Musings: A fair retrenchment
The impact of job loss is tremendous. The loss of a job is never easy, even if it is expected. Unexpected job loss has an even greater emotional impact on us….
For both men and women, job loss will reflect on our personal value. It may be argued that we put too much value on the external image of a job and not enough on the internal dignity of being a human being. Yet, it is hard to see or feel dignity when your source of income is removed. There is no simple solution; a job loss WILL cause stress. Many researchers rank the stress of job loss with Post Traumatic Stress (PTS) found in combat - https://www.allaboutlifechallenges.org
The corrosive effects of job loss on the individual, especially where that termination is at the initiative of the employer, are too well documented in the relevant literature to bear repetition. Since this phenomenon implicates the dignity and autonomy of the person, it is quite natural for the State to intervene in the process to ensure that fairness and justice prevail in so momentous an undertaking. It may thus be a useful analysis to compare the locally prescribed procedures for termination with those that obtain in the currently ongoing retrenchment in the public sector.
Mass retrenchment or redundancy as part of a restructuring of the workforce appears inevitable in a process of economic transformation. While our nobler instincts of people- centredness and social welfare considerations may demand that retrenchment be perceived as a last resort after all other alternatives have been explored, considered, analysed and rejected, the law recognises that there may be circumstances in which retrenchment of workers becomes the most effective option.
To this end, there are two parts to the stipulated process. First, that there must be agreement reached through good faith bargaining between the relevant parties, namely the workers’ organisation or the individual employees and the employer of the need at all for the proposed retrenchment. And while it is accepted that the provisions of the Employment Rights Act 2012 do not bind the State qua employer, it still provides, in my opinion, cogent evidence of best practice in regard to the retrenchment process.
According to section 31 (1) of that statute, a dismissal is not to be considered unfair if it is owed to redundancy and the prescribed procedure has been followed. Insofar as liability to retrenchment is concerned, the analogous private sector requirement provides, where relevant, that redundancy of the employee arises “where the requirements of the business for employees to carry out work of a particular kind … have ceased or diminished or are expected to cease or diminish”.
Where the reduction in the workforce is anticipated to be significant, the employer is also expected to provide the employee, or workers’ organisation where there is one, and the Chief Labour Officer with a written statement of the reasons for and the other particulars of the dismissal.
Sub-section 5 provides for what should be contained in the statement, including the facts supporting the situation of redundancy, the number and categories of employees likely to be affected and the period during which their dismissals are likely to be carried out.
As is the case with all collective employment, the employer is required to engage in good faith negotiation or consultation with the certified bargaining agent on behalf of the workers. The essence of the obligation is to negotiate in good faith, hopefully to reach agreement.
It is mandated that these consultations commence not later than six weeks before any terminations and that they be in respect of (i) the proposed method of selecting the employees who are to be dismissed; (ii) the proposed mode of carrying out the dismissals; and (iii) any measures that the employer may be able to take to find alternative employment for those who are to be dismissed and so mitigate for them the adverse effects of the dismissals. Provision is also made for the circumstance in which it is found impracticable to comply with the stipulation as to commencement of the consultations.
Of course, I am not at all privy as to the detailed circumstances in which the current retrenchments were carried out and it is acknowledged that the legislation referred to herein is not directly binding on that process, although as I have observed above, it might be indicative of best practice in this context, given its intendment to comport with principles of fairness of termination of employment. These embody a concept that is directed towards preserving the dignity and autonomy of the employee who, through no fault of his or her own, is forced to face the ineluctable stress that accompanies sudden joblessness.
Rigorous and faithful adherence to the statutory process by the relevant parties would have at least scotched any suggestions that the process was tainted by indirect gender discrimination through the selection of the class of stenographer/typists for retrenchment or that there was direct status discrimination through the selection of lower level employees only. It would have lain ill in the mouths of the workers’ organisations to condemn a process and its outcome in which they had fully participated and agreed to as prescribed.
Most jurisdictions provide for a terminal payment to those employees in the private sector who are dismissed for redundancy to tide them over the immediate consequences of job loss. The workers’ organisations would also have had a role to play in this calculation in light of their statutory entitlement to be consulted on a purposive interpretation of “any measures that the employer may be able to take to find alternative employment for those who are to be dismissed and so mitigate for them the adverse effects of the dismissals”.
There may arguably be legitimate questions raised as to the inequality of the bargaining power of the respective parties to the process and as to whether the retrenchment solution was entirely voluntary or whether it was mandated by circumstance or conditionality. These go the issue of governance on both sides of the equation and it would certainly be in the public interest if these concerns were promptly and openly addressed.