In this extremely challenging time, many organisations have to retrench staff. Why do you need guidelines when doing retrenchments? In short, to manage risk. Rather do it correctly the first time than end up paying penalties as well as the retrenchment package. South African employment legislation is specific about the criteria for retrenchments. These guidelines highlight some key aspects.
DO:
- Follow the law to the letter.
- Check the notice period in terms of the BCEA (Basic Conditions of Service Act).
- Use objective criteria such as “last in, first out” as selection criteria.
- Do the retrenchments before all financial resources are depleted: the amount the company owes to employees will remain a liability even when your company is liquidated. You, as owner or director, may be liable for the debt.
- Calculate leave days up to the final date of the retrenchment.
- Communicate thoroughly and transparently with staff.
- Use an employment law specialist to assist you with retrenchment processes.
DON’T:
- Use performance or attitude as criteria to select employees for retrenchment.
- Liquidate the company thinking you will be exonerated from your obligations toward your employees.
- Try to take short cuts.
- Stop communicating with staff, both those who are being retrenched and those staying behind.
- Do it without assistance.
Retrenching staff is difficult under any circumstances. It is particularly challenging in this time of increased stress and tension. Protect yourself and your staff through a careful, legal process, supported by labour law experts.