KNOW YOUR RIGHTS IN THE WORKPLACE REGARDING RETRENCHMENTS
Updated: Nov 29, 2022
With the economy in South Africa in a precarious state, many employees have been retrenched, placed on indefinite temporary lay-offs, or have received forced salary reductions over the past few years.
A common complaint which we have received time and time again has been that employers are changing the terms and conditions of employment due to operational requirements, but the employees have been given no input in these decisions.
It is important to understand what your rights and obligations are as both an employee and employer.
In South Africa, we follow an integrated system of laws, moulded by the Constitution, legislation, such as the Basic Conditions of Employment Act, Labour Relations Act, and Common Law. Due to the everchanging nature of labour relations, this is what we call living law, and changes constantly.
Should the employer make the decision to reduce the employee’s salary, working hours, leave days etc, this could constitute a breach of contract.
A breach of contract is not necessarily a dismissal, however it is important that employees know how to approach these breaches correctly in order to maintain the employment relationship as far as possible.
An employer should consult with employees should changes to the employment terms and conditions become imminent. Should the employee refuse to agree to the suggested changes in their employment terms and conditions, these changes cannot be effected. Should the employer give the employee the option to be dismissed or accept the changes, this may constitute an unfair dismissal.
Should the employer and employee fail to agree on a suitable change to the employment terms and conditions, the employer may only restructure the business by way of section 189 proceedings, in terms of the LRA, wherein a full consultative processes guided by procedural nuances must be observed. If the employer is in a position to retrench employees in terms of section 189 of the LRA, and the employee refuses a reasonable alternative to retrenchment – such as a salary reduction, short-time etc, then the employee may forfeit their severance pay in such a circumstance.
It is important to ensure that you follow any grievance procedures contained in your employer’s company policies.
Some Bargaining Council Agreements make provision for short time and/or temporary lay-off, and some employment contracts have built-in provisions in this regard. In the absence of such express provisions, employers may not simply impose these measures unilaterally. The employer will need to consult with the employee in order to come to an express agreement. If no agreement is reached, the employer may have to follow the section 189 retrenchment process as a last resort.
The unilateral change of an employee’s terms and conditions of employment may constitute a unfair labour practice, an unfair dismissal, or in some instances, a civil suit for breach of contract.
Both employees and employers should reach out to a labour practitioner to receive the correct advice particular to their specific circumstances to ensure that South African labour law is being correctly and fairly followed in the workplace.
For more information, kindly contact firstname.lastname@example.org or call 010 109 1055 to arrange a consultation with one of the attorneys in Johannesburg or Cape Town.