IS THE ADOPTION OF SPECIAL MEASURES TO AVOID RETRENCHMENT SPELLED OUT IN SECTION 12D OF THE LABOUR ACT [CHAPTER 28:01] MANDATORY? By Alec Muza
For a variety of reasons an employer may find itself in a situation where it faces financial problems. In Zimbabwe factors in the economy at large have led to many employers being placed under immense pressure, thus leading them into considering reducing their wage bills – total remuneration to all employees. In order to try and keep their companies operational, most employers in Zimbabwe may be (some have already been) forced to retrench some of their employees.
Section 12D of the Labour Act [Chapter 28:01] (the Act) is titled “Special measures to avoid retrenchment”. The question that comes to mind after seeing such a title is whether or not it is compulsory on the part of the both the employer and the employee to adopt the special measures to avoid retrenchment?
A perusal of section 12D (1) of the Act reveals that the Act imposes a mandatory obligation on the employer to inform and consult its employees of any major changes it foresees in production, programmes, organization or technology within its institution which are likely going to result in the retrenchment of any group of five or more employees in a six-month period. Unlike the Labour Relations Act in South Africa which spells out the areas which the consulting parties must attempt to agree on during the consultations, our own Act does not expressly state what is to be discussed during the consultations.
The Act simply states in section 12D (2) that the employer who intends to retrench “… may agree with the employees concerned, or with any workers committee, works council or employment council which represents the employees, to have recourse to either or both….”, (a) placing the employees on short-time work; or (b) instituting a system of shifts.
Since the Act does not expressly state whether placing the employees on short – time work or instituting a system of shifts are the topics to be discussed at the consultative stage, it must be implied that these special measures are the consultation topics.
A reading of section 12D (2) of the Act clearly reveals that the employer has the discretion to either agree or not with the employees concerned on whether it should adopt any special measures to avoid retrenching them. Despite the legislature’s attempt to make the whole retrenchment process fair by making it mandatory for the parties to embark on a joint problem – solving exercise, the employer still wields the final decision in the event of the parties failing to reach consensus on the adoption of the said special measures.
The above position is backed by section 25A (6) of the Act which recognizes the employer’s right to refuse to accept the employees proposals and simply give its reasons for disagreeing. In Atlantis Diesel Engines (Pty) Ltd v National Union of Metalworkers of SA (1994) 15 ILJ 1247 (A) and SA Commercial Catering & Allied Workers Union & Others v Sun International SA Ltd (A Division of Kersaf Investment Ltd) (2003) 24 ILJ 594 (LC) at 608 the courts in South Africa stated that if consensus cannot be achieved during the consultation process, the final decision remains with the employer.
From the foregoing it is clear that there is indeed an obligation on the employer to consult its employees on the methods that may be adopted in order to avoid retrenchment. However the employer does not have an obligation but has a discretion to either agree to adopt any measure to avoid retrenchment spelled out in section 12D (2) of the Act or not.
Despite having the final say on whether it is going to terminate its employees employment for operational reasons without having adopted the said special measures in section 12D (20 of the Act, the employer has an obligation to consult its employees on the said special measures in good faith. Further the employer must be prepared to keep an open mind with regards to representations made by the employees.