A facilitation process is a process that can be referred either by an employer or representative trade union of employees who are likely to be affected by a large-scale retrenchment process under section 189A of the Labour Relations Act.
In order to start the process, either party has to notify the CCMA in writing by completing the LRA 7.20 form within fifteen (15) days. The CCMA then needs to inform the parties in writing within seven (7) days of receiving the form of the name of the facilitator and the date of the first facilitation meeting.
The primary role of a facilitator is to manage the consultation process and the duty to consult still rests primarily on the employer, not on the facilitator. This includes an obligation to hold at least four facilitation meetings, unless consensus is reached at an earlier point in the process.
The success of the section 189A consultation process is largely dependent on the nature and quality of the information provided by employers. By making this information available as early as practicable, ideally, at the first meeting, it will enhance the effectiveness of the process. At the first meeting, the employer must be prepared to give a brief presentation as well as provide copies of certain documentation to the consulting parties and the facilitator.
The structure of the employer’s presentation should contain the following:
1) The reasons for the proposed dismissals – “Operational requirements” are defined in section 213 of the Act as the following needs to the employer:
- Structural or;
- Similar needs.
The definition is more fully explained in the Code of Good Practice on dismissals based on Operational Requirements.
An employer’s presentation should clearly illustrate which of the above factors apply to his/her business. If none apply, then the presentation should clearly illustrate what the reasons are and how they comply with the Act.
2) The alternatives which the employer considered before proposing the dismissals and the reasons for rejecting each of those alternatives. Some common examples of alternatives considered by parties can include:
- Restriction of hiring (freezing the filling of vacancies)
- Transfers, salary reductions, job sharing, temporary layoffs
- The Training layoff scheme
- Voluntary early retirements
- Restriction of overtime and reduction of normal working hours.
The possibility of retrenching employees is not a matter that an employer takes lightly, and throughout this process, the employer must continue to explore alternatives to avoid retrenchments.
3) The number of employees likely to be affected and the job categories in which they are employed.
The employer should provide details such as:
- The total number of employees in the company;
- The number of employees dismissed for operational requirements in the last 12 months;
- The number of employees likely to be affected; and the number of employees likely to be retrenched.
It is important to note that “employees likely to be affected” refers not only to employees who may be retrenched, but also to all other employees who may encounter changes as a result of the restructuring or downsizing exercise.
4) The presentation should disclose and discuss the proposed method for selecting employees for retrenchment, and employers are required to use fair and objective criteria in deciding which employees should be retrenched, and which should retain their employment. In this regard, it is important to note that although it is generally accepted that LIFO (Last In First Out) is the most objective and fair criterion, an employer is not obliged to use LIFO where its application could result in loss of skills or disrupt the business operations. The employer may, in the absence of any viable alternative, utilize the following selection criteria:
- Skill level;
- Geographical area;
- Any other fair selection criteria.
5) In this section, the presentation should deal with the timing of the proposed retrenchments. The details provided in this section will have to relate to the reasons and distribution of employees and the proposed selection criteria. Consultations are expected to take place over a period of 60 days. Once the consultation process has been exhausted, and in instances where retrenchments are unavoidable, affected employees will be provided with a 30 days’ notice of their dismissal. Whether employees are required to work out their notice period or not, will depend on the operational requirements of each employer.
6) Severance pay proposed. In this section, the presentation should deal with the proposed severance benefits to be paid and the reasons for this. Employers should consider any collective agreements in existence, affordability and past practice. In terms of Section 41(2) of the Basic Conditions of Employment Act, severance pay of one week for every completed year of service is prescribed. The employer can also propose that an employee shall not be entitled to severance pay if he/she has accepted an offer of suitable alternative employment with the employer; unreasonably rejected and/or fails to respond to an offer of suitable alternative employment with the company, or has reached retirement age and proceeds on normal retirement. Employees affected will be entitled to all outstanding statutory monies, including any accumulated leave pay. Here it will also be prudent to take note that some Bargaining Councils might have different stipulations regarding the calculation of severance packages.
7) Assistance offered to Employees. It is important to disclose what, if any, additional assistance will be offered to affected employees, for example:
- Preparations of CV’s;
- Completion of UIF documentation;
- Cost of counselling;
- Financial/investment advice;
- Completion of pension/provident fund documentation;
- Time off for attending interviews.
The parties are best placed to determine the relevance of certain documents for the purposes of meaningful consultations and should a dispute arise over the disclosure of information, the facilitator may rule on the issue.
Should parties reach an agreement in one of the facilitation meetings, then such is reduced to a settlement agreement between parties as to exactly what the retrenchment process will be, which employees are to be affected and what packages will be paid out and the time periods of the retrenchments.
However, should no agreement be reached after meaningful consultations in the form of facilitations between the parties, then an employer may terminate services of employees after 60 days has elapsed from the date employees were issued with notices of possible retrenchment as per section 189A, or the representative trade union may embark on a strike or refer a dispute to the Labour Court.
The CCMA has a great interest in ensuring employees are kept in employment, and thus an employer who employees more than fifty employees and anticipates terminating services based on operational requirements will have to make sure that necessary evidence is available as proof should a facilitator be appointed as per the provisions of section 189A of the Labour Relations Act.
Article by: Jacques du Toit
Dispute Resolution Official – Bethlehem