I’ve received an e-mail from a concerned reader who manages a restaurant.

She recently found out that the owner – who resides in Britain and only visits South Africa twice a year – had put the restaurant in the market some months ago.

Due to the current economic climate, there has been very little interest so far. The restaurant is also in a poor location, which is not helping matters.

She has now been advised that the owner has decided to operate on a skeleton staff and that he will be reducing the number of employees through a retrenchment process.

This news has come as a shock to our reader as she has never been in such a situation. She is asking for clarity on the procedures that need to be followed by the employer.

The releasing of staff based on operational requirements is categorised as “no fault” dismissals, meaning the employees are not responsible for the termination of their contracts.

Because of this, the Labour Relations Act (LRA) places certain obligations on the employer. These are aimed towards ensuring that all possible alternatives are explored and that the employees to be dismissed are treated fairly.

Although the situation of the restaurant is dire, the owner is still obliged to meet and consult with the staff that have been identified for retrenchment.

This can be done on an individual basis or within a workplace forum if there is one in place. If the employees are part of a trade union, a representative may be nominated for consultation purposes.

The employer must issue a written notice to the relevant parties, inviting them to a consultation.

At the consultation, the employer must disclose the reasons for the proposed dismissals as well as the alternatives that were considered and why these have been rejected.

The employer must also reveal how many employees are likely to be affected and what method was used in the selection process.

The timeframe in which the dismissals are likely to take place, as well as the proposed severance packages, must also be discussed. The issue of re-employment should also be on the agenda, especially if the business – in this case the restaurant – is sold.

The consulting parties must attempt to reach consensus and, if possible, decide on appropriate measures to avoid or minimise dismissals. They can also try to change the timing of the impending retrenchments to mitigate the adverse effects of these.

The parties should also agree on the criteria to be used in selecting the employees to be dismissed and the severance pay for such workers.

Employees must be given the opportunity to make representation on the issues under consultation and any of the parties may request the Commission for Conciliation, Mediation and Arbitration (CCMA) to appoint a facilitator.

Once the employer has reviewed the representations, he must respond to them in writing if he does not agree with them.

After consultation, the employer must select the employees to be dismissed in accordance with the agreed criteria or, if none have been agreed on, criteria that are fair and objective.

Retrenched workers must receive severance pay in addition to their ordinary payments. The severance pay should be equal to at least one week’s remuneration for every completed year’s service.

If our reader or any of the other staff are offered alternative employment within the company or with another employer and they choose to decline such offers, they will forfeit their right to severance pay.

Send your labour and other workplace related questions to coetzee@fullstopcom.com.

Booysen & Rossouw Attorneys in Port Elizabeth specialises in labour related legislation. The firm also covers injury on duty cases as well as all other aspects of the law.

Issued by:

Full Stop Communications

Coetzee Gouws
041 368 4992
082 575 7991

On behalf of:

Booysen & Rossouw Attorneys