good reason including, but not limited to, operational reasons, poor performance and misconduct before the. These are defined as requirements based oneconomic, technological, structural or similar needs of the employer. Why cracker barrel and shake shack shares are down today, but zoom video stock is up the surgeon general warns that covid19 infections could last through labor day. Retrenchment correct procedure when retrenching workers. In any case, if the employees are unhappy with the reason for the retrenchment they can, in many circumstances, go on strike. Cracker barrel is a restaurant known for serving home cooked southern style food in an oldtimey atmosphere. In dismissing ketses application, the labour court held that s1891 has always been interpreted strictly by acknowledging the hierarchy governing the consultation process prior to retrenchment. Labour law advice on the topic of fair reason and procedure for retrenchments in south africa. Things to consider before you retrench most employees have a high number of dependents.
The most common reason people are retrenched in south. The number of employees employed and the number of employees dismissed during the past 12 months. Retrenchment without withdrawing some of the products. Employers too often make the mistake of retrenching problem employees because they perceive the disciplinary process as being too drawn out and complicated. This astonishes me because i hate cracker barrel, and i think you should too. It is for this reason that the industrial legislation, while not denying for. One of the retrenched employees who preferred not to be named, said with an economy that was ailing even before their retrenchment, they can. Retrenchment laws do not favour employers skills portal.
Retrenchment is a form of dismissal that is justified on the basis that the roles of the employees concerned have become redundant. If the employees choose to go to court instead of striking they only have to show that the retrenchment took place. The union disputed the ccmas jurisdiction to facilitate the retrenchment consultations on the grounds that the reasons for the proposed retrenchments did not fall under the definition of operational requirements in section 2 of the lra. Previously the courts were very lenient towards employers as regards their reasons for retrenching. Cracker, sometimes white cracker, is a racial slur used against white people, used especially against poor rural whites in the southern united states. The reasons for this are varied, but usually stem from an operational necessity to maintain production or the inability to pay severance packages due to cash shortages. In another case, the employer maintained that the reason for retrenching a particular employee was linked to its financial losses over the past recent years. If a company is carrying out retrenchment, how long a notice period should it give the union and affected workers.
Even if they feel disadvantaged by the change, people generally cope better with a change that makes sense for a business. Due to this reason, it is the employer who decides on the number of employees to be employed or to be retained by considering their. Advantages and disadvantages of retrenchment strategy. The labour court has consistently accepted the lifo criterion as fair. I know i wouldnt want to pay staff if i ran a company like this. Older workers are more valuable in the workforce aarp. An employer has a right to organize his business in any lawful manner he considers best and courts cannot question its propriety. Home south africa small scale retrenchments what obligations do employers have.
It is sometimes used in a neutral context in reference to a native of florida or georgia see florida cracker and georgia cracker. Retrenching definition of retrenching by the free dictionary. The labour relations act lra allows employers to dismiss employees for reasons of operational requirements retrenchment. They could not, however, prove to the satisfaction of the labour court that their financial losses justified retrenching this employee the retrenchment was ruled to be unfair. Numsa obo samente and others v z a galvanizing pty ltd c1152009 20 zalcct 19 16 may 20. Absence from employment by reason of illness shall not be. Termination due to retrenchment lawyers in the philippines. Ive traveled all over the us and found every cracker barrel to be very busy. What are your rights when retrenchment comes knocking.
The most common reason people are retrenched in south africa and how companies decide who goes. Procedural fairness requires a fair procedure to be carried out when retrenching employees. An employer may not assume that an employee will accept. Must i notify mom if im only retrenching a small number of employees e. An employer may contemplate dismissing for operational reasons even if not any or all of the employees are eventually retrenched. What are the advantages and disadvantages of retrenchment. The court held that the management was not required to wait for a loss of business before retrenching its employees, but could retrench employees in order to prevent or guard against future losses, or for reasons such as rationalisation as long as the decision of the management was bona fide and reasonable. Retrenchment in the philippines is covered by art 297 formerly 282 of the labor code, the issuances of the department of labor, and the decisions of the supreme court. However, the lras provisions make the implementation of retrenchment, especially large scale retrenchments, extremely difficult. George frisbie, a gay waiter who was fired from the cracker barrel in tallahassee, fla. The most commonly used and often preferred selection criterion when retrenching employees is the last in first out lifo principle.
