Employment and Retrenchments due to COVID-19

6th Jul 2020

The health crisis caused by the COVID-19 pandemic has turned quickly into an economic crisis. As a result, everyone fears about the future – employers are afraid for their businesses, while workers are afraid for their jobs. Such uncertainty brings retrenchments to the table, as well as confusion if the procedure as outlined in the Labour Relations Act (LRA) still applies or not.
The simple answer is that, despite the currently applicable guidelines and directions related to employment in South Africa, the LRA still applies. That means that a retrenchment would be legal if:

a) the employer has a good reason to let employees go, and

b) the employer follows the retrenchment procedure set out in the LRA.

The first step for the employer is to ensure that the layoffs are truly necessary. If the layoff reasons are good enough, then the employer has to initiate a meaningful joint consensus-seeking consultation with the workers. Seeking a better solution for both sides is obligatory before opting for retrenchments.

These consultations shall begin at the moment when the employer starts to consider layoffs. If they start the consultations after making the decision, that’s too late and is in violation of the LRA.

Sometimes employers know that layoffs are hardly avoidable, nevertheless, they have to enter into consultations with an open mind in search of a solution in favour of both sides. Only when the talks show that it is impossible, the retrenchments can happen. That’s why employers should start talking to the employees and their unions as soon as
difficulties arise. If they wait to be hit by the crisis, it may be too late to make a sound business decision that may involve letting some employees go.

Whether you are an employer who struggles to save the business or an employee who has lost their job upon unfair procedure for retrenchments, contact us today for a consultation and we will present you with a way forward.