June 21, 2017


Retrenchment is a process which is embarked upon by an employer where they have the need to consult a targetted audience of employees in relation to their possible loss of their workplaces.   This process of consultation could be occasioned by situations in which the employer is experiencing a problem in being financially sustainable, or because they have implemented a certain, revised organisational and operational structure or where new technology has been introduced all of which has the effect that fewer workplaces and employees will be required by that employer to give effect to its strategy.

The loss of a workplace by an employee is severe, more so during times of tough economic conditions in which the labour market is tough and not very fluid.   One’s work is an extension of oneself and very often the employee who is being consulted about the imminent loss of their workplace, questions their own worth and value to the organisation.    The employee not only questions their organisational worth and value but does exactly the same in any context in which they may be active or be required to interact such as their domestic situation, within social or voluntary organisations of which they may be part and the like.  This, in turn, can cause a loss of confidence by the employee and even the onset of depression.

The phases an employee goes through during a retrenchment process follows a similar pathway as in any other loss, such as the loss of a parent, sibling, child or family member or anything else of value.   It would be helpful to any employer to understand these phases so that they can offer as much support to the employee during this time as may be needed to leave them with their confidence in tact and also free of the kind of bitterness that drives the employee to the CCMA or Labour Court to take up a labour dispute against the employer.  The phases are the following in brief:

  1. Disbelief: During the first stage, the employee has difficulty in believing that their position has been identified as one of the positions to be retrenched.   This phase is marked by many questions being asked such as Why me?  I have put in so many additional overtime hours, how can this be the thanks I receive?
  2. Anger: During this phase the employee becomes bitter and compares themselves with other employees who may not be working the long hours they have been, or may not have had the workloads they have had.  This inequity drives the employee to believe that the employer has not selected them in accordance to any sound criteria but they have rather been selected for some other sinister reasoning.
  3. Disenchantment: During this phase the employee experiences much regret and perhaps even guilt.  The employee feels a sense of sadness at the imminent loss of their position and may even experience guilt feelings derived from thoughts that they could have done things differently and better and that had they done so, they may have secured their continued role with their employer.  During this phase, along with the former two phase,  the employee is very unproductive and disengaged from the employer.
  4. Acceptance: During this phase, employees may begin to ask questions of the employer as to how and why they were selected as candidates for retrenchment.  These questions and the answers they receive may help the employees to coming to the place of acceptance.  Acceptance could also come through the employee accepting that nothing they can do will persuade the employer to act differently and they could begin to paint a favourable picture of what life outside the organisation could look like.
  5. Mobilisation: During this phase, the employee relaises that they cannot “roll over and play dead”.  They realise that actions must be taken and decisions must be made.  Such actions and decisions could extend into drafting and updating their curriculum vitae, deciding on what should be done with any pension contributions the employee has in their pension fund and which would become due to them, deciding on which employers to target for future employment or whether one may wish to try their hand at their own business and the like.

Employers, if they can identify the phase the employee is in, can provide valuable support to the employee which will help the employee to deal more effectively with the situation.   In the first 3 phases, an employer could make use of the services of a pyschologist, counselor or wellness provider who would be able to provide advice and counsel to the employee so that they come more positively through these phases and where they don’t hold on to feelings of anger, resentment, bitterness and guilt and regret.    In the final two phases employers could consider assisting employees being retrenched with services which would help them to build life plans for themselves, provide assistance in regard to financial and retirment planning as well as assist by connecting employees with outplacement or recruitment agencies who would assist them to source alternate employment opportunities.

For employers to proceed through retrenchment exercises more effectively and to minimise risks of litigation, it takes much empathy.  Not only this it also takes an understanding of the phases that an employee being retrenched will pass through as well as the ways and mechanisms that the employer will employ to assist the employee at the appropriate time.  Embarking on any retrenchment with this level of empathy and understanding will most definitely assist the employer in ensuring that the retrenchment is successfully executed with the minimum of litigation.

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