Davies Ndumiso Sibanda
With the coming into effect of the amended Labour Act No. 5 of 2015, the disciplinary process has become complex, expensive and an open ended liability for those organisations without in-house codes of conduct and has made retrenchment a cheaper option and prudent business for employers.
The unintended consequences of the amended Labour Act are that it has given employers a cheaper avenue for terminating contracts where the employer wants to avoid the cost associated with lengthy disciplinary processes.
Recently I talked to an employer who was very unhappy with the dispute resolution mechanism. He dismissed an employee and took him through the internal disciplinary hearing.
The employee appealed internally and the appeal was dismissed of which he then approached the Ministry of Labour for conciliation.
At conciliation the parties did not agree but both parties agreed to go for arbitration.
However, the Labour Officer said there were no arbitrators and as such he was going to rule on the matter.
He subsequently called the parties to make submissions which they duly did.
On the day of the oral hearing, a number of legal questions arose which complicated the whole process and among the issues that arose was why we should deal with the matter when both parties had exercised their legal right to have the matter arbitrated as set out in section 93(1) of the Labour Act.
Thereafter the Labour Officer referred the matter to the Labour Court where the employer had no choice but to engage lawyers because he was not familiar with court processes.
The employer’s lawyers at the Labour Court drilled a number of holes into the Labour Officer’s submissions and also questioned why he should go into the arena as a litigant.
The Judge concurred with the lawyers and the Labour Officer was ordered to put his paper in order and thereafter follow due process if he still wanted to pursue his case.
To date the matter has not been concluded and has caused the employer a lot in terms of time and legal advice.
The employer on calculating the cost. It could have cost him $800 to retrench the employee, on a case that has now cost $4,500 in direct expenses on legal advice and representation and the cost is likely to increase and could consume more time for the employer.
There are many employers who are in the same predicament who are now regretting why they took the disciplinary route instead of the retrenchment route.
On the other hand, retrenchment is much quicker and easier a process especially for those organisations who are not financially sound as it is all about paying the employee three months’ notice and sweetening it by making the employee not to work the three months and thereafter pay one month salary for every two years worked and make sure that the retrenchment is secured through getting approval from the Retrenchment Board.
The golden rule is that never settle a retrenchment without the approval of the Retrenchment Board otherwise the whole process will be declared a nullity.
In conclusion, the sad thing though is that this is an evil method of managing workers which has been imposed by badly crafted legislation on employers and unfortunately as things stand, workers will continue to suffer from the injustices of the legislation.
Davies Ndumiso Sibanda can be contacted on: Email: [email protected]
Or cell No: 0772 375 235