When a company is looking at possible retrenchments, the retrenchment must be substantively and procedurally fair.
Substantive fairness refers to the reason for retrenchment and procedural fairness to the procedure to be followed i.e. consultation.
The most common reason for retrenchments usually stems from either closure of business, loss of a contract or decrease in sales. The employer must show that retrenchment is the only/last option.
Part of procedural fairness when the decision has been made to retrench is who to select to be retrenched.
According to section 189(7) of the Labour Relations Act, 66 of 1995 the selection criteria is to be agreed upon and if no agreement can be reached, the selection criteria must be fair and objective. The most common selection criteria which are fair and objective, as per Item 9 of the Code of Good Practice on Dismissals based on Operational Requirements, is LIFO (Last In First Out).
However, multiple cases confirmed that LIFO is not the only selection criteria accepted. Other selection criteria can be based on skill, knowledge, qualifications or a combination of same. In NUM & Others, v Anglo American Research Laboratories (Pty) Ltd [2005] 2 BLLR 148 (LC) the court found that past performance to see which employee has special skills required for the operational requirements of the business is fair and objective.
However, in terms of SA Breweries (Pty) Ltd v Louw (2019) 39 ILJ 189 (LAC) the court found that past performance ratings for staff interviewed for a new managerial post to try and take irrelevant factors into account in the selection process is an unfair selection criteria.
The selection criteria cannot be because of the employer’s dislike towards the employee nor his disability, race, gender, sexual orientation and the lot. The Employment Equity Act 55 of1998 protects people with disabilities against unfair discrimination. It further stipulates that an employer should ensure the selection criteria does not directly or indirectly unfairly discriminates against people with disability.
In conclusion, if the selection criteria are agreed upon or chosen by the employer and can be considered fair and objective; the person to be retrenched, happened to be disabled, it would be considered as fair.
About the Author
Yolande Iversen obtained her LLB Law Degree from the Nelson Mandela Municipality University in 2011. She embarked on her journey at SEESA Labour in August of 2011 as a Legal Assistant. She was promoted to the position of SEESA Labour Legal Advisor in 2014. In September 2017 she was selected to also be part of the SEESA Consumer Protection & POPI department.