Labour Matters, Davies Ndumiso Sibanda
THERE is a lot of confusion regarding the minimum retrenchment package and the law, with workers thinking that there is room for negotiation for its betterment and employers thinking it is not negotiable.
Section 12 C(i) of the Labour Act merely makes it obligatory for an employer who wishes to retrench employees to give written notice of his intention to retrench to the Works Council and if there is no Works Council other bodies can be approached as directed by the Act.
When the employer gives notice to the Works Council, he must provide a list of employees he intends to retrench and reasons for the retrenchment and a copy has to be sent to the Retrenchment Board.
Section 12 C(2) sets out the minimum retrenchment package in the event parties fail to agree on a better package.
My reading of the Act does not require parties to agree on package.
The minimum retrenchment package is one month salary for every two years worked.
The Retrenchment Board is merely notified of the intention to retrench once the employer complies with the minimum retrenchment package.
It would seem the worker has no recourse once the employer has complied with its minimum package even if he feels it is not good enough getting a higher package is at the employer’s discretion.
Only in cases where the employer alleges inability to pay the minimum retrenchment package, does the Retrenchment Board inquire into matters related to ability to pay as guided by provisions of section 12C(3) of the Labour Act.
There are workers who wrongly think that before retrenching, employers have to first implement measures to avoid retrenchment as set out in section 12D of the Labour Act.
That is wrong as the provisions of section 12D(2) read “Subject to this section, before giving notice of intention to retrench any employee in terms of section 12C, an employer MAY (my emphasis) agree with employees concerned . . .”
This clearly shows that application of measures to avoid retrenchment is not mandatory but desirable and cannot hold back retrenchment as long as the retrenchment is based on provisions of section 12C of the Labour Act.
Because measures to avoid retrenchment are not compulsory and have a cumbersome process, very few employers follow them as they fear being caught up in the complex legal process and at times the situation faced by the business will not be amenable to use of measures to avoid retrenchment.
This unfortunately leaves workers feeling unfairly treated as their capacity to negotiate packages above the minimum set in the Labour Act is dependent on the employer so is the institution of measures to avoid retrenchment.
In conclusion, workers have limited say in retrenchment, if the employer chooses to pay the minimum retrenchment package.
In fact, the amended legislation on retrenchment is harsh on labour.
Davies Ndumiso Sibanda can be contacted on: e-mail: [email protected] Or cell No: 0772 375 235