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Thread: Retrenchment - Fair or Unfair - URGENT advice required

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    Retrenchment - Fair or Unfair - URGENT advice required

    I have been retrenched last week and now form part of the growing statistics of SA. I have been with the company for 3 years and 3 months. My employer has retrenched someone in a similar position 2 years prior using the exact same reason 'company financial difficulties'.

    I have a couple of questions that I need answered please...

    1. The lady in that was retrenched 2 years prior was only employed for 9 months and were offered 2 weeks severance pay for every year worked or part thereof. I am only being offered 1 week severance pay for every year worked or part thereof. I have been told by labour relations staff at a big corporate that my employer must offer me the same as he 'instituted operational precedent' by offereing the previous staff member 2 weeks and should therefor offer me the same. However, the CCMA is of a different opinion. I have tried to contact a lawyer to ask for advice on this issue, but it seems they will even charge you for telephonic advice to the tune of R1020 per hour! Am I or am I not entitled to request this?

    2. The above sentence '...for every year worked or part thereof', does this mean that the 3 months that I have worked count as a full year on it's own? What is the formula used to calcuate payment due if this is not the case?

    3. The company is also moving to smaller premises at the end of this month and I have proof that the company will show a profit (not adding any additional revenue, merely working on averages) should I not be retrenched. I mentioned this to the CCMA and the lady there told me that it is unfortunate, but that companies nowadays use 'financial difficulties' as an excuse to get rid of staff and there is nothing I can do about it. Is this true? I can not believe it as surely employees have rights that protect them from this sort of thing? Note that it was made clear to me that my work ethic and the quality of my work was never under question.

    4. I also have proof that the MD owes the company over R200 000 worth of loans that he has not repaid. How is it that MDs can basically live off company funds and employees pay the price when things go pear shaped? Can this not be used in my defence either? I also know that 2 weeks before he retrenched me, he transferred money from our company account to his local church and instructed the FM to allocate it to his loan account.....

    5. In my Performance Appraisal (PA) that was done November 2010 he told me that he was very pleased with my work except for the fact that when the FM and himself briefly touched on finances, it seemed to him like I was not interested and had a 'far off look' in my eyes. I told him that they have confidential meetings that I am never part of and it is difficult for me to raise or add an opinion if I do not know what is discussed and how it effects the rest of the departments. He proceeded to tell me that he did not think of it that way. I requested to be part of the financial meetings in future so that I can have a clearer understanding of that side of the business and he agreed that it was a good idea. Between then and last week, the FM confirmed that she and the MD has had numerous meetings about the company finances. I was never requested to sit in on these meetings. By doing this he has effectively ensured that I could not come up with the idea of moving to smaller premises to save my job or any other cost saving initiatives that they discussed together. All of this he decided on in my absence. Although I knew about his plans (having been close friends with the MD and also part of management - Operations Manager), the first time he formally informed me of the impending move was when he advised me that I am being retrenched. Does this not also strengthen my case?

    I only want what is fair and right and at the moment I am caught between a rock and a hard place. I can not understand how people, and by this I mean the MDs and CEOs of this world, can literally get away with doing anything they want. Yes, there is the law, but in order for the average Joe to access it, you have to pay exorbitant lawyer fees if you want quality representation. Hence the crux of the matter, you are retrenched, have to fight for every cent you can get, have bills to pay and a little child to cloth and feed and then you think the law might be able to help you and wham! brick wall!

    I honestly need some sound advice here. Am I wrong in my assumptions of my rights or must I just take what I can get and leave it at that?

    I am calling on all legal eagles on this forum as well as people with similar experience to mine. I have found that the people frequenting this site is knowledgable and I need no 'beating around the bush' right now.

    Thanking you in advance for your assistance.

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    Diamond Member adrianh's Avatar
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    You know, I've been on both sides of this fence, as and employee you think its unfair, as a employer what do you do? I run a small business that employs 4 people. i have always paid my employees on time and I have always made sure that their needs are met...but...I have let my house payments, car payments, insurance etc bounce purly to pay the employees. As a business owner you reach a point where you have to make tough decisions, let some people go or hit the wall and everybody goes. Look, i understand that it is tough but the bottom line is that you cannot get blood from a stone, when the $h1t hits the fan something has to change. As a business the biggest expense is staff, well to me anyway, and if i work 22 hours instead of 18 then I can cover the loss of an employee. You complain about the R200k that the md took from the businesss, I invested, my house, car & life over and over into the business, you don't know what I, as an employer has put in, all you see is a figure in a spreadsheet. If The staff had to see how much money I have put in and lost on the business they would all run away.

    What I am trying to say is that you need to realise that the employer is not always a big bad twat that wants to do you in, sometimes he is a guy just like you who doesn't have all the answers. Open your eyes and see the big picture, it doesn't always matter how good you are or badly you feel done by, life isn't fair and sometimes you are dealt a bad hand and you lose....

