Chase manhattan merger result in 12 000 employees losing their jobs and in. What you need to know about the law on retrenchment of employees. The employer must give fair reasons for making the decision to retrench and follow a fair procedure when making such a decision. Pdf rate of retrenchments is directly proportional to unemployment, which. The 60 day period in any large scale retrenchment commences once a notice in terms of s1893 has been issued. Where retrenchment plans are required by law clients should ensure that the retrenchment plan is in line with regulatory requirements. This occurs when the right procedure is not followed.
These are defined as requirements based on economic, technological, structural or similar needs of the employer. With a view to ascertaining the impact of retrenchment policies implicit in the structural. After having an income protection policy in place for six months, you qualify for the retrenchment benefit, and you wont be covered for any retrenchment process that begins within these six months. A phenomenological study into the experiences of retrenchment. Effects of retrenchment on organizational performance at. If you face retrenchment, you need to know what the law expects of your employer to ensure that the process is fair. Many units are scrapped as banks combine, either because they no longer fit into the strategic. By end of 2010, a total of 501 employees had been retrenched at eldoret telkom. Introduction retrenchment is the process by which staff is reduced to cull redundant employees and reduce the wage bill.
Retrenchment laws do not favour employers skills portal. Retrenchment might be caused by a number of factors. Retrenchment and restructuring labour and community. The law concerning retrenchment south africa clearly states the way forward for employees to deal with employers who do not follow the appropriate policy. A surplus of employees following a merger due to employees from. Refer the case to a necessary authority within 30 days after the retrenchment. To ensure the application of consistent, fair and legal staff redundancy procedures and retrenchment practices and the fair and equal treatment of all employees, taking account of the duty and right of the employer to balance staffing levels, business demands and changing economic, labour and. Rationalisation to shed surplus employees resulting from buyouts or mergers. Due to this and because the employer did not follow the proper retrenchment procedure the court. Telkom kenya tkl started retrenching in may 2006 in preparation for privatization. The retrenchment process affects a variety of stakeholders. This paper examines the effect of retrenchment on organizational performance based on a study conducted at the telkom kenya, eldoret branch over a 5 year period. Application the labour relations act applies to all employers, workers, trade unions and employers organisations, but does not apply to o members of the.
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