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Retrenchment When An Employer Employs More Than 50 Employees

7th December 2009

Dear Reader

THE APPLICATION OF SECTION 189A

Section 189A will be applicable when an Employer employs more than 50 employees and the employer contemplates dismissing, for its operational requirements at least:

  • 10 employees if the employer employs up to 200 employees;
  • 20 employees, if the employer employs more than 200, but not more than 300;
  • 30 employees, if the employer employs more than 300, but not more than 400;
  • 40 employees, if the employer employs more than 400, but not more than 500
  • 50 employees, if the employer employs more than 500 employees

The employer will issue a notice / invitation to consult in terms of section 189(3), just as per the retrenchment process to be followed when an employer employs less than 50 employees.  After the issuing of the notice, either party may request the CCMA to appoint a facilitator to assist in the retrenchment process and the consultation to be had in terms of section 189(2).

When a Facilitator is appointed:

When the CCMA facilitator is appointed, the employer is not allowed to dismiss any of the employees within 60 days of the issuing of the section 189(3) notification and in terms of section 189A (7) a trade union can give notice of a strike within 60 days after receipt of a notice of termination or can refer a dispute about the fairness of the reason to the Labour Court.
It is important to note that the union/employee must either refer a dispute to the Labour Court or strike, they are not entitled to explore both avenues.

When a Facilitator is not appointed:

When a facilitator is not appointed a dispute cannot be referred to either the CCMA or a Bargaining Council unless 30 days since the issuing of the section 189(3) notifications has lapsed.  Furthermore the employer can only give notification of termination after a period of 30 days have lapsed since the dispute referral has been received by the CCMA or Bargaining Council or a certificate of non resolution has been issued. Similarly a union can only give notice of a strike or refer a dispute about the fairness of the reason for the dismissal after the lapsing of 30 days after the CCMA or Bargaining Council has received the referral or a certificate of non resolution has been issued.

Disputing Procedural Fairness of a Section 189A dismissal:

The procedural fairness of a section 189A retrenchment can only be addressed by the Labour court by means of an application for an order in terms of section 189A(13).  Therefore the CCMA or a Bargaining Council does not have the jurisdiction to entertain a referral regarding the procedural fairness of the procedure followed by an employer that employs more than 50 employees.  In terms of section 189A(13) the Labour court can be approached for the following orders when the employer fails to comply with a fair procedure:

  • An order to compel the employer to follow a fair procedure;
  • An order interdicting or restraining the employer from dismissing an employee prior to complying with a fair procedure;
  • An order directing the employer to reinstate an employee until it has complied with a fair procedure or
  • To award compensation, if the above orders are not appropriate.

An application for any of the above orders must be brought within 30 days after the employer has given notice to dismiss the employees.

Disputing the substantive fairness (the reason) of a section 189A dismissal:

A Dispute regarding the fairness of the reason of the section 189A dismissal must be referred to the CCMA or relevant Bargaining Council.  The dispute cannot be referred unless 30 days since the issuing of the section 189(3) notifications has lapsed.  Furthermore the employer can only give notification of termination after a period of 30 days have lapsed since the dispute referral has been received by the CCMA or Bargaining Council or a certificate of non resolution has been issued.

If the dispute cannot be resolved at the CCMA or the Bargaining Council the dispute must be referred to the Labour Court for further adjudication in terms of section 191(5)(b)(ii).

In terms of section 189A (19) the court must find that the employees were dismissed for a fair reason if:

  • The dismissal was to give effect to a requirement based on the employer’s economic, technological, structural or similar need;
  • The dismissal was operationally justifiable on rational grounds;
  • There was a proper consideration of alternatives and
  • The selection criteria were fair and objective.

In summary Section 189A lays down the procedure to be followed by an employer who employs more than 50 employees and wants to retrench due to its operational requirements.  A facilitator can be appointed and the subsequent actions taken by either employer or employee will depend mainly on whether a facilitator was appointed or not.  Furthermore Section 189A makes a distinction between the referral of substantive and procedural fairness disputes and give employees recourse to either strike or refer a dispute to the Labour court regarding the fairness of the reason for the retrenchment.

Please contact us for advice and assistance should your employer embark on a section 189A process.

Me. L Bouwer
General Manager: Legal Assistance.

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 We Are Not The CCMA, Neither are affiliated to them. You may visit  the CCMA website on:
http://www.ccma.org.za/  Or contact their Call Centre 0861 16 16 16

 

For Further Information, Please See:

http://www.retrenchmentassist.co.za/index.php/ccma-representation/arbitration

http://www.retrenchmentassist.co.za/index.php/ccma-representation/dispute- resolution-process

http://www.retrenchmentassist.co.za/index.php/ccma-representation/conarb-process

http://www.retrenchmentassist.co.za/index.php/ccma- representation/concilliation

http://www.retrenchmentassist.co.za/index.php/ccma-representation/condonation

http://www.retrenchmentassist.co.za/index.php/ccma-representation/ccma- rules

 

Please Contact Us:

Please send an email to assist@retrenchmentassist.co.za with a brief account of your case as well as your contact numbers and we will contact you promptly, or sms "UNFAIR" to 33045.

We Are NOT The CCMA, neither are we affiliated to them. You may visit the CCMA website on http://www.ccma.org.za/  or contact their Call Centre 0861 16 16 16

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