Retrenchment – new company trend emerging


Retrenchment, a fear and gut wrenching term no employee wishes to hear.  It exacts the same level of fear as being fired in my opinion.  So what exactly is retrenchment?  According to the dictionary it is a noun meaning the reduction of costs or spending in response to economic difficulty.  However, I have come to realize that companies are now using this as an excuse and easy way to get rid of an employee they no longer find valuable.  A new trend is emerging.

I belong to a facebook group run by legal professionals where you may post a question and receive free legal advice.  They do invaluable service to a community at large who simply do not have the funds to pay a legal professional for advice before proceeding on a matter.  More and more I am coming across individuals posting their retrenchment experiences.  And there is a definite trend.  Whether you have been victimized by someone on a management level and had an inkling something is coming or if the whole process caught you by surprise; companies are resorting to retrenchment as an excuse to let an employee go they no longer want or need.  But surely there are legal procedures to follow you ask?  Ofcourse there is!  But there are loopholes.

Every country has their own particular sets of labour laws that both companies and employees need to abide by.  But, the minimum is often adhered to or in some cases not at all and you end up retrenched.  Then you seek legal advice and told to take it further.  In the country of South Africa, you are advised to approach the CCMA.  Council of Conciliation, Mediation and Arbitration.  The Commission for Conciliation, Mediation and Arbitration (CCMA) is a dispute resolution body established in terms of the Labour Relations Act, 66 of 1995 (LRA). It is an independent body, does not belong to and is not controlled by any political party, trade union or business.   But alas, this is not always successful.  Here is a story of just such a case.

Employee started at the company obviously with very high hopes.  As time goes on, employee learns the ins and outs of the position and steps up to the plate with a satisfied client, orders coming in, working weekends and basically trying their utmost to satisfy the ever increasing demands that management raises.  As in life, accidents happen and employee undergoes an operation and is booked off by the surgeon.  Looking back that is where the warning bells should have started ringing when said employee is called in and advised that they should really step up to the plate of being part of the team as being booked off for 2 weeks by the surgeon is not really justifiable seeing the Managing Director also underwent surgery but was back at the office within 2 days.  As the months roll by there is another ‘meeting’ or two with said employee about being a team player, taking on more responsibility, being told that they don’t really seem happy and the list goes on.  All this while employee is trying their utmost to ‘fit in’ so to speak in a very close knit little office clique.  Important to mention that not once was any of these ‘meetings’ documented.

Then the bomb hits when employee is called in, having to face the aforementioned statements once again, but this time is told that someone complained without any explanation or proof provided when asked.  The topics of discussion even goes so far as to include the statement that the employee really seems not to want to be a part of the team as they hardly say anything during lunch.  Absurd right?  Employee is given a counselling form (with none of the topics discussed verbally being noted and recorded) and responds in writing to the verbal statements made referencing to previous meetings, attaching proof of meeting deadlines and goals.  All seems well and management does not speak of the response letter nor calls employee in again.  A month after the response letter submission employee is advised that the Human Resource Manager is flying in for a meeting.  Employee asks whether they should arrange representation for themselves and is told that it won’t be necessary as they will only be discussing the response letter submitted in answer to the ‘counselling form’.  Employee meets with HR manager only to be told that the management of the branch wants the employee gone.  Yes, in those exact words.  Employee is given 3 choices: 1) go to CCMA but it will take months to resolve, 2) decide to stay on at the company and management will find a way to eventually fire said employee using any and all mistakes made as excuse and lastly 3) take retrenchment package offered and walk out same day.

Employee is bewildered and unsure on how to proceed.  This came out of nowhere as the impression given was that the HR manager was there to mediate.  On your permanent career record, is it better to be retrenched or fired?  Employee opts for retrenchment package thinking they can approach CCMA afterwards.  Employee is given a ‘Final Agreement Letter’ to sign.  Employee is escorted off the premises by HR manager same day.

Then employee approaches CCMA.  And this is where it gets really interesting.  Employee has everything in writing where representation was advised not important, all other proof of meeting deadlines and even assisting in landing a tender opportunity for said company a few weeks before retrenchment with a global company.  CCMA proceeds to advise that there is nothing much employee can do seeing as they signed the final agreement letter.  Employee states that it was an extremely stressful situation and felt under duress to sign the document seeing as the only other viable option open to them was stay on and work under stress that eventually they will be fired.  CCMA response?  Employee has to prove that management basically ‘held a gun to your head and forced you to sign the final agreement letter’.  What a joke!  CCMA also advises that should said employee decide to proceed, that because of the legal weight of the final agreement letter the commissioner that will oversee the case has a good legal standpoint to rule against employee and employee may even be held responsible to pay all legal, travelling and other costs incurred by the company to attend the CCMA meeting.  With only 2 months pay offered, employee opts not to proceed.  Asked if this can be handed to the labour court, employee is told that they can do so, but that the labour court has a lengthy roll of cases that has a waiting period of 2 years!  And there you have it.  Company successfully ‘retrenches’ an employee without meeting any legal procedures nor for the reason as stated in the literal meaning of retrenchment ‘reduction of costs or spending in response to economic difficulty’.  To add insult to injury, company employed another individual barely a week after retrenchment.  Only reason that this cannot be used to proceed in any legal capacity is because company new employee does not have the same job title.  A loophole in the system.

Now months later employee is still without employment and no money left to pay the bills. The situation is becoming dire.  There is no help legally.

Friends and followers.  You HAVE to read up and get yourself educated on your legal rights as an employee.  The above example is South African.  In this particular case, the signing of the final agreement letter is what nailed the coffin lid shut.  Do not get yourself into a situation from where you have no legal standpoint.  If you are in the slightest concerned that your legal rights are being undermined, seek legal advice BEFORE signing anything.  This devious, underhanded and sly way of getting rid of employees is becoming a trend, with legal staff and HR departments working hand in hand to waylay the unsuspecting and uninformed employee.

The current unemployment rate in South Africa increased in the second quarter of 2018 to 27.2 percent and likely to rise.  This means that a staggering 6.08 million people here in South Africa is jobless.

Do not become a part of the statistic.

Do you have a similar story?  Know someone that this happened to?  Would love to hear from you.  Leave a comment below and kindly share this post.  Together we educate and inform.


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