The Labour Court is required to ask three key questions when deciding whether a retrenchment is fair:
· Did the employer follow the statutory retrenchment consultation procedure ?
· Did the employer have a genuine and fair operational reason for deciding that retrenchments were necessary?
· Did the employer apply legally acceptable criteria for deciding on which employees to retrench?
The courts are tightening up on the reasons for retrenching and for selecting who should be retrenched. For example, in the case of FAWU vs SA Breweries Ltd (Contemporary Labour Law Vol 14 No. 2 September 2004) the employer retrenched employees after a major reorganisation in the way that work was done. In order to establish whether these employees had the required skills to work in the changed jobs the employer applied, amongst others, an ABET (Adult Basic Education and Training) test. Certain employees who failed these tests were selected for retrenchment. The Labour Court found that:
· Retrenchment can be seen as a “death penalty” for employees
· Therefore the employer must prove that retrenchments are “a last resort”
· The ABET levels were not a valid test of the retrenchees’ ability to work in the newly created jobs.
· SAB had not taken adequate steps to assist the employees to obtain the desired ABET skills levels
· The retrenchments of these employees was unfair.
Employers need to learn form the above case that:
· The law keeps changing and employers need to keep up with these changes
· Retrenching employees is becoming harder and harder
· The biggest, most powerful and most experienced of employers can lose in the Labour Court. Therefore, no effort must be spared in ensuring legal compliance
· The need to apply labour law expertise is not a luxury but a basic necessity
· Such expertise must be applied before a retrenchment decision is made.