Labour Law
In a rapidly changing and agile business world, organisations are forced to review their business needs in order to increase profits, limit losses and remain relevant in the marketplace. This process of reviewing often leads to reducing the staff count, bringing about the topic of retrenchment. The Labour Relations Act, No. 66 of 1995 (LRA), specifically section 189 permits an employer to dismiss employees for operational requirements, however specific steps need to be followed and certain criteria needs to be met in order to ensure a fair retrenchment process has been followed. This can however often lead to critical skills being lost, especially if the Last in First Out method is implemented. A solution is thus needed that can justifiably be implemented not only to save critical skills but also support the continuation of the business.
When faced with Retrenchment for Operational Reasons it is noted that the LRA does not provide specific criteria to follow in the consultation process and the involved parties are left to consult on the appropriate criteria to use.
When engaged in such consultations, Good Practice Guidelines provided by the CCMA include the Last In First Out principle, skills, performance and qualifications based metrics. Often, due to the subjective nature of measuring skills and performance, most consultations tend to be based on the LIFO principal, which are thought to have the least amount of risk attached to it. However, through applying this principal, the organisation risks removing critical skills and talent from the employee pool. Therefore, the need to consider a combination of selection criteria should be considered.
The judgement of National Union of Metalworkers of South Africa and Others v Columbus Stainless (Pty) Ltd (JS529/14) [2016] ZALCJHB 344 (30 March 2016) supports consideration of experience, skills, conduct and adaptability as selection criteria. However, to objectively define skills, competence, and adaptability, employers may find themselves at a crossroad in the consultation process as these are mostly based on perceptions of individual behaviour at work. Perceptions do risk being subjective and therefore will be hard to prove in both the consultation process as well as the labour court without specialist guidance based on scientific methodology.
Solution:
Our unique approach, driven by a team of duly registered and experienced Industrial Psychologists, provide our clients with a bespoke (cost effective) solution that is based on scientific methodologies incorporating an integration of customised determined selection criteria that was decided on by all relevant stakeholders in S189 process.
This solution will enable employers to confidently present their objective approach to the labour court. Additionally, it will ensure that appropriate candidates are retained in order to drive the operational requirements of the organisation after the staff count has been reduced.
We therefore invite you to contact us with your retrenchment query or concern for an initial obligation free, 30 minute consultation.