Responding to a retrenchment letter

Imagine this: You arrive at work and just before you switch on the kettle for your early morning coffee fix you notice a letter addressed to you lying on your desk.  As you open the letter a feeling of complete numbness starts creeping up over your entire body. It is a retrenchment notice in terms of Section 189 (3) of the Labour Relations Act. You wonder … “am I the only one..?” In the kitchen you soon realise that you are not alone. Your entire department is bickering and talking about the retrenchment letters that they received whilst the CEO has just bought himself a new Jaguar.

Do you need to be concerned? Most definitely, but a retrenchment letter need not to be the end of the road. It is merely the start of a process, that when followed correctly could be less catastrophic than what you imagined it to be.

The employer should address the following matters in writing when the retrenchment notice is served:

  • The reasons for retrenchment and the alternatives they contemplated.
  • The number of employees that will be affected or dismissed.
  • The selection method or criteria that will be considered for dismissal.
  • The proposed time frame for these dismissals.
  • The proposed severance pay.
  • The possibility of future re-employment.
  • As well as the total number of employees that has been affected by retrenchment in the past 12 months.

After receipt of the retrenchment letter a meeting will be called. The purpose of this meeting can be summarised as follow:

  • To consult with all interested parties with the aim to firstly reach a so called meaningful consensus on which appropriate measures could be taken in order to avoid and minimise dismissals.
  • Secondly to mitigate the adverse effects of dismissals. Deciding for example on the selection method or criteria that should be used for dismissal and which proposals for severance pay should be considered.

Sadly, this is where the consultation process ends for most employers. They will not inform their employees of their rights and they will assume that all concerns were presented at the first meeting.

In terms of Section 16 each employee has the right to information and the right to challenge the information received at the CCMA or a Bargaining Council.  According to Section 189 part 6, every employee also has the right to make written submissions and receive a written answer from their employer.

After the initial discussion on retrenchments employees must respond by saying that they reserve their rights and that they will answer in writing.


It is common cause that meaningful consultation would mean a discussion with sound rationale to avoid dismissals and an honest attempt to find a solution. It is also common cause that when a person commits to a situation in writing it is more readily challenged because of the fact that proof has not been eroded by a “he said, and she said “scenario, but it is validated in writing. The consultation process now takes place in writing and all bantering and argument is reduced to a tangible and recorded proof of events.

The courts will not readily challenge reasons furnished by the employer. However, the courts must follow the procedural aspects and they are vigilant on guarding this process. Sometimes the only option is to tactically delay the retrenchment process in order to find alternative employment. By responding in writing you could increase the options available to you, arguments made would be more substantial and chances are that the retrenchment process could be delayed.

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