We are all aware that businesses across the board throughout South Africa are in retrenchment mode. Many employers’ especially small businesses are considering restructuring in order to cut down on their biggest cost, which is salary. Unfortunately, these retrenchments are ongoing and are set to quicken over the next few months. I am involved in many of these retrenchment exercises in order to ensure that the process is done properly. What is shocking is what has been happening over the past few months. I often tell businesses to first allow the staff to consider a voluntary retrenchment in order to allow those who want to actually leave to access the severance package so as to enable those who want to remain to keep their jobs.

Over these past few months every time we have opened the opportunity for staff members to take a voluntary package we’ve had more than enough volunteers in order to enable us to avoid retrenching those that want to remain in their jobs. When enquiring from those that volunteered, it became clear that they had not sourced alternative jobs but people were so desperate to pay off their debt that they saw a quick fix. The severance package and the pension or provident pay-outs would sort out the debt and they would worry about alternative work at a later stage.

This desperate situation is creating a far bigger problem than what we thought we had already. Those people once they’ve paid off their debts have no jobs and find difficulty in sourcing alternative employment.
This situation is a time bomb waiting to go off and although we have been trying to speak to individuals about ways and means of avoiding a retrenchment, many of the staff members are insistent on getting their packages and their pension pay-outs. We explain that there is almost 40% unemployment in South Africa and the chances of finding alternative employment within the next few months are very slim, the people merely state that they need the money now.

Despite the various schemes such as the layoff scheme as put together by the Department of Labour, the trade union movement has not played its part by educating the labour force on the alternatives to retrenchments and ways and means of avoiding the dismissals for operational requirements. The differences between employers and trade unions need to be put aside as we are currently experiencing probably the biggest disaster South Africa has ever experienced.