When an employer contemplates retrenching employees it must have a good reason for going through with such an idea. Reasons for retrenchment that are not acceptable include the employer’s personal dislike of the employee, a desire to replace the employee with a family member, the employee’s misconduct, poor performance, population group, state of pregnancy or trade union affiliation.
Acceptable reasons for retrenchment may, depending on circumstances, include financial problems of the employer, lack of work, technological changes or restructuring of the business.
In addition to requiring a good reason for retrenching, the law also requires the employer to consult with the potential retrenches or with their representatives before deciding to retrench. The primary purpose of such consultations is to give the parties the opportunity to find ways of avoiding the contemplated retrenchments.
Another important function of the consultation process is to enable the employees and their representatives to to check whether the reasons for retrenchment given by the employer are genuine and valid. This should prevent employers who want, for example, to get rid of an undesirable employee, from using financial problems as a false pretext for retrenchment.
Section 189(1) of the Labour Relations Act (LRA) gives potential retrenchees the right to be represented in such retrenchment consultations. This is because lay employees are often out of their depth in terms of understanding retrenchment law, of understanding their rights, of picking up underhand tactics of employers and of effective consultation and negotiation skills.
Despite the fact that the law gives potential retrenches the right to such representation employers often refuse to allow the employees to bring external representatives to the consultation meetings. This can happen for a variety of reasons including:
- The employer is aware that its reason for wanting to retrench is not legally acceptable. The employer is therefore nervous that the representative will be able to detect the its impure motives
- The need to retrench is extremely urgent as the employer’s business is in immediate danger of going insolvent. The employer may then be concerned that the involvement of employee representatives could cause the process to be dragged out for too long and result in the demise of the business.
- The employer may be concerned that the employee representative may be able to identify alternatives to retrenchment that the employer would rather not implement.
- The employer may not be aware that the employees have the right to be represented.
However, whatever the employer’s motive for trying to prevent employee representation, this tactic is likely to land the employer in hot water. This is because, if the employer breaches the provisions of the LRA allowing such representation, the courts or CCMA will punish the employer.
Section 189(1) provides that potential employees are entitled to be represented by their workplace forum or trade union. Where the affected employees are not members of such organisations they are entitled to be represented by representatives nominated by the employees for purposes of retrenchment consultations.
Many employers do allow trade union representation at retrenchment consultations but few allow non-unionised employees to bring lawyers, consultants or other external representatives. The most common reason given for this is that the matter is an internal and private one and that therefore only internal representatives should be allowed.
However, section 189(1) of the LRA does not confine such representation to internal parties. On the contrary, the section allows external representation in the form of trade union officials. So why should non-unionised employees be barred from bringing external representatives? This issue is a contentious one with many employers still intent on barring external representation. In the light of the above this is a risky approach.
In the case of Workers Labour Consultants obo Petros Khoza & others vs Zero Appliances cc (1999, 11 BLLR 1225) the retrenched employees took the employer to Labour Court on a number of grounds. Included in their grounds was the employer’s refusal to allow their external labour consultant to represent them at retrenchment consultations. The Court found this to be unfair and ordered the employer to pay each employee the equivalent of 12 months remuneration in compensation.
As the law appears to be clear in allowing employees external representation employers should comply with the law. They should then deal with their concerns of being outmanoeuvred by such employee representatives by hiring their own labour law expert to represent the employer.
Ivan Israelstam is the Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: firstname.lastname@example.org. Go to: www.labourlawadvice.co.za.