Is it Mandatory to Re-employ a Retrenched Employee?

Contrary to popular belief there is no blanket and/or mandatory requirement that an Employer must re-employ an employee after retrenchment, should a suitable vacancy arise.

During the retrenchment process, S 189(3)(h) of the Labour Relations Act, No 166 of 1995 (LRA) specifically requires an employer to disclose and consult on the possibility of future re-employment. This disclosure and consultation must be in keeping with a core requirement of the S 189 process namely, that it is a joint consensus seeking exercise and not a fait accompli. It does not from the outset prescribe that an Employer must re-employ an Employee after retrenchment or benchmark any re-employment period after retrenchment. In SASBO v Standard Bank of SA [2011] JOL 26928 (LC) the court stated that should an Employer fail to disclose and consult on the possibility of re-employment, the retrenchment may be regarded as procedurally unfair.

During the consultation process the Employer may reach an agreement with the Employee that provides for preferential re-employment, but once again reaching an agreement is not mandatory.

In the event that the Employer does reach an agreement regarding re-employment and fails to adhere to this agreement, such an omission will result in an unfair labour practice and may amount to a substantively unfair dismissal.

NEWSFLASH – Constitutional Court Confirms Position On S 42(a) of the EEA

In the recent Constitutional Court judgment of Solidarity & Others v Department of Correctional Services & Others (CCT78/15) [2016] ZACC 18 handed down on 15 July 2016,the court held that the Department of Correctional Services acted unlawfully and in breach of its obligations under S42(a) of the EEA in that it failed to consider the regional demographic profile in assessing its levels of representation and thus setting targets for its Employment Equity Plan.

In terms of a brief background to the matter, the Department in 2011 advertised vacant posts in the Western Cape. Certain applicants who applied for the positions were denied appointment to the positions on the basis of race and gender considerations which the Department maintained were ‘over represented’.

The Department argued that because it was a national department, it wasn’t required to consider both the national and regional demographics (as indicated in S 42(a) of the EEA). The court however rejected this argument on the basis that S 42 (a) of the EEA doesn’t stipulate that national departments are excluded from its application, with the result that the Department wasn’t authorised to preclude consideration of the regional demographic profile. The Department therefore had no justification for using race and gender as a criteria to refuse the appointment of the respective applicants, with the result that the Department’s decision not to appoint most of the applicants was regarded as unfair discrimination.

In lieu of the above, the Court ordered that the recommended coloured applicants be appointed to the vacant advertised positions and be paid the remuneration assigned to these posts with retrospective effect. In terms of the posts that were currently occupied, the Department was ordered to pay these applicants the remuneration assigned to these posts with retrospective effect.