    If you were my employee and I decided that it would be best for you to hit the road to save the business and you fought me through the CCMA, you would come off a very bad second best.

    My advice is to take the hit, learn from it and move on...You win some, you lose some, but you should alway learn from the experience!
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    Diamond Member Justloadit's Avatar
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    Maybe he offered 2 weeks to the previous employee, because he has a heart to have helped the employee out. I have also been in a situation in a company that had to close down. The retrenchment pay outs made my situation even worse, since I had no money to pay, so had to get even further into debt to make the payouts, which meant it took took me more years to recover. Standing on the other side as an an employee, it always seems so unfair, but when you have all the wolves at your door, as the employer about to loose his livelihood and even the right to trade again, unfortunately the employee is but a small part of the picture.

    Going legally is not going to help you, you all ready got what the law has stated that you are entitled to. Spending more money to recover what you think you are entitled to is only going to aggravate you more. Accept the situation, and focus now on getting income to ensure that you do not land up in a similar position as the company. Use your energy to find a way to replace your income.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Olderwagen View Post
    I have been told by labour relations staff at a big corporate that my employer must offer me the same as he 'instituted operational precedent' by offereing the previous staff member 2 weeks and should therefor offer me the same. However, the CCMA is of a different opinion.
    I'm inclined to favour the CCMA's opinion on this. Operational precedents can be changed/reversed - the employer just has to show good cause. (I've got a long story to tell on this, but I won't bore you with the details).

    Quote Originally Posted by Olderwagen View Post
    2. The above sentence '...for every year worked or part thereof', does this mean that the 3 months that I have worked count as a full year on it's own?
    Yes.

    Quote Originally Posted by Olderwagen View Post
    3. The company is also moving to smaller premises at the end of this month and I have proof that the company will show a profit (not adding any additional revenue, merely working on averages) should I not be retrenched.
    Companies can be making a profit and still experience financial difficulty. As for rights - you could always offer to buy shares. (Sorry - rather cynical I know. I'll try to make up for it later).

    Quote Originally Posted by Olderwagen View Post
    4. I also have proof that the MD owes the company over R200 000 worth of loans that he has not repaid.
    A simple book entry of director emoluments by end of financial year could clear that pretty easily. The quantum of director emoluments are often only set at end of financial year or even later. Some companies pay the directors "advances" via a loan account which is later offset against the directors emoluments once they're set. I'm not a fan of the method, but it's legit.

    Quote Originally Posted by Olderwagen View Post
    How is it that MDs can basically live off company funds and employees pay the price when things go pear shaped? Can this not be used in my defence either?
    The shareholders might be interested. Of course if the shareholder is the MD... maybe not.

    Quote Originally Posted by Olderwagen View Post
    I also know that 2 weeks before he retrenched me, he transferred money from our company account to his local church and instructed the FM to allocate it to his loan account.....
    Trying to buy divine intervention, maybe? (I did say I'd try to make up for being cynical earlier )

    Quote Originally Posted by Olderwagen View Post
    5. In my Performance Appraisal (PA) that was done November 2010 he told me that he was very pleased with my work...
    One of the truly great bugger-ups of the LRA. Individual performance has no influence on the setting of retrenchment criteria, be it selection criteria or retrenchment package.

    Quote Originally Posted by Olderwagen View Post
    By doing this he has effectively ensured that I could not come up with the idea of moving to smaller premises to save my job or any other cost saving initiatives that they discussed together.
    Were you given the opportunity to make suggestions as to how the impact of retrenchments could be reduced? It should be part of the retrenchment process.

    Quote Originally Posted by Olderwagen View Post
    I only want what is fair and right and at the moment I am caught between a rock and a hard place.
    Pretty much covered by Adrian and Justloadit above - what is "fair" tends to be pretty subjective.

    Quote Originally Posted by Olderwagen View Post
    I can not understand how people, and by this I mean the MDs and CEOs of this world, can literally get away with doing anything they want.
    They can't. But bringing them to account can be very tricky. (Lots of long stories to tell on this one ).

    Quote Originally Posted by Olderwagen View Post
    Am I wrong in my assumptions of my rights or must I just take what I can get and leave it at that?
    I suggest focus on what is best for your future. Holding onto baggage; looking back instead of forward... It slows you down - far more than you'd think.
    The trouble with opportunity is it normally comes dressed up as work.

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    2. The above sentence '...for every year worked or part thereof', does this mean that the 3 months that I have worked count as a full year on it's own? What is the formula used to calcuate payment due if this is not the case?
    That's not the wording used in the LRA.

    This is :
    196.
    (1) An employer must pay an employee who dismissed for reasons based on the employer's operational
    requirements severance pay equal to at least one week's remuneration for each completed year of
    continuous service
    with that employer, unless the employer has been exempted from the provisions of
    this subsection.

    So I think the answers should be No.

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