20 July 2020 by Cliffe Dekker Hofmeyr Employment Alert

Updated retrenchment guideline

We find ourselves in unprecedented times. Owing to the current global pandemic, unemployment has risen to 30% and is expected to rise up to 50%. The World Bank has predicted a global recession, worse than we have seen in the last 80 years and the national treasury expects up to 2 million jobs to be lost due to the COVID-19 pandemic. As businesses suffer financial distress, retrenchments are becoming unavoidable. With remote work becoming the new way of life, many employers have also introduced technology to perform certain functions and therefore no longer require the staff component they had prior to lockdown.

Employers are however subject to the same legal obligations and are required to follow the same retrenchment process as they ordinarily would before the COVID-19 pandemic. This situation has presented various challenges for employers. 

To assist you in navigating the retrenchment process during these difficult times, CDH has updated our retrenchment guideline to answer all questions related to retrenchments more generally as well as other considerations applicable during this time. The retrenchment guideline seeks to answer questions related to, amongst other things, short time, temporary layoffs, whether an employer may be exempt from the payment of severance pay where it cannot afford to pay employees, as well as permissible selection criteria.

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