The retrenchment processes and procedures in an Eastern Cape motor manufacturing company

Previously, the Labour Relations Act made it compulsory for the employer to consult on appropriate measures to avoid, minimise and change the timing of dismissals, mitigate the adverse effect of the dismissals, the method for selecting the employees to be dismissed, and severance pay for the dismissed employees. The Labour Relations Act 66 of 1995 (LRA) specifies the steps that must be followed when they consider dismissing employees for reasons based on the operational requirements of their business. The necessary and appropriate steps to be followed for dismissal for operational reasons are contained in Section 189 of the LRA. Before an employer can start the retrenchment process, he/she is required by law to give a written notice inviting the other parties to consult and the employer must be prepared to disclose all relevant information. The new law that governs disclosure states that if an arbitrator or the Labour Court is required to decide whether or not information is relevant to the proposed retrenchments, the onus is on the employer to prove that any information that it refuses to disclose is not relevant for the purpose for which it is sought. It is also provided that if a consulting party makes any representation to the employer in writing, the employer must respond in writing. In terms of Section 189A (19) of the LRA clear guidance is given as to when will a fair reason be granted to dismiss for reasons based on operational requirements. This Section, further suggests that the Labour Court must ascertain that an employee was dismissed for a fair reason if: the dismissal was for requirements based on the employer's economic, technological, structural or similar needs; the dismissal was operationally justifiable on reasonable grounds; there was a proper consideration of other options to save job loses; and criteria used for selecting people for retrenchment were fair and objective. This is a much stricter test for substantive fairness than was previously applied. The aim of this study is to determine whether the retrenchment processes and procedures practiced in the motor manufacturing company in the Eastern Cape are compliant with the legislative framework. The company policy was examined against the literature available and the retrenchment processes of different authors were investigated. For the purpose of this study, the researcher used a structured self-administered questionnaire to collect data from the respondents. The questionnaire was delivered by hand to each respondent and collected later. The questionnaire was carefully designed considering the main components and aspects of dismissal for operational requirements as revealed in the theory. The results of the empirical study revealed that the company conducts fair and proper retrenchment processes and procedures, consults with all the relevant stakeholders, follows the right consulting process when it contemplates dismissing employees for operational requirements, uses fair selection criteria and does not unfairly discriminate against employees based on arbitrary grounds. In respect of disclosure of information, the respondents were aware of what information is shared and disclosed and for what purposes. The findings indicated that the majority of the retrenchment processes and procedures applied in the motor manufacturing company in the Eastern Cape are in line with the best practise and compliant with legislative framework. Based on the findings of the study, the researcher recommends that the employer should create awareness and educate employees on the importance of the dimensions related to retrenchment processes and procedures whenever the company embarks on dismissal for operational requirements