Human Resources Manual Phatshoane Henney inc. 2008

Transcription

1 Human Resources Manual Phatshoane Henney inc

2 P a g e 2 o f 8 1. PURPOSE 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 technology standards. 2. PRINCIPLES To effectively regulate the interaction between the employer and employees in respect of potential staff redundancies. To ensure the standard and consistent application of retrenchment procedures which comply with the Labour Relations Act 55 of 1996 (LRA) to potential staff redundancies. To provide for effective communication and consultation between the employer and affected staff in respect of staff redundancies. To ensure fair, equal and consistent treatment of all employees. 3. REDUNDANCY/RETRENCHMENT PROCEDURE 3.1. GENERAL The employer recognizes the need to afford its employees maximum job security and shall endeavor to avoid retrenchment or redundancy of employees where it is practically and reasonably possible. Retrenchment/Redundancy will be used as a last resort to ensure continued functioning of the company or any of its divisions/functions/units on a basis of sound and responsible management of the business. It is recognized that the employer may terminate an employee s service for reasons relating to operational requirements of the employer s business. The term operational requirements refers to economical, technological, structural or similar reasons which may lead to redundancy or retrenchment DEFINITION Retrenchment may occur if and when the business activity of the employer decreases due to a deterioration of its economic and financial position resulting in organizational changes whereby certain positions in the employer may need to be eliminated due to sufficient work not being available to sustain all employees, necessitating a cut-back of the workforce.

3 P a g e 3 o f 8 Redundancy shall mean the reduction of staff on a permanent basis due to the operations of the employer, or a part thereof, closing down or undergoing change, or due to any of the following: A relocation of facilities / units. Technological or technical changes. Mechanisation. Mergers and takeovers. Other events which the employer deems to be of a serious nature, necessitating the redundancy of employees NOTIFICATION OF CONTEMPLATED RETRENCHMENT/REDUNDANCIES The first step in the retrenchment process is to inform any relevant trade unions of issues arising within the employer and which may make it necessary to evaluate staffing levels. If no registered trade union exits at the workplace, the employer must notify the potentially affected employees utilizing available employee communication structures MEASURES TO AVOID DISMISSALS DUE TO OPERATIONAL REQUIREMENTS The employer commits itself to consider wherever practically feasible any alternatives prior to the implementation of any retrenchment/redundancy in order to attempt to avoid or minimize the impact of such action. In consultations with employees and the relevant stakeholders or employee representatives, the employer will consider all possible and practical means for avoiding the proposed termination(s) of service. While it may not be possible or practical to avoid retrenchments/redundancies, the following will be considered prior to a decision to terminate: Reducing staff numbers through natural attrition. Temporarily suspending recruitment. Providing adequate in-service or external training to existing staff in order to equip them for appointment/transfer to other suitable posts within the company. An offer of internal transfer not necessarily at the same job/salary level. Voluntary resignation with possibly full or reduced benefits.

4 P a g e 4 o f 8 (vi) The possibility of individuals working short time at proportionately reduced salary levels. (vii) Extended unpaid leave or temporary lay-offs. (viii) Other proposals advanced by the appropriate representative bodies. (ix) (x) The abolition or limitation of new appointments. Early retirement. (xi) Short time. (xii) (xiii) No casual employees. Dismissing temporary or contract employees, or non-renewal of their contracts. (xiv) Voluntary retrenchment. The above list is not exhaustive and other aspects may also be considered to avoid actual retrenchment/redundancy, subject always to the ability and practical implications of implementing such alternatives PROCEDURE Notice to relevant parties After the above alternatives have been considered, and discarded as not being viable, notification should be sent out to any potentially affected employees and their trade union representatives, informing them of the potential for retrenchments, the reasons therefore, and inviting them to consult with the employer. Non-unionised employees may nominate employee representatives to represent them at this consultative forum. The employer undertakes to give all relevant parties (unions and affected nonunionised employees) reasonable notice of any potential impending retrenchments. At this stage, proposed dates for consultation should be forwarded to the other parties Disclosure of information The employer will disclose all relevant information required by law, including, but not limited to the following: The reasons for the proposed retrenchments. The alternatives that The employer considered before proposing the dismissals, and the reasons for rejecting each of those alternatives.

5 P a g e 5 o f 8 The number of employees likely to be affected and the job categories in which they are employed. The proposed method for selecting which employees to dismiss (eg. last in first out etc.). (vi) The time when, or the period during which, the dismissals are likely to take effect. The severance pay proposed. (vii) Any assistance that the employer proposes to offer to the employees likely to be dismissed. (viii) (ix) The possibility of future re-employment of the employees who are dismissed. The number of employees employed by the employer. (x) The number of employees that the employer has dismissed for reasons based on its operational requirements in the preceding 12 months. The employer will not disclose of information that - is legally privileged; that the employer cannot disclose without contravening a prohibition imposed on the employer by any law or order of any court; that is confidential and, if disclosed, may cause substantial harm to an employee or the employer or the employer clients; or that is private personal information relating to an employee, unless that employee consents to the disclosure of that information Consultation Consultation will take place in good faith, and with the intention of finding alternatives to retrenchment where viable, reasonable and practical. Any decisions taken will be deemed to be in the best interests of the employer and its employees. The employer and the other consulting party/parties will endeavor to engage in a meaningful joint consensus-seeking process and attempt to reach consensus on appropriate measures: To avoid the dismissals; To minimize the number of dismissals; To change the timing of the dismissals;

