Question:

My wives boss decided to terminate his business as he feels its not profitable anymore. He announced his intention just over 30 days ago stating verbally to all staff that he will have to “close down” if business conditions do not improve. As of the end of last week he started what he calls retrenchment and will only keep core staff to “finish” some lucrative contracts and has asked select people to leave by end of the month (7 days) There will be no notice pay as he claims he already gave notice? Surely this is incorrect? No retrenchments have been issued.

Answer:

He is obliged to follow all correct retrenchment procedures that include a minimum of 30 days consultation process with affected staff. Issues such as alternatives , staff input , criteria , reasoning etc.. has to be covered. If at the end the option chosen is retrenchment then the employee receives 1 weeks salary per completed 12 months of service and 1 months notice pay. So yes he is in breach of prescribed requirements. At the beginning he should have issued written intention notices to the staff and began the consultation process. He cannot now fast track as he “said” he was going to maybe retrench some 30 days ago.

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