There has been an increase in the number of redundancies in various industries as many are simply keeping their heads above water, says Kristy Keating, a member of the executive committee of the South African Payroll Association (SAPA).
Keating said that despite assistance from TERS, UIF and other loan-based initiatives, increases in almost everything including fuel and imports are contributing to a rise in cuts as seen in the hospitality and beauty industries.
The minimum amount a person is entitled to upon dismissal is governed by the Basic Conditions of Employment Act or certain bargaining councils that have master agreements that correspond to different amounts, Keating said.
Based on Article 41 of the Act, an employee is entitled to one week of severance pay for each year of completed service.
Notice must be given prior to dismissal. Under section 37, the notice period is:
- One week for 6 months of service or less.
- Two weeks or between 6 months and one year of service.
- Four weeks for more than a year of service.
Interestingly, Keating said that if an employer does not want the employee to work the notice period, they still have to pay it. Keating said the employer is required to pay all accrued and unused annual leave and other payments due by the last working day.
The employer must also apply for tax guidelines for accrued payments as well as severance pay, Keating said. The employer under Article 42 must also issue a certificate of service. UIF documentation must also be provided to employees for the claim.
Keating said that the main reasons for which people are retrenched are for structural and economic considered ‘operational requirements, however, there is a new trend of ‘similar needs’ cases where employees refuse to comply with vaccination policy.
According to SAPA, the Labor Relations Act defines “operational requirements” as requirements based on the economic, technological, structural or similar needs of an employer.
Typically, operational requirements include measures adopted by the employer to cut costs or improve profits or to restructure its business or change the way its employees work, to meet an operational imperative, Keating said.
In Johnson & Johnson (Pty) Ltd v CWIU  12 BLLR 1209 (LAC), the Labor Appeal Court noted that in today’s world operational requirements do not always flow from the local needs of an employer, but can also arise from the impact of global developments on the profitability of the parent company of the South African subsidiary, said Keating.
Section 189 of the Labor Relations Act regulates layoffs or what are called layoffs based on operational requirements and sets requirements for employers regarding notices for consultation with employees as well as the actual consultation with employees, Keating said.
Similar needs of the employer
The issue of “similar employer needs” has also had its share, Keating said. She added that there have been emerging cases of ‘similar needs’ where employees refuse to comply with vaccination policies.
In SATAWU v Khulani Fidelity Security Services (Pty) Ltd (2011) 32 ILJ 130 (LAC) the Labor Appeal Court found that an agreement that requires certain employees to undergo polygraph tests was designed for operational reasons, namely to ensure that only people of proven integrity could be maintained in these positions. Passing such tests was therefore an operational requirement for the affected employees, Keating added.
To summarize, in the case there was an agreement designed for operational reasons, namely to ensure that only people of proven integrity could be retained in certain positions, Keating said.
The positions were also known to all the workers who were employed in them; that is, failure of the test led to termination of the post if related to an operational requirement.
Here’s what South Africans are entitled to after being withdrawn
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