human resources

What the Law Says About Retrenchment

Zoe Papadakis

By Zoe Papadakis May 18, 2022 · 3 mins read

What the Law Says About Retrenchment
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Unemployment increased to a record high of 35.3% in the last quarter of 2021 and that figure may very well keep rising. More and more companies are forced to look at retrenchment, but what does the law say about that? It is important to understand which the correct and legal way of handling this is in order to avoid disputes.

When it comes to employee dismissal, an employer must have a valid reason for retrenching a member of staff. As HR Pulse notes, this may be due to new technology which replaces workers, a downturn in the economy or a drop in demand for services, or a re-structuring of the inner workings of a company.

When it comes to retrenchment, the law states that, when terminating an employee’s services, an employer must ensure that fair procedure is followed. This includes providing written notice of contemplated retrenchment to the employees, which must contain the reasons for the possible retrenchment. If more than one employee is being retrenched, then the notice should also include the number of employees to be dismissed, selection criteria etc. It is important to note that employers considering retrenchment, according to the law, are obligated to pay employees severance pay. This should be at least one week’s pay for each completed year of service unless otherwise stated in an employee’s contract (provided this is legally compliant).

The stats reflecting the number of retrenchments in South Africa is unsettling but on the opposite end of the scale, there are labour shortages in certain industries. This may be due to various reasons, but many reports hint towards a negative work environment as the reason why employees keep leaving. This is often because they are not feeling engaged and challenged, or because of management mishaps (as it is famously said, “people don’t quit their jobs; they quit their managers”) and because there is no work-life balance, which is important if you want to prevent burnout and ensure employees are working at their best.

Tying into this is the topic of leave. Many employees say they feel apprehensive to take time off because they do not feel comfortable approaching their employers, and because they worry about how it will affect their job security. This is counterproductive as employees who are granted paid time off are less likely to take sick leave. They will also feel happier in their positions and more likely to have a sense of loyalty to the company.

When it comes to leave management, many managers tense up just at the very thought. What comes to mind is all the paperwork, all the back-and-forths between departments, having to field constant leave applications… it can honestly become a burden. Which makes having an online leave management system like LeavePro so important— because it takes care of all that for you.

LeavePro was designed to streamline the entire leave management process with several features that:

  • Tracks leave balances automatically
  • Allows employees to apply for leave and check their balances
  • Allows you to see who will be away, and thus plan accordingly, via a company leave calendar
  • Ensures you are compliant with the BCEA by including all leave types
  • Allows you to easily access the system anywhere, anytime from your PC, tablet or cellphone.

Have you been considering adopting a leave management system into your company? We are offering a 30-day free trial to give you the full experience of what LeavePro has to offer. Sign-up for a free trial or find out more information about LeavePro.