When an Employer contemplates dismissing an employee/s for reasons related to operational requirements (retrenchment), an Employer is required to follow the procedure as set out in Section 189 in the Labour Relations Act.
This can be a daunting procedure for both Employers and Employees. As such, the parties often look to concluding an amicable retrenchment agreement rather than going through the consultation process. Or they reach an agreement during the consultation process. This is where the mutual termination agreement becomes necessary.
“I am of the opinion, that in most cases it is preferrable for an employee and an employer to come to an agreement, rather than forced outcomes. ”
Carmen Fourie – Employment Relations Practitioner
At any point during or before the Section 189 procedure an Employer or an Employee could propose the possibility of an agreement. If an agreement is reached – you can use my mutual termination agreement template to protect both the Employee and the Employer.
*Please note I do not recommend voluntary retrenchments or voluntary retrenchment agreements. I cover this in a Youtube video that you can find on my Youtube Channel.
If the parties are unable to reach an agreement or the retrenchment procedure needs to start I recommend my video on the Section 189(3) letter that starts the procedure and the accompanying Section 189(3) notice of contemplated dismissals template available for download.
Carmen Fourie – Employment Relations Practitioner