08/06/2026
Retrenchment is one of the most difficult processes any organisation and employee can face. In South Africa, Section 189 of the Labour Relations Act requires employers to engage in a meaningful joint consensus-seeking process before any dismissal for operational requirements takes place.
In practice, many consultation processes become little more than a tick box exercise where decisions have already been made and employees are simply informed of the outcome.
Consultation Is Not Notification. One of the biggest misunderstandings in retrenchment processes is confusing “consultation” with “communication.” Telling employees that we are sorry but you are retrenched is not consultation. Consultation means engaging employees or their representatives before final decisions are made and while alternatives are genuinely being considered.
Genuine Consultation involves:
1️⃣ Early Engagement - It should begin as soon as retrenchment is contemplated, not once decisions are finalised.
2️⃣ Transparency - Employers should openly share relevant information as detailed in the Code of Good Practice on Dismissal including:
• The reasons for the proposed retrenchment
• Financial or operational pressures
• Proposed structures
• Selection criteria
• Possible timelines
3️⃣ Exploring Alternatives Seriously - A genuine process actively considers ways to avoid job losses. Alternatives should not simply be “heard” and dismissed.
4️⃣ Respectful Communication - Retrenchment processes can be emotional. Genuine consultation requires empathy, professionalism, and dignity throughout.
5️⃣ Fair Selection Criteria -Selection criteria must be objective, fair, and consistently applied. Criteria such as “last in, first out” (LIFO), skills retention, qualifications, and operational requirements should be clearly explained and open for discussion.
6️⃣ A Willingness to Listen – Be open to listening! Employers do not have to agree with every proposal, but they must show that employee input was properly considered before decisions were made.
Beyond legal compliance, genuine consultation protects workplace relationships and organisational reputation.
Genuine consultation is about more than compliance. It is about recognising that behind every position potentially affected is a person, a family, and a livelihood.