Employees, who commit misconduct, can be held accountable for their actions. Employment law, retrenchment, lifo, employers power, redundancy, industrial relations 1. A retrenchment procedure is carried out when the company has squandered a vast amount of money into something irretrievable. Termination of employment with or without notice on the grounds of. Small scale retrenchments what obligations do employers. Did the employer give the employees or union all the information relevant to the retrenchment and to the consulting process. The retrenchment must be unavoidable and fair procedure is essential. It therefore decided to consider retrenching several employees. Retrenchment is the process by which staff is reduced to cull redundant employees and reduce the wage bill.
The employer must select the employees to be dismissed based on a selection criteria agreed with the consulting employees or a selection criteria that is fair and objective. Where the employer has concluded a collective agreement with a trade. If not and the employee is retrenched the employer would have to pay him the full value of the fixedterm contract. The law relating to labour and employment in india is primarily known. Letting people work longer, economists agree, boosts overall employment and gives the whole economy a little more gas. A dedicated customer support employee left the company last month to pursue a career in recruiting and hr. Laying off some employees has a cost implication in terms of compensation for the more experienced and higher paid workers who remain. Your staff may not agree with the reason for job losses, but they are much less likely to resist if they understand the thinking behind it. Do i still need to notify mom if my company has already retrenched employees. Why cracker barrel and shake shack shares are down today. Employers need to listen to employees needs and implement retention strategies to make employees feel valued and engaged in order to keep them.
Economic the immediate inference one might make regarding economic reasons for a retrenchment is that the business is suffering losses and needs to cut costs by reducing the number of employees. The disadvantages of retrenchment include growth decline, reduced profits, smaller workforce, reduced productivity and inability to meet consumer demand. Alternatives to retrenchment are employers obliged to. Labour law advice procedure for retrenchments in south. Retrenchments can your employer make you reapply for. Before the employer can retrench any employees for operational reasons, the firm must, in writing, consult with the employees, people in a collective agreement or workplace forum, and the registered trade union or the representative of the employees. If reorganization results in surplus employees, no employer is expected to carry their burden. After the consultation process has been exhausted, the employer may make its decision to retrench, and then issue a notice of retrenchment to the affected employees. Section 189 of the lra lays down a number of strict requirements, the breach of which would normally place the employer in hot water. Employees must equip themselves with the requirements prescribed by the labour relations act 66 of 1995 the act, to ensure that they can safeguard themselves against unfair retrenchment practices and other illegalities which their employers may implement. Retrenchment may be due to inevitable reasons including rationalization or installation of new laboursaving machinery.
Discover great deals and saving through aarp membership. The employer must give fair reasons for making the decision to retrench and follow a. Retrenchment of employee can an employer retrench a. Even if you retrench employees for a fair reason, such as for operational reasons, you must still follow the correct procedure. What the law says about retrenchment iol breaking news. What are the requirements for large scale retrenchments. Sasol cuts more than jobs to survive lower oil prices fin24. Such reasons need not be confined to the current financial situation but could include the companys projected financial circumstances. Operational reasons include economic, technological, structural or similar needs of the employer.
An employer is under an obligation to consult with employees who may be retrenched prior to retrenchment. It is highly recommended to seek labour law advice before taking steps to retrench one or more employees. The labour broker 2mpower was also present at the meeting. In south african law an employer is permitted to retrench employees due to economic and business conditions, provided that the employer follows the correct consultative procedure and the dismissals are based on fair and justifiable reasons. But for legal as well as economic reasons, this is not a decision to be made lightly. Apsjobs cracking the code veterans employment program contains submenu.
The ground or grounds must be specified in the written notice of termination. If employees are selected in terms of unfair criteria their dismissals with be considered unfair. However, it does not define the meaning of contemplates. Procedural fairness in a retrenchment case relates to the procedure followed by an employer prior to retrenching an employee.
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