Retrenchments

I recently acted for an executive employee in the CCMA in a matter regarding the employer’s unfair retrenchment of my client. The employer is a large multi-national corporation. The employee had worked for the employer for approximately two years.

The Human Resources Director of the employer who had vast experience, tendered evidence that the company treated executive employees differently from junior employees. She drew a distinction between so-called “white-collar” and “blue-collar” workers. As she was dealing with the retrenchment of an executive employee, she did not consider it necessary to follow section 189 of the Labour Relations Act. This section inter alia deals with the employer’s mandatory obligation to engage an employee in consultation, in a meaningful “joint consensus seeking” process, to attempt to reach consensus regarding various issues surrounding the employer’s proposed retrenchment of that employee.

In this case the employee had three meetings in total, each lasting not longer than twenty minutes to half an hour. She received nothing in writing and was informed at the first meeting that her position was to be declared redundant.

The arbitrator held that none of the meetings could be regarded as “meaningful joint consensus seeking”.

Accordingly the arbitrator held that the company had failed to satisfy the strict criteria as prescribed by section 189 of the Act when it purported to consult the employee regarding her retrenchment.

The employee had applied for re-instatement however the arbitrator considered that the relationship between the parties could not be restored.

The arbitrator held that the dismissal was unfair both procedurally and substantively and awarded the employee the equivalent of 8 months remuneration, which was just short of R 1 000 000

This award re-enforces the employer's obligation to comply with section 189 comprehensively, when an employer embarks on a retrenchment exercise, irrespective of the seniority of the affected employee.