How long is an employer expected to consult with an employee in a retrenchment process?

19 October, 2016 by admin in news

Section 189A of the Labour Relations Act, 1995 dealing with large scale retrenchments sets out time periods to consult.  However, with regards to retrenchments which fall outside the ambit of section 189A, we are often asked how long should an employer consult with an employee especially when an employee deliberately tries to delay or prolong the consultation process.

 

Another issue flowing from this and which employers often struggle with is whether it is obliged to consult for a prolonged period of time in an attempt to persuade an employee to accept an offer of alternative employment?

 

The Standard Bank of South Africa Ltd and Angelina Letsoalo (Case No. JA 18/2014) has some interesting facts.  The issue was whether the employer consulted properly before it retrenched the employee.

 

When the employee’s role was identified as non-critical, the employer engaged with the employee including assisting her to find other employment internally and with other banks.

 

The employer offered the employee an alternative position.  However, the alternative position was at a lower grade and salary than her then current position.  The parties consulted about the alternative position and the employee indicated her reluctance to take the position because of the pay cut.

 

Two consultative meetings ensued where the issue of her remuneration was discussed.  However, the parties had irreconcilable views on this matter and the employee was eventually retrenched.

 

The Labour Appeal Court found that the two consultative meetings were sufficient and that the issue of remuneration had been sufficiently canvassed, despite the fact that no consensus had been reached.

 

Our view is that certainly the law does not envisage that an employer should consult ad nauseum with an employee until an agreement is reached on relevant issues.  There is no requirement to actually reach consensus.  It is not a negotiation that requires agreement.  The employer must certainly show a genuine attempt to reach consensus on relevant issues.  In theory then a proper consultation could be conducted in a single meeting if the employer has properly canvassed the relevant issues.

 

Once the employer has made what it believes to be a reasonable offer of alternative employment then it must consult on issues such as remuneration, status and job security.  However, it is not obliged to consult for a prolonged period of time in an attempt to persuade the employee to accept such offer.