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.