Retrenchment – the duty to consult

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Ivan Israelstam | Chief Executive | Labour Law Management Consulting | mail me |


Before making any decision to retrench employers are required to first consult with the union or affected employees on a number of issues, the most important of which is any means of avoiding job losses.

There reasons that retrenchment consultations may fail to take place or may fail to comply with the requirements include:

  • The employer was unaware of its legal obligation to consult with the employees/union or was not aware of the fact that the employees have joined a union. It is not likely that either of these reasons will suffice as an acceptable excuse for the employer’s failure to consult.
  • The trade union may be purposely delaying the consultation process. If a court finds that the union unreasonably delayed the consultation process by making unreasonable demands or failing to participate in consultations the courts may well refuse to find against the employer despite the implementation of retrenchments without proper consultations. In the case of Simelane and others vs Letamo Estate (CLL Vol. 17, July 2008) the Labour Court found that the trade union has a duty to cooperate and participate in the consultation process.

However, the law clearly gives the employer the onus of ensuring, as far as it possibly can, that proper consultations take place. Therefore, despite difficulties in getting the union to cooperate, the employer must do everything in its power to gain the union’s cooperation.

It is only where the employer has proved that the union has been unreasonably uncooperative despite the employer’s best efforts that the courts may excuse the employer for retrenching without union consultations.

The employer’s duty to consult before retrenching lies at the heart of the employer’s duty to ensure procedural fairness. Despite the numerous and varied obstacles to the achievement of proper consultations the employer is likely to find that failure to consult (or to consult properly) extremely costly from a legal point of view. On the other hand, where the retrenchments are delayed due to hold ups in consultations this could be equally as costly from a salary bill point of view.

Employers are therefore advised to obtain advice from a reputable labour law expert on:

  • The requirements of the law regarding retrenchment consultations
  • How to prepare for and conduct retrenchment consultations
  • How to overcome obstacles to legally compliant consultations without unduly delaying the completion of the retrenchment exercise.

 



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