An employer is allowed to retrench employees for ‘operational requirements’ based on the employer’s ‘economic, technological, structural or similar needs’.

Examples:

Economic Reason

The employer says the business is losing money.

Technological Reasons

The employer is getting a machine to do work that employees did by hand before, or the employer’s new machines need different skills to operate them than

the existing employees’ skills.

Structural Reasons

The employer is restructuring the business by combining two departments so has not further need for two Heads of Departments.