Section 1891 of the lra provides that, before retrenching, employers must consult any person whom the employer is required to consult in terms of any collective agreement that may be in force. The retrenchment policy helps to set out details such as the retrenchment procedure and the consultation process. The effects of performance and resources abstract growth has been described as the essence of entrepreneurship. Before the employer can retrench any employees for operational reasons, the firm must, in writing, consult with the employees, people in a collective agreement or workplace forum, and the registered trade union or the representative of the employees. Feb 23, 2017 the section 40 1 of the employment act, 2007 states where the employee is a member of a trade union, the employer should inform the trades union official representing the area where the employee works of the intended retrenchment and its extent by issuing a not less that 30 days notice prior to the intended date of termination due to redundancy.
In spite of that we are sorry to inform you that your service in this organization is. In the event an employer decides to retrench an employee, employees and or a group of employees, the employer is required to do the following. Consultation must take place with a workplace forum. Such pressure has compelled governments to conduct substantial cuts in government spending and services. Organizational ecologists theorize an inevitable progression from growth through maturity, revival, and eventually decline.
O disclose all relevant information on the intended retrenchment for the purpose of. Your guide to labour law in south africa labour guide. Throughout the last decades, globalization has turned into one of the most prominent topics on both the public and the political agenda. Over the past decade or more, leading academic foreign policy realists have argued for us strategic retrenchment.
Its an instant classic in explaining how we got to the present while also charting a new path forward for procedure scholars. Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include a voluntary. Retrenchment strategies are defined as a reduction of a firms assets and cost base mone et al. O give notice of any intention to retrench as soon as it is contemplated.
Administration or office by policy direction of the national executive. Ensure the retrenchment policy is available to all staff. If your business employs staff, this retrenchment policy can be used to address the risk of retrenchments in the organisation. It is defined in section 2 oo of the industrial disputes act, 1947. Cascio 2005 examined the relationships between changes. Referral to labour court if an employers retrenchment procedure is unfair, a consulting party may apply to the labour court, within 30 days after the employers notice, to order the employer to o comply with a fair procedure. However, the designing and implementation of its retrenchment policy has been strongly criticized by public issue of debate in the parliament and protested by employees agitation by employees. Dec 19, 2017 the retrenchment must be unavoidable and fair procedure is essential. Retrenchment and measures how to avoid retrenchment pdf. An employee who has the misfortune of being retrenched more. Retrenchment ccma, document, labour law, south africa, pdf.
Retrenchment strategies are also used to cut down operating expenses and reduce the size of the company for the betterment of the organization. Whilst these guidelines represent the companys standard approach to regulating these matters, these guidelines. This is the tendency for people to take out insurance only when the probability of. Consultation must take place as soon as the employer contemplates retrenchment. As mentioned above, any deferred compensation policy paid out or ceded to you at retrenchment will be taxed as normal income. Where retrenchment plans are required by law clients should ensure that the retrenchment plan is in line with regulatory requirements. According to the law, the employer is the one who is. Indian legal system civil laws industrial disputes act, 1947 procedure of retrenchment retrenchment. Create your own hr manual with way we do and turn static policies and procedures into active workflows. Where a position is identified as surplus to requirements, the municipality shall make every effort to provide alternative employment opportunities at a similar classification level and. Retrenchment definition of retrenchment by the free. Kenya labour law on redundancy corporate staffing kenya. Thus, aside from a purely legal distinction, the economic effects on the company are different and significantly affect the bottom line.
Retrenchment happens when an employer dismisses an employee due to changing priorities and operational needs of the business. Pdf the global financial crisis has leaded the world into downsizing of its various. This strategy can also be used to get a good stand in this competitive market. Retrenchment and restructuring labour and community. Retrenchment business essays essay sauce free student. Retrenchment strategy advantages and disadvantages wisestep. A quick guide to retrenchment tanzania introduction.
Effects of retrenchment on organizational performance at the. Disclose all relevant information on the intended retrenchment for the purpose of proper consultation. The retrenchment procedure as laid down in the labour relations act lra must be followed properly and in good faith by the employer. The client will implement a procedure which provides individuals with the right to challenge their selection.
Therefore, thequestion of complying with the procedure for retrenchment does not arise. Give notice of any intention to retrench as soon as it is contemplated. Intelligent spas newsletter subscribers save an extra 15% off this publication subscribe now to receive the discount code. The employer must also prove that heshe has shared with the targeted employees or their representatives all documentary and. Growth or retrenchment strategy choices for declining entrepreneurial firms. Government retrenchment and citizen participation in. Managing retrenchment international finance corporation. The employer must also prove that heshe has shared with the targeted employees or their representatives all documentary and other information pertinent to the retrenchment. In early 2014, the employer, respondent underwent a. Where a position is identified as surplus to requirements, the municipality shall make every effort to provide alternative employment opportunities at a similar classification level and salary, having regard to qualifications and experience. Spa operating procedures and policies manual intelligent. This option does not happen because a worker is at fault. The consultation is a process and not a onceoff meeting. The retrenchment must be unavoidable and fair procedure is essential.
