By Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawvideos.co.za
South African labour law makes it compulsory for employers that are contemplating retrenchments to first consult about this prospect before making any decision to retrench. Where the relevant employees belong to a trade union the employer is compelled to consult with that union on a number of issues, the most important of which is any means of avoiding job losses.
Where the employer has truly exhausted every effort to locate and contact the union without success it may consider the possibility of consultation with the employees/shop stewards directly. The question arises as to whether the employer should, after being forced to give up on a recalcitrant trade union, consult directly with the employees. In the case of Numsa vs Ascoreg (CLL Vol.12 July 2008) the Labour Court found that the employer could consult directly with the employees where the union refused to consult. However, the employer will need solid proof of such trade union refusal, as consultation with employees instead of their union is forbidden under normal circumstances.
In the case of NEHAWU vs SOS Children’s Village (Lex Info 12 September 2025. Labour Court case number JS 439/17) the employer retrenched 21 employees. Its legally established ground for retrenchment was the need to restructure. However, when the union requested documents relevant to the restructuring these were not provided. Furthermore, the employer concluded the retrenchment consultations with the employees in the absence of the union. The employer’s ground for excluding the union was the union’s unavailability for consultations.
In the Labour Court the employer appeared to switch its grounds for the retrenchment from restructuring to financial problems resulting from the withdrawal of a major donor. Although the employer was able to prove its financial difficulties the Court rejected this as a valid ground because it had neither been put to the employees nor to the union during the consultation process. In addition, the Court was not convinced that the union had been unavailable for the consultations.
As a result the Court found that the 21 retrenchments were substantively and procedurally unfair. It ordered the employer to pay each of the retrenchees 12 months’ remuneration in compensation. Even if the employees had been earning an average of R4000 per month this award would have amounted to more than one million rand.
The outcome of this case reinforces the need for employers to understand the law of retrenchment and to know how to apply the law in practice.
The innovative video series WALKING THE LABOUR LAW TIGHTROPE assists employers to provide their managers with very inexpensive training that allows the managers to achieve necessary knowhow at times suitable to their very busy schedules. Its 48 chapters, averaging 10 minutes in length each, can easily be watched at junctures when the manager has time. This greatly informative yet very engaging and practical video series provides crucial and user-friendly learning through the use of a stimulating, animated case study that runs throughout the 48-chapter series. Each chapter contains clear and important advice needed by workplace management on the basics of labour law over a very wide range of topics.
A further advantage is that the manager can, for a full year, easily go back to any of the 48 videos for purposes of refresher training or in order to access information on how to deal with a current workplace issue. This solves the problem of managers forgetting what they have learned.
This video series helps management to walk the shaky labour law tightrope and to run the workplace productively without falling into the labour law abyss.
To access our groundbreaking video series: WALKING THE NEW LABOUR LAW TIGHTROPE please go to www.labourlawvideos.co.za or contact Ivan on ivan@labourlawadvice.co.za
