Retrenchment basics: The consultation process
Fair retrenchments occur after an open, transparent consensus-seeking consultation process, but where is an employer supposed to start? Given section 189’s sequential nature, this is a summary of how a retrenchment process is supposed to be handled. Please note that this does not apply to section 189A (large-scale) retrenchments:
(Please note: This document should assist employers in ensuring that consultations are meaningful and that no critical matters are left out. This should not be used as a checklist, rather a tool to assist consultations.)
If there is a union in the workplace: Forward a letter or fax to the recognised union inviting them for consultation on the contemplated dismissal of employees due to operational requirements (section 189(3) notice). Issue the same notice to employees that may be affected.
If there is no union in the workplace: For employees that are not members of a union, call a staff meeting (more than one meeting may be appropriate for large numbers/different levels of staff). Inform the employees of the possibility of a staff reduction. Then issue all employees who are likely to be affected with an invitation to consult (section 189(3) notice) and confirm the date of the first consultation meeting.
2. First consultation meeting:
This meeting can be with all the consulting parties or separate, depending on the practicalities.
Go through the contents of the 189(3) notice, point by point.
Ask the employees/representatives what their views are on each point and record the meeting or take detailed notes.
Ask questions to clarify (do not be afraid to consult internally or externally for advice)
Discuss the issues with the employees/representatives and try to reach consensus.
If consensus is reached with any of the consulting parties, an agreement should be entered into with each individual employee (see Form 4.3). Where a union is involved, the agreement can be with the union on behalf of its members.
If no consensus is reached on any point, make a careful note of the representations and arguments raised on behalf of the employees before moving on to the next point.
Agree on a date for the next meeting to properly consider the representations and to respond.
3. Further consultation meeting (if no agreement has been reached):
Consider the representations made on behalf of the employees. If you must revert on points and it is important to have further discussions in an attempt to reach consensus, then do so in a follow-up meeting. If consultations have been exhausted and there is clearly no point in having further meetings, then make decisions on all the relevant aspects. Where you disagree, formulate proper reasons for disagreeing.
4. Final consultation meeting (once all issues have been properly discussed):
Convey your final decision to the union/representatives, indicating in what respects you were able to accommodate their representations. Where the employer does not agree, state the reasons for disagreement.
Thank the employees/representatives for their inputs and close the meeting.
5. Draft a letter containing final decisions to the employees/representatives.
6. Consultation with the individual employee:
Explain to the employee about the consultation with the union/representatives and what has been decided.
Obtain the employee's details and give the employee notice in terms of his/her service agreement.
7. Upon the employee's departure, ensure that the employee:
is given severance pay.
receives all other monies due to him/her.
is given a letter of reference.
receives assistance with his/her UIF claim and SARS directive; and
is assisted/advised regarding pension/provident fund benefits (if any).
By adhering to the provisions of section 189, employers ensure that there is a good chance for meaningful engagement. This does not mean all jobs will be saved, but it does mean that the parties should be closer to consensus and further from litigation.