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Sections 189 and 189A of the Labour Relations Act 66 of 1995 provide for dismissals based on the operational requirements of the employer, or in short, retrenchment. This is why a retrenchment is often described as a dismissal that is due to no fault on the part of the employee. Indeed that is correct, as retrenchments are triggered by the technological, economic or structural requirements of the employer’s business.

In this article, we shall share insights into the main features of the procedures prescribed in Section 189 and Section 189A.

What is Section 189 and 189a of the Labour Relations Act?

At times it becomes inevitable for retrenchments to be implemented owing to various demands, indeed there are so many factors that cause businesses to experience a slump and resort to drastic measures in order to stay afloat. These factors may be caused by economic depressions, political upheavals, mergers and acquisitions and so on. The same is true even as technology advances in this age where a lot of business transactions are now being concluded in cyberspace. The ultimate effect is that some positions become redundant and if the employees cannot be accommodated in other departments of the business, they may end up being retrenched.

Both sections must be read in conjunction with each other. Section 189 of the LRA provides a basic framework for retrenchments whilst section 189A provides for added requirements e.g. minimum consultation periods, an independent facilitator of the consultation process, section applies where large-scale retrenchments are contemplated etc. However, both procedures are initiated by a Section 189 (3) notice which invites parties that are meant to be consulted as soon as a retrenchment is contemplated. These may be anyone who is supposed to be consulted in terms of a collective agreement, a workplace forum, a registered trade union or the employees likely to be affected. In the case of AMCU And Others v Royal Bafokeng Platinum Ltd and Others (CCT 181/18) the Court held that the employer not consulting or inviting a trade union representing the minority of employees is not in violation of section 189 (1) as the right to consultation does not extend to the right to be consulted individually. Therefore, it suffices if the employer consults with a trade union that represents the majority of the employees to be affected in terms of the ruling. As per the ruling in Aunde SA (Pty) Ltd v National Union of Metalworkers SA [2011] 32 ILJ 2617 (LAC), failure by the employer to consult with the affected employees or their representatives will render the process unfair.

What is the Section 189 Retrenchment Process?

The main feature of the procedure provided in section 189A of the LRA is that it applies where an employer who employs more than fifty (50) employees contemplates dismissing the following numbers of employees on grounds of operational requirements:

1. 10 employees, if the employer employs up to 200 employees;
2. 20 employees, if the employer employs more than 200, but not more than 300, employees;
3. 30 employees, if the employer employs more than 300, but not more than 400, employees;
4. 40 employees, if the employer employs more than 400, but not more than 500, employees;
5. 50 employees, if the employer employs more than 500 employees;
6. the number of employees that the employer contemplates dismissing, together with the number of employees that have been dismissed by reason of the employer’s operational requirements in the 12 months prior to the employer issuing a notice in terms of section 189(3), is equal to or exceeds the relevant number specified above

The requirements of Section 189A go further than the basic guide provided for in Section 189, for obvious reasons. There is no doubt that where big employers implement large-scale retrenchments, the impact is felt on the ground and its ripple effects are far-reaching. Consequently, there is far more consultation in terms of the Section 189A procedure than the Section 189 process. Further and in terms of Section 189A (3), either the employer, the consulting parties representing the majority of employees affected by the dismissal, or by agreement amongst/between the parties, may request a Commissioner from the CCMA to facilitate the consultation process upon giving notice. This is obviously meant to ensure that the process is fair, objective and that the necessary substantive issues are considered before the dismissals are implemented.

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