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Facing retrenchment? Know your rights

Workers need to understand their rights when it comes to facing retrenchment. Picture: Andrea Piacquadio/Pexels

Workers need to understand their rights when it comes to facing retrenchment. Picture: Andrea Piacquadio/Pexels

Published Jul 17, 2023


Retrenchments and lay-offs have become increasingly regular occurrences for South African workers in the current economic climate.

With thousands having to contend with these unexpected changes, there's a dire need for guidance, not only on how the retrenchment process works, but how those impacted can put their lives back together.

The sudden loss of a job is more than just an economic hardship, says Linda Meyer, managing director of The Independent Institute of Education’s Rosebank College and former commission for the Commission for Conciliation, Mediation and Arbitration (CCMA).

“A drastic life change often ushers in intense emotional responses, such as stress, anxiety, depression, and a blow to one's self-esteem. In these trying times, understanding the psychological impact of unemployment, and knowing where to seek help is paramount, in addition to understanding the logistics of how to proceed.”

Before managing the effects of retrenchment, however, it is essential that those facing these job losses understand their rights.

“Understanding these rights can help protect you against unlawful dismissal and ensure that you receive the full benefits and compensation to which you're entitled under the Labour Relations Act.”

Meyer outlines these rights:

Right to fair procedure

Before retrenchment can occur, your employer is legally obligated to engage in a consultation process. The employer should discuss the reasons for the proposed retrenchments, possible alternatives to retrenchment, the number of employees likely to be affected, and the proposed method for selecting which employees to retrench.

“Your employer must allow you to voice your opinions, suggest alternatives, and challenge the proposed retrenchment process.”

Right to severance pay

If you're retrenched, she says you are entitled to at least one week's wages for each completed year of continuous service as severance pay. This is in addition to your normal salary and benefits. These benefits are stated in the Basic Conditions of Employment Act.

Right to notice or payment in lieu

The Act also states that your employer should give you written notice of termination or retrenchment.

“The notice period varies depending on your length of service. For employment duration of one year or more, the notice period is four weeks.”

If the employer chooses not to give notice, Meyer says they must pay you in lieu - referred to as 'pay instead of notice'. This means you will be compensated for the notice period, whether you work during it or not.

Right to a certificate of service

Upon retrenchment, you will receive a Certificate of Service from your employer. This certificate should indicate the duration of your employment, your positions, and your remuneration at the time of departure.

Right to unfair dismissal protection

Should you believe your retrenchment was unfair, Meyer says you have the right to challenge it.

“Unfair retrenchment could be due to the employer failing to follow correct procedures or discriminating in choosing whom to retrench. The CCMA provides a platform to hear and address such grievances.”

Right to assistance

Lastly, she notes that you have the right to ask for assistance from a trade union representative or a fellow employee during the consultation process.

“Understanding these rights is the first step in safeguarding your interests during retrenchment. If you are uncertain about any aspect of the process, you should seek legal counsel, consult a trade union or seek advice from the CCMA.”