A number of employees are retrenched from a large paper factory. They are unhappy about the way they were treated. Many of them have over ten years service with the business.

What Does the Law Say?

The Labour Relations Act says that a retrenched employee must be paid at least 1 week’s wages for every full year that the employee worked for the employer.

This severance pay is money paid to an employee for losing a job, when the employee is not at fault. If employees were not paid severance pay or were paid too little, they have a clear right which must be enforced.

The LRA sets down rules for employers who want to retrench employees. If the employer does not follow these rules, then the employer can be guilty of an unfair dismissal.

The Labour Court will not readily reinstate employees who were retrenched if the employer can show that it was absolutely necessary to retrench those employees. But if the employer did not follow the correct procedures, the Labour Court can order the employer to pay compensation money to the employees.

(See: Retrenchment or Redundancy Dismissal)

What Can You Do?

Find out from the employees if they want their jobs back or to get compensation for losing their jobs, or if they only want to claim severance pay. Consider all the guidelines for retrenchment given above. You may believe that the retrenchment was unfair, or that the procedure the employer used to retrench the employees was not correct.

The matter must first be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) for conciliation.

(See: Conciliation by the CCMA or Bargaining Council)

If Conciliation is Unsuccessful

If the employees want severance pay, then the case must be referred to the CCMA for arbitration.

If employees want compensation or to get their jobs back, then the matter must be referred to the Labour Court for adjudication.

(See: Arbitration by the CCMA or Bargaining Council) (See: Adjudication by the Labour Court)