Retrench and Restructure – PART 1

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If the data is to be believed, retrenchments are once again on the rise. Lets not speculate why, but the current environment doesn’t induce business stability.

The level of retrenchments has not significantly declined since 2008. A “technical” recession has historically of course, also lead to job-shedding. It appears when presented with the possibility of the need for retrenchments or restructuring, the first thing many employers do is rush to their legal counsel to ensure that they don’t misstep in the process.

Legalities

Lawyers usually advise them to follow the strict letter of the law and follow a mechanistic tick-box approach by following the register (section 189 and 189A) in the Labour Relations Act (LRA), as a “to do” list when effecting such an exercise.

While of course this is also needed to ensure the “legalities” are adhered to, it regularly entirely omits the needed employee relations’ aspects, which is the tricky and challenging part. There is a need to adopt a carefully engaged and mapped approach when implementing the required steps.

The use only of this mechanistic approach then almost guarantees a legal challenge to the process, and can lead to some bizarre consequences. In one large retrenchment the advice was to give notice of potential for retrenchment to the entire workforce. Hence some 23 000 letters were generated and given to employees.

One can only but imagine what happened in the offices the day following the implementation of this advice.

In another example the relevant advisers were so focused on the recognised trade union (who in total only represented 22% of the identified (to be retrenched) employees), that they completely omitted to consult, notify or engage with a significant portion of their work force. In this case the net effect was a drawn out process with multiple disruptions. Both instances ensured legal disputes.

Benchmarks

The problem with this approach is that it…


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Read this article by Nerine Kahn, CEO, Employment Relations Exchange as well as a host of other topical management articles written by professionals, consultants and academics in the August/September 2017 edition of BusinessBrief.


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