What are the effects of retrenchment?

What are the effects of retrenchment?

Retrenchment can have a traumatic and emotional impact on the still-employed as well as those who have been laid off. The remaining employees may feel demotivated and insecure which can result in lower productivity within the organisation – especially if the retrenchment process hasn’t been handled appropriately.

Who is entitled to retrenchment benefits?

Employees who have served the company for at least 2 years are eligible for retrenchment benefit. Those with less than 2 years’ service could be granted an ex-gratia payment out of goodwill.

What are the two types of retrenchment?

There are three types of Retrenchment Strategies:

• Turnaround.
• Divestment.
• Liquidation.

Can you refuse retrenchment?

Of course, you can refuse retrenchment, which means the consultations have deadlocked. If you are the only person being retrenched, you can refer the dispute either to arbitration or to the Labour Court, irrespective of whether the retrenchment procedure complied with section 189.

What is the notice period for retrenchment?

If employed for less than six months – one week’s notice; if employed for more than six months but not more than one year – two weeks’ notice and if employed for more than a year – four weeks’ notice. Domestic and farm workers, who have been employed for more than six months, must receive four weeks’ notice.

Can I refuse retrenchment?

What is clear from the judgment is that an employer, in the context of a retrenchment exercise at least, may dismiss employees for refusing to accept a change to terms and conditions of employment, provided of course that the employer can demonstrate that there is a genuine operational need to change terms and …

What are three types of retrenchment strategies?

The three types of retrenchment strategies are Turnaround strategy, Divestiture strategy, and liquidation strategy.

What is retrenchment example?

Retrenchment is defined as cutting back or a reduction. An example of retrenchment is a company laying off employees to get back within budget.

Can you claim UIF if you are retrenched?

Employees who are registered with the Unemployment Insurance Fund (UIF) and who have been contributing to the Fund can claim. Can I claim from the UIF fund if I have resigned? You can only claim unemployment benefits if you have been dismissed or retrenched or if the contract has expired.

How can I stop being retrenched?

reducing wages (by agreement) early retirement offers or schemes. moratoriums on hiring new employees. gradual reduction of workforce by way of natural turnover.

Can a company hire after retrenchment?

In summary, there is no duty on an employer to re-employ a retrenched employee, nor is there a duty to enter into an agreement that provides for preferential re-employment. The employer is, however, obliged to discuss the possibility of re-employment during the consultation process.