Notice of retrenchment

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Posts: 17
Joined: 23 Jun 2009, 09:49

Notice of retrenchment

Unread post by danie1 » 12 Nov 2010, 18:35

Hi guys,

Your assistance would be gladly appreciated, I have a family member who has been employed in the steel and metal industry for the same company for the past twenty years. Today he got a notice of retrenchment and was told to come up with suggestions on how to solve the retrenchment situation. The problem is that they definitely will retrench one of the three people working in their current department. The one employee has been there for fourteen years, the other for twenty five and Himself for twenty. What do you suggest he do???? And finally should the retrenchment be the only option, how many weeks should he be paid for every year worked.

Thank you in advance for your help.

Many thanks,

Danie Van Niekerk

Posts: 549
Joined: 12 Jul 2010, 15:09

Re: Notice of retrenchment

Unread post by Renier » 14 Nov 2010, 15:17


If he is employed in the steel and metal industry, then he is governed by the Metal Engineering Industry Bargaining Council (MEIBC).

When an employer contemplates dismissing one or more employees for reasons based on operational requirements the employer must consult with the employee/ representative.
During consultation the parties should reach consensus on the following:
Appropriate measures to
avoid the dismissals;
• minimize the number of dismissals;
• change the timing of the dismissals;
• to mitigate the adverse effects of the dismissals;
• The method for selecting the employees to be dismissed; and
• The severance pay for dismissed employees.
The employer must disclose in writing to the other consulting party all relevant information, but are not limited to:
• The reasons for the proposed dismissals;
• The alternatives that the employer considered before proposing the dismissals; and the reasons for rejecting each of those alternatives;
• The number of employees likely to be affected and the job categories in which they are employed;
• The proposed method for selecting which employees to dismiss;
• The time when, or the period during which, the dismissals are likely to take affect;
• The severance pay proposed;
• Any assistance that the employer proposes to offer to the employees likely to be dismissed; and
• The possibility of the future re-employment of the employees who are dismissed.

In terms of retrenchment, the minimum severance pay is 1 week salary for every completed year of service. Severance packages are normally negotiated between employer and employee.

Since you are governed by the Metal Engineering Industry Bargaining Council (MEIBC), you should also consult and take notice of the METAL AND ENGINEERING INDUSTRIES BARGAINING COUNCIL COLLECTIVE MAIN AGREEMENT.

I attached a copy for your convenience.

Main Agreement

1. a. In the case of retrenchment an employer, subject to subclause (2), shall pay to each employee who is
retrenched, in addition to any other amounts to which he is entitled in terms of this Agreement on termination
of service, a severance payment of a minimum of one week’s wages for each completed year of service
with the same employer, together with the following:
i. pro-rata allowance(s) where applicable;
ii. pro-rata leave and leave enhancement pay; and
iii. an amount equal to the weekly employer contribution to any applicable benefit funds of which the
employee was a member at time of retrenchment -
Subject to the proviso that an employee who has more than six months service but less than a completed year’s
service shall receive a severance payment equal to one week’s remuneration.
b. An employer and any employee or employee representative shall at either’s request consult in good faith at
plant level with a view to reaching agreement on a higher severance payment than that stipulated in subclause
2. a. The procedure to be followed in the event of lay-offs, relocation or closure of an establishment, retrenchments,
redundancies and the operation of limited duration contracts of employment shall be as provided for
in Annexure A to this Agreement.
b. Where non-observance of the procedures provided for under Annexure A to this Agreement gives rise to a
dispute, such dispute shall be dealt with by the Bargaining Council in terms of its dispute resolution procedure.”
(substituted by Government Notice R.868 of 9 September 2005)

Best regards,
Renier Pieterse


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