Retrenchments have unfortunately become a common occurrence as SA battles sluggish growth and low business confidence. Companies should ensure they handle the process in a way that does not make it even more traumatic, says Arlene Leggat, the president of the South African Payroll Association.
She has the following advice:
• The Basic Conditions of Employment Act gives clear guidance on how to calculate the severance package. Talk to staff as soon as the issue is on the table;
• Keep employees informed about the process, including about why the company is retrenching, the alternatives, if any, and why certain people have been chosen;
• Under the act, employees must be paid at least one week for every year of completed service. "It is important to make sure that if the company is acquired by another firm that your contract of employment states that your years of service prior to the takeover will be taken into account," she warns, and;
• There are many issues to consider to ensure the process is followed correctly, but it does not have to be acrimonious. "Engage in a transparent manner to find solutions that will work for everyone. It is possible," says Leggat.
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