6 Steps Your Employer Must Take For Your Retrenchment To Be Fair

If your employer retrenched you without following the proper procedure, your termination may have been unfair and you may be entitled to compensation.

These are 6 steps your employer must take for your retrenchment to be fair:

1. Genuine redundancy.

You can only be retrenched for one reason- and that is, because the company has a redundancy which means that there is “surplus labour”.

Surplus labour means that the company no longer needs as many employees as it used to. The main reasons for this are usually: financial difficulties, or operational & technological changes. You cannot be retrenched because of misconduct or poor performance, or any reason other than if work in the business has stopped or reduced, and as a result, the company no longer needs you as an employee.

2. Consultation.

Your employer must consult you before retrenching you. He should let you know as early as possible that there is a possibility that you may be retrenched; give you all the relevant information about why the company may need to retrench you; and allow you to make any suggestions that you believe can help avoid the retrenchment.

3. Alternatives.

Your employer must try all reasonable alternatives before retrenching you. Some of the main alternatives are: giving you a job in another position that the company still needs (even if he has to train you to perform the role); reducing your working hours and pay (and other employees’ work hours and pay as well); or temporarily laying off you and other employees until the situation improves (but layoffs should not last more than 3 months).

4. Fair selection.

If the alternatives don’t work and the retrenchment needs to take place, your employer must fairly select the employees who are going to be retrenched. The main selection method is called LIFO (last in, first out). Which means that the employees with the shortest tenure must be retrenched first. Your employer can choose not to use LIFO, but he must have a good reason. Whatever method he uses to select employees, he must apply it fairly.

5. Notice.

Your employer must give you at least 45 days’ notice of your retrenchment, unless there is a good reason why the notice period has to be shorter. The notice must state: (a) the names and classifications of the workers being retrenched; (b)the length of service and current wage rates of the workers being retrenched; (c) the reasons for the redundancy; (d) the proposed date of the termination of employment; and (e) the criteria used in the selection of the workers to be retrenched.

Your employer cannot make you take your vacation leave during the notice period; he cannot retrench you during the notice period; and he cannot offer you payment in lieu of notice.

6. Severance.

Your employer must pay you the correct amount of severance benefits that you are entitled to. And he has to pay your severance benefits within 30 days of the date of your retrenchment.

Your employer must comply with these requirements, otherwise the Court may find that either your retrenchment was not carried out in accordance with good industrial relations, or that there was no retrenchment at all and you were unfairly dismissed.

And if that happens, you may be entitled to compensation.