Use the retrenchment policy and documents should you need to institute retrenchment procedures. Introduction retrenchment is the process by which staff is reduced to cull redundant employees and reduce the wage bill. Retrenchment process and procedure quicklaw guide legalwise. Retrenchment is the process by which staff is reduced to cull redundant employees and reduce the wage bill. Impact of the retrenchment on the company there are some negative results of retrenchment in company and also on the employee relationship. The findings revealed that many of the retrenchment awards were made against the employers due to the retrenchment exercise which violated the relevant statutes and the established procedures.
The retrenchment provisions in the lra require an employer to consult with a person that it is required to consult with in a collective agreement and only if there is no such a agreement must the employer consult according to the hierarchy of consulting parties set out in the lra. Many employers, particularly in smaller retrenchments, are prepared to make an additional ex gratia payment to an employee in full and final settlement of all claims relating to the employees termination of employment in order to obtain finality and to avoid the costs and time involved in litigation. Title retrenchment and measures how to avoid retrenchment description retrenchment is nothing but a dismissal for operational reasons, which can include a variety of reasons such as the financial decline of a business, an employer deciding to increase profits of his business or a part thereof, the introduction of new technology that results in a decline in positions or structural changes such. The lra requires that consultation must take place when the employer contemplates retrenchment. Maggie gunning was a major contributor in the development of intelligent spas spa operations manuals, providing valuable practical insight into the many procedures and work flows to achieve high quality, international standard resources, designed to enable spas to effectively implement the knowledge. Formats 8 retrenchment letter template south africa excel word pdf doc xls blank tips. In tanzania retrenchment is provided for under section sect 38 of employment and labour relations act, act no. Retrenchment is a strategy designed to reduce a countrys international and military costs and commitments. For the recession has made largescale retrenchments a contentious issue for the employer, trade union and employee. Despite many countries and organizations adopting retrenchment as a management strategy, a bulk of retrenchment related literature is based on the results of studies conducted in the united states. Retrenchment procedure in the event an employer decides to retrench an employee, employees and or a group of employees, the employer is required to do the following. The employer must give fair reasons for making the decision to retrench and follow a fair procedure when making such a decision. It is essential for the employer to follow the correct retrenchment process as well as the cutback policy.
Category lra forms sub category ccma document type forms filename retrenchment ccma. Wherethe workman was engaged on casual basis without a written service contract or letter of appointmentfor doing a particular urgent workhis service, automatically came to an end when the work was over and there was no retrenchment. The strategy of retrenchment and its consequences foreign. Rights and retrenchment is a scholarly lightning bolt, mixing rigorous empiricism and close, institutionlevel analysis of civil rulemaking in a field that has too often lacked either. Retrenchment correct procedure when retrenching workers. Procedure of retrenchment and compensation calculation. The kenyan employment act 2007, defines redundancy as the loss of a job or occupation through no fault of an employee, happening mostly where the services of the said employee are no longer needed. If, however, you cede the deferred compensation policy to an approved retirement fund, the transfer will be tax free. These are defined as requirements based on economic, technological, structural or similar needs of the employer. Employers must notify mom within 1 week for any costsaving measures that affects employees salaries. You have been a valuable employee to this organization since long. Retirement lump sum table taxable income from lumpsum benefits rate of tax not exceeding r500 000 0%.
Retrenchment definition and meaning collins english. Page 2 of 7 the company has developed guidelines, which will be tabled for discussion and consultation during the consultation process. Retrenchment ccma description information sheet by the ccma on retrenchment consultation must take place as soon as the employer contemplates retrenchment. Jul 05, 2019 however, the designing and implementation of its retrenchment policy has been strongly criticized by public issue of debate in the parliament and protested by employees agitation by employees. Page 3 of 7 b temporarily suspending recruitment i. Retrenchment is the termination of an employee, employees or group of employees due to an operational requirement. These are defined as requirements based oneconomic, technological, structural or similar needs of the employer. Employers should consider alternatives such as redeployment and temporary layoffs. The reason retrenchment cover is not widely offered can be summed up in a word insurers dread. Learn more about the retrenchment process in sa here. While policy makers have attempted to build a strong civil society to compensate for the declining government role, previous studies have not examined the link between government retrenchment and citizen involvement in volunteering. All employees feel safe and secure when there are effective hr policies and procedures in place within the organization they work for.
The retrenchment strategies mainly acts on two factors, they are. Effects of retrenchment on organizational performance at. Separation pay for retrenchment is equivalent to onehalf 12 month pay for every year of service, a fraction of at least six 6 months being considered as one 1 whole year, if hisher separation from. This policy aims to minimize retrenchment by ensuring a fair redundancy process. The solution to the retrenchment process is to acknowledge but not overreact. Lastly, many employers, given a free hand, would select. May 24, 2017 the section 189 retrenchment process in terms of the labour relations act section 189 of the labour relations act lra permits employers to dismiss employees for operational requirements. If an employer gives notice of retrenchment before the above periods have elapsed, workers may give notice to strike. She has spent almost 30 years helping spa owners, investors, hoteliers, designers, project. Pdf on jan 1, 2010, dr balakrishnan muniapan and others published muniapan, b. Termination due to retrenchment lawyers in the philippines. Intelligent spas comprehensive sop manual is designed to improve the efficiency and effectiveness of your business practices, aiming to generate incremental revenue, improve profitability and maximise return on investment. Your service has been up to the level of our expectations.
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