Navigation 

Your questions answered: How should we select employees for retrenchment?

By Portner Press on April 12th, 2019
  1. Termination of Employment
  2. Redundancy

Q
To remain financially viable, we need to implement redundancies. The ‘last on, first off’ approach to selecting which employees to retrench has been suggested, as it will allow us to retain employees with the most experience. Is this lawful?
A
When selecting employees for compulsory redundancy, it is important to ensure that decisions are based on your business’s operational requirements and that a business case is prepared.

The criteria for selecting employees for retrenchment should be linked to those requirements. The criteria should be non-discriminatory, objective and consistently and fairly applied. This minimises the risk of a redundancy decision being successfully challenged.

The ‘last on, first off’ approach is risky and we generally do not advise that it is used, as it can unfairly discriminate against a particular group of employees, e.g. young employees.

We recommend using a redundancy matrix that sets out key selection criteria and identifies how each employee scores against the relevant criteria.

Tap into the knowledge of top employment law experts for free

When you subscribe to the Employment Law Practical Handbook.





Related Articles: