Notification regarding possible retrenchments

If your company is facing a slowdown and it appears that retrenchments are inevitable there are steps that you need to follow before retrenching staff

In the first place, send a letter along the following lines to comply with the guidelines of the Labour Relations Act. Also use this checklist.

Notification regarding possible retrenchments

TO:          Trade Union officials
                All employees who are not union members
The company has been running at a loss, necessitating some form of restructuring in an attempt to rectify thesituation. Circumstances are such that management is obliged to give consideration to possible alternatives to retrenchment, and in the absence of alternatives, to the implementation of retrenchments.


A meeting will take place at which time information will be provided
Date Time


The following items will be discussed and consulted on:
1                    the current financial position of the company;
2                     the reasons for the proposed retrenchments;
3                    alternatives to avoid retrenchment;
4                    number of employees to be affected;
5                    selection criteria;
6                    date of terminations;
7                    severance pay;
8                    assistance to employees;
9                    re-employment.
At the meeting the following alternatives to retrenchment will be considered in consultation with yourselves:
1                    a moratorium on recruitment and appointment of new staff;
2                    a freeze on overtime work;
3                    a reduction in administrative expenses;
4                    early retirement;
5                    voluntary retrenchment;
6                    institution of short-time.
7                    mitigation factors;
8                    short time/reducing shifts.
Should our consultations prove that no alternative to retrenchment can be implemented with success, retrenchments of the number of employees and their job categories likely to be affected will be discussed. During these discussions, consideration will be given to the following:
1                    method used for selection;
2                    severance pay;
3                    notice pay;
4                    possible re-employment at a later stage;
5                    any assistance offered.
Please confirm the availability of at least two representatives from the union and two employees representing the non-union members on the suggested date for consultation.
Signature ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­____________

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