consult with unions or staff before you retrench
26 September 2008

When an employer considers retrenching employees, full consultations must first take place about this intention before making any decision to retrench, according to the Labour Relations Act.   When employees belong to a trade union, the employer is required to consult with that union on several issues, the most important of which is ways of avoiding job losses. Should the employer choose not to engage in proper pre-retrenchment consultations, and the employees are forcibly retrenched, this would normally result in a finding of unfair dismissal. But where the employer has made every effort to consult, it can't be blamed for failure to do so.

There are several reasons that retrenchment consultations may fail to take place or may fail to comply with the requirements of the act. These include:
a)  The employer was unaware of the legal obligation to consult with the employees/union.
b)  Some employers are aware of the requirement to consult, but are not aware of the role of the union or the extent of the consultation requirements.
c)  It can also happen that the employer is not aware of the fact that the employees have joined a union.
d)  It is unlikely that any of these reasons will be an acceptable excuse for the employer's failure to consult. This is because employers are required to find out about what they do not know.

The employer may have urgent reasons for needing to retrench, such as:

1.  Dire financial circumstances threatening the immediate survival of the business.
2.  A pressing need to get rid of employees pending a hastily arranged takeover by another entity. The prospective buyer may have set a tight deadline for the date of the takeover, and may have           made it a condition of the deal that workforce numbers be reduced before the conclusion of the sale.
3. The employer may have no money to pay salaries during a consultation exercise (which may be protracted, especially when the employer has more than 50 employees). The employer may therefore need to curtail retrenchment consultations.

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Ivan Israelstam,  www.labourguide.co.za