INDUSTRIAL RELATIONS AND LEGAL SERVICES
Retrenchments, shorttime and lay-offs – some important considerations Fortunately we are experiencing a slight economic upswing, after constrictions as a result of various local and global lockdown regulations in 2020 and 2021, however, considering the economic and business challenges that companies have had to face, on the back of the resultant restricted global economic activity, companies may be dealing with the severe constraints that force them to consider mechanisms to attempt to rectify the situation.
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any companies are having to adopt strategies to keep their companies viable, during difficult trading and economic times, and often companies are faced with little alternative but to implement strategies to reduce costs. Some of these strategies are not easy to implement and management only implements them as an option of last resort, and as an option to ensure the company survival.
The lessor used lay-off is easier to implement, and leads to the temporary unpaid suspension from work of employees from at least one week for up to 8 weeks. It is legally permissible to have more than one lay-off period, whether they run concurrently of not. Importantly this is not a termination but a unpaid suspension. There are no costs to implement the suspension, no severance pay and no payment made during the lay-off period.
The Main Agreement provides strategies which companies often consider during difficult times, these include:
Short-time is widely known and used as a means to avoid retrenchments and lay-offs, it is not complicated to implement and there are no costs associated to implement the short-time. The short-time allows the employer to reduce the days per week and/or the hours per day and employees are only paid for the hours that they work. In extreme situations of financial crises and where there is no work it is possible to reduce the working hours from 40 in a week to a minimum of 4 consecutive hours per week.
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Retrenchment – Annexure A of the Main Agreement Lay-off, including job rotation – Annexure A of the Main Agreement Short-time – Section 7 of the Main Agreement Flexible working time arrangements – Section 4 of the Main Agreement Exemption from wage increases and the leave enhancement pay – Section 23 of the Main Agreement
It must be noted that all of these processes include a notification and consultation process. Retrenchments as you know is a permanent termination from the work place and it can prove to be a very costly exercise once all the severance payments have been made.
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Obviously it is important to be fully aware of the procedures to be followed to implement these strategies and to ensure that they are implemented fairly according to the requirements of the Main Agreement. Seifsa provides a consultation service on all of these, whether over the phone, email or at your company, whether representing the company during these consultations or simply guiding the company and giving advice. Seifsa also provides a half day training course on these matters, whether conducted in-house at your company or at one of our public courses.
