Your handy retrenchment compliance checklist

1. Preliminary assessment
   1. Confirm retrenchment is due to operational requirements (economic, technological, structural).
   2. Determine if it’s a small-scale (Section 189) or large-scale (Section 189A) retrenchment.
2. Selection criteria
   1. Apply fair and objective criteria (e.g. LIFO – last in, first out).
   2. Avoid discrimination (age, gender, race, etc.).
3. Alternatives to retrenchment
   1. Explore and document alternatives:
      1. Reduced hours or pay.
      2. Redeployment.
      3. Voluntary retrenchment.
      4. Temporary layoffs.
4. Issue the notice
   1. Identify consulting parties (employees, unions, workplace forums).
   2. Issue a written notice inviting consultation, including:
      1. Reasons for retrenchment.
      2. Alternatives considered.
      3. Number and categories of affected employees.
      4. Selection criteria.
      5. Severance pay details.
      6. Assistance offered (e.g. counselling, job placement).
      7. Timeline and process.
5. Consultation process
   1. Consult with the identified parties.
   2. Allow sufficient time for meaningful consultation.
   3. Keep records of all meetings and communications.
6. Final decision and notification
   1. Notify affected employees in writing.
   2. Provide reasons and effective date of termination.
   3. Ensure notice period complies with the Basic Conditions of Employment Act (BCEA).
7. Severance pay
   1. Pay at least 1 week’s remuneration per completed year of service.
   2. Include outstanding leave, notice pay, and other entitlements.
8. Post-retrenchment support
   1. Offer emotional support (e.g. counselling).
   2. Provide job placement assistance or references.
   3. Issue UIF documentation (UI-19, UI-2.1, etc.).

For advice or more information, please contact Riona Kalua, head of our Labour and Employment team.