6 P a g e 6 o f 8 To mitigate the adverse effects of the dismissals; The method for selecting the employees to be dismissed; and (vi) The severance pay for dismissed employees. The employer will allow the other consulting party an opportunity during consultation to make representations about any matter dealt with above as well as any other matter relating to the proposed dismissals. The employer should clearly indicate to employees that any employee unreasonably refusing an offer of alternative employment offered by the employer prior to retrenchment may not qualify for the severance package. The employer will consider and respond to the representations made by the other consulting party and, in the event that the employer does not agree with them, The employer will state the reasons for disagreeing. The employer will respond in writing to any written representations made by the other consulting party/parties. An agenda will be set up for each consultation session to facilitate discussions and to keep the parties focused. It may also be more practical to split the topics up into different sessions, again to enable the discussion to remain focused. At each meeting, dates for subsequent meetings should be scheduled and full minutes should be taken Selection The employer will endeavor to select the employees to be dismissed according to the following selection criteria: That have been agreed to by the consulting parties; or If no criteria have been agreed, criteria that are fair and objective Confirmation of retrenchment/non-retrenchment and counseling Once the consultation process is concluded, certain decisions will have been taken by the employer. These decisions will be: Whether reduction in staff is in fact necessary. 1 Specific criteria can be inserted here if the employer so requires eg, LIFO, FIFO etc.

7 P a g e 7 o f 8 If it is necessary, what form the reduction will take that is, will current employees be trained to fill suitable vacancies where possible, will they be retrenched; will eligible employees be placed on early retirement or disability retirement? How many employees will be affected and how these employees will be selected. When retirements / retrenchments will take place. What the severance package will be. Notification must be sent to all the potentially affected employees informing them as to whether or not they are in fact going to be retrenched based on the outcome of the consultation. Unions and/or nominated employee representatives will be provided with a list of employees the employer plans to retrench at least 4 weeks prior to the proposed retrenchment date. Employees selected for retrenchment will be notified at least 4 weeks in advance on certain financial aspects such as investment options for the retrenchment package Severance Pay Those employees who will be retrenched must receive a severance package, unless they have unreasonable refused suitable alternative employment offered by the employer. Retrenched employees will be paid severance benefits equivalent to those they would ordinarily have received in the case of resignation, as well as a severance package. The severance package will be discussed and finalized through consultation, but will be a minimum of 1 week s salary for every completed year of continuous service as a permanent employee, as per the Basic Conditions of Employment Act, The severance package will be made up of the following: Notice Pay (the notice period may be worked by employees or not, depending on the needs of the employer). Notice will vary between 1 month or 2 weeks depending on length of service of each employee. Leave Pay (any outstanding annual leave balance). Severance Pay (Minimum of 1 week s salary for every completed year of service). Retirement Fund Withdrawal (as per the rules of the Provident fund). Any severance pay paid to an employee, shall be over and above all monies contractually due to such an employee. Continuous Service includes time spent working at other companies in the group (where the employee has been transferred without any break in service). This further refers to unbroken service within the group or company.

8 The employee will also be provided with a certificate of service. Redundanc y and Retrenchment Polic y P a g e 8 o f Re-employment Any retrenched employees will be contacted for preferential re-employment for a period of 6 months after the date of retrenchment. All communications in this regard will be sent to the employees last known address as per The employer records at the time of retrenchment. It is the employees responsibility to ensure that these details are updated as necessary. Any offer made by the employer to the retrenched employee in terms of re-employment, must be taken up within 7 days. If the offer is not accepted, the employer shall be released from its reemployment obligations. Any retrenched employee who secures alternative employment within 12 months of being retrenched must notify the employer thereof, and such notice shall release the employer of any obligations in terms of this agreement More than 50 employees If the employer employs more than 50 employees and if the employer contemplates dismissing by reason of the employer s operational requirements: at least 10 employees, if the employers employs up to 200 employees; or 20 employees, if the employer employs more that 200, but not more than 300 employees; or 30 employees, if the employer employs more than 300, but not more than 400 employees; or 40 employees, if the employer employs more than 400, but not more than 500 employees; or 50 employees, if the employer employs more than 500 employees or the number of employees that the employer contemplates dismissing together with the number of employees that have been dismissed by reason of the employer s operational requirements in the 12 months prior to the employer issuing a notice in terms of dismissals due to operational requirements is equal to or exceeds the latter number specified. If the above applies the employer is required to comply with the procedures as per the LRA for these categories of retrenchments.