Navigating the second wave

Navigating compliance with retrenchment law during the second wave of COVID-19

Employers have to comply with the correct retrenchment process in the 2021 second wave of COVID-19 or they will find themselves in further financial difficulties, possibly having to pay compensation for non-compliance.

Written by Fadia Arnold, Attorney at Arnold Law Legal Consultancy, for LexisNexis South Africa

Introduction
Our nation is officially neck deep into its second wave of the COVID-19 pandemic. We have endured lockdown in various phases and various stages since March 2020. We will soon hit the nation’s COVID-19 one year anniversary, for lack of a better term. With the second wave’s substantially increasing infections and deaths due to the pandemic, 2021 may very well be an even more challenging year. There is no doubt that everyone has been affected by the pandemic in one way or another. Most notably, the pandemic has affected low-income employees who require their jobs to break even, which frequently they are unable to do. Furthermore, these employees require their jobs to feed their families and to keep a roof over their heads, often working for a minimum wage or having multiple jobs. Regrettably, it is a real possibility that many more retrenchments will occur in 2021 due to the pandemic.

Learning from your 2020 mistakes as a business owner
In 2020, a gargantuan number of claims for unfair retrenchments were referred to the Commission for Conciliation, Mediation and Arbitration (the “CCMA”), relevant Bargaining Councils or the Labourt Court, these retrenchments were a direct result of the impact of the COVID-19 pandemic on all business owners. In the rush for many businesses having to restructure, cut costs and trying to keep financially afloat during the pandemic, employers have hastily retrenched a large number of staff but failed to follow the procedure set out in the Labour Relations Act 66 of 1995 (the “LRA”) in respect of retrenchments. Though these employers may have had a fair substantive reason (loss of trade and loss of revenue) many of them did not follow the process as per the LRA. The consequences of non-compliance by an employer whilst retrenching staff in 2020 has led to an unprecedented amount of unfair retrenchment (unfair dismissal) referrals for compensation for lack of due process along with an employee being entitled to be paid one week for each continuous year worked. The law in respect of ordinary retrenchments has no loopholes and accordingly section 189 of the LRA must be complied with, regardless of the circumstances and in spite if these unprecedented times.

Complying with the retrenchment process in the 2021 second wave of Covid-19
Employers must comply with the LRA, or they will find themselves in further financial difficulties, possibly having to pay compensation for non-compliance.

The process is set out clearly in section 189 and 189A of the LRA. The retrenchment process includes consultations with employees and a joint consensus seeking exercise between the employer and the affected employees to consider all options to avoid retrenchment or at the very least mitigate the impact the retrenchment will have on any affected employee. In these circumstances, alternatives to retrenchment could include temporary remote working arrangements or utilizing short term measures of placing Employees on short time work. Employers should be proactive in engaging with their employees in respect of the aforementioned alternatives to retrenchment. Retrenchment should be the last resort.

What steps should an employee follow in an unfair retrenchment claim?
It is strongly recommended that retrenched employees utilize the services of an attorney who specializes in employment law to represent them. The attorney would assist the Applicant in properly completing the referral form and serving the referral on the employer and then filing the referral with the CCMA within the prescribed period of 30 days from the last working day or date of retrenchment, failing which the Applicant would have to apply for condonation for a late referral.

Conclusion
For those allegedly unfairly retrenched employees having trouble finding the forms, it can be downloaded from https://www.ccma.org.za/Advice/CCMA-Referral-Forms and the form required is titled “LRA 7.11: Referring A Dispute To The CCMA For Conciliation (Including Con-Arb)”.

Fadia Arnold
Arnold Law Legal Consultancy