Under the current Covid-19 lockdown conditions, retrenchments are inevitable.
Or are they?
And if they are, how do you go about doing this?
In this article you’ll learn how to go about doing retrenchments correctly in these trying times.
The lockdown has devastated businesses. Many are under massive financial strain. Employees are sitting at home; temporarily laid off due to no work. Some without pay!
UIF TERS will run out at the end of June. This will create an interesting new situation. No more UIF TERS and no work for all employees either!
What happens after UIF TERS has run its course?
Will staff no longer be “temporarily laid off”?
Can they remain employed but be unpaid (no work no pay)?
Or will we need to start retrenching because there’s no work and no UIF TERS? At least then retrenched employees can go and claim unemployment UIF benefits.
Avoiding Retrenchments during Covid-19 lockdown
At this stage the Government has given us no clear indication of what will happen when there’s no more UIF TERS at the end of June. Also, we’ll not know at what Covid-19 lockdown level we’ll be. Many businesses will or may be operational but struggling all the same.
The economic crises certainly won’t be over.
So, do you start planning for possible retrenchments?
And if not, why not?
Retrenchments normally have a very emotional and traumatic impact on all those involved, for both the retrenchees as well as those who remain behind. The employees that aren’t retrenched often have feelings of insecurity and demotivation. Unfortunately, this can result in lower productivity within the business, something you can ill afford right now.
If you do retrench some people under the current Covid-19 lockdown situation, the probability of them finding employment soon afterwards is very small. Retrenchments will therefore decrease their spending power. And large scale retrenchments will have an even more devastating effect on the economy.
Businesses are therefore urged to do everything that they can to avoid retrenchments. Be agile, be flexible and look for alternatives. And use retrenchments as a last resort.
Retrenchment as a Final Solution
When the Covid-19 lockdown level allows your business to operate again, your employees will have to return to work. They can’t be temporarily laid off any longer even if your business is still struggling financially. If UIF TERS has stopped and you have no other options, then you may find yourself in a position where you have to do retrenchments. Before you do anything, you have to show that there is a real reason for the retrenchment and that it is unavoidable (meaning that you must consider it only as a last resort).
When this happens you must follow the procedures as laid down in section 189 of the Labour Relations Act, even while we are under Covid-19 lockdown. You will be required to consult with all the employees that the retrenchments are likely to affect (or their workplace forum, registered trade union or elected representatives, or any person elected in terms of a collective agreement).
Procedures You Need To Follow
- Issue a written notice to the affected employees inviting them to meet and consult with you. You’ll need to give them all the necessary information about the possible retrenchments for this consultation; current situation, cost cutting exercises, reasons for downsizing, alternatives etc.
- When consulting with these employees, the law says that you must engage in a joint consensus-seeking process on the matters contained in the notice.
- Ask the employees to come up with ideas and alternatives to avoid, minimize or delay possible retrenchments and discuss any matters contained in the notice as well as anything else relating to the proposed retrenchment.
- Respond to any ideas or alternatives submitted by the employees. If you disagree with them, you must state the reasons why you disagree with them.
- If there are no alternatives to avoid, minimize or delay retrenchments, and after the consultation process has been exhausted, you may then make your decision to retrench.
- Select the employees that you are going to possibly dismiss based on the selection criteria that you have agreed on with the employees, or a selection criterion that is fair and objective.
- Finally you must issue a notice of retrenchment to the affected employees.
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