Process for unfair retrenchment claims

With the current state of the economy, many companies are retrenching employees, giving rise to potential claims against those companies. The process for unfair retrenchment claims depends on a number of factors, and it is important to follow the correct process.

If the retrenchment process applies to a large number of employees (at least 10, if the employer employs 50 or more employees), any procedural fairness claim must be brought, in terms of section 189A of the Labour Relations Act, through an urgent application. That application must be brought in the Labour Court within 30 days of the notice of retrenchment being issued. If not, it can be brought together with a substantive fairness claim (a claim to challenge the reason for the retrenchment).

The first step in the process for unfair retrenchment claims (other than an urgent application to challenge procedural fairness in a large-scale retrenchment) is to refer a dispute to the CCMA for conciliation. This is done by completing LRA7.11 form (available from the CCMA website) and faxing it to the CCMA. The CCMA will then schedule a conciliation session to attempt to resolve the dispute through a settlement.

If the matter is not settled at conciliation then the next step will depend on the number of employees retrenched. In a scenario where only one person was retrenched, that person may refer the dispute to arbitration in the by completing the LRA 7.13 form (also available from the CCMA website) and faxing it to the CCMA within 90 days of conciliation being unsuccessful. Where multiple employees were retrenched it is necessary to deliver a statement of claim in the Labour Court to challenge the fairness of the dismissal. This must likewise be done within 90 days of conciliation being unsuccessful.

Where these timelines are not adhered to and a referral or statement of claim is delivered late, it must be accompanied by a condonation application which explains the reasons for the delay and deals with, among other things, the prospects of success of the claim.