Section 189 of the LRA makes provision for termination of services based on operational requirements i.e.: retrenchment. Termination of employment based on operational requirements is one of the grounds recognized as a justifiable ground for dismissal as per schedule 8 of the LRA (Code of Good Practice).
Section 189 of the LRA makes provision for an employer to terminate services based on operational requirements as soon as reasonably possible, after all procedures and consultations regarding the retrenchment have been complied with, thus, such entails that employees may be retrenched within a week or two for example from the date when the employees likely to be affected received a notice of possible retrenchment as per section 189(3) of the LRA.
However, there is an exception to the above mentioned process, the exception to the abovementioned is when a retrenchment is deemed to be a large scale retrenchment as per section 189A of the LRA.
A large scale retrenchment is applicable in those instances where employers employing more than 50 employees anticipates dismissing employees by reason of the employer’s operational requirements as follows (Section 189A (1))-
(1) 10 employees, if the employer employs up to 200 employees;
(2) 20 employees, if the employer employs more than 200, but not more than 300 employees;
(3) 30 employees, if the employer employs more than 300, but not more than 400 employees;
(4) 40 employees, if the employer employs more than 400, but not more than 500 employees.
The number of retrenchments is calculated by adding the number of retrenchments over the previous twelve month’s period to the number of retrenchments currently contemplated.
The process to be followed with regards to notifying employees of a possible retrenchment remains the same as that of a retrenchment not based on a large scale. Employees must be notified in writing of the employer’s anticipation of retrenchments, and where after the employees likely to be affected and or their representatives are invited to a consultation meeting where alternatives to the possible retrenchment are explored (section 189(3) of the LRA).
The primary difference between a large scale retrenchment and a retrenchment that is not of a large scale is the time period in which the employee’s services who are likely to be affected may be terminated. A large scale retrenchment cannot be concluded in less than 60days from the date which employees received their notices of possible retrenchment. The LRA however provides in section 189A (8) that the 60-day period need not be applied with, but rather a 30-day period should be applied if a facilitator is not appointed to facilitate the process by either the employer or employees. However, it is safe to say that with all instances of a large scale retrenchment an employer rather waits for a 60-day period from the date which employees received their notices of possible retrenchment to lapse prior to terminating services based on a large scale retrenchment.
In terms of a large scale retrenchment either the employer or employees may apply to the CCMA, council or any other bargaining agent recognized by the LRA to facilitate the entire process between the parties. Alternatively, consensus may be reached to dispense with section 189A (7) and not use the services of a facilitator.
A large scale retrenchment makes provision for a party to refer a dispute to a council or commission regards retrenchment based on a large scale after a 30 day period has lapsed from the date which notice was given in terms of section 189(3), the Act further provides for a registered trade union or the employees who have received notices of termination to give notice of a strike in terms of section 64(1)(b) or (d), which section stipulates that employees may strike after a period of 30 days has lapsed from the date which the dispute was referred to the council, thus, whether a facilitator is appointed or not, a large scale retrenchment cannot be concluded in less than 60 days.
Therefore, based on the above it is of primary importance that employers take into consideration the time periods required to concluded a large scale retrenchment, and what a large scale entails in order for employers to avoid having to find themselves on the wrong side of the law, and in a position which might prolong the process which is already exhaustive on its own.
Article by: Lesego Nchabeleng
CEO Dispute Resolution Official – Pretoria