PODCAST | How would SA’s ideal labour law regime look?

With SA’s unemployment rate hitting record levels of more than 35%, labour law reform is seen as a key avenue to help stimulate jobs and investment. This will, however, require political will and keener insights on the economic effects of policies.

Host Evan Pickworth interviews Fritz Malan and Jan Norval from ENSafrica on the need for, and progress on, labour law reform in SA.

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It is, in our view, of paramount importance that the retrenchment process should, in the first instance, be clear and capable of execution by lay people.

Although it is not viable to redesign our retrenchment law in this article alone, we offer the following broad suggestions for consideration and debate:

One possible approach could involve moving to a pre-approval system for retrenchments to provide legal certainty before a retrenchment exercise is concluded. Pre-approval could also be offered as an alternative available to employers with the current system remaining as an option for employers who prefer to retrench without initial oversight and deal with legal consequences (if any) at a later stage.

The practicalities of a pre-approval approach would have to be carefully worked out to provide for the differing scale and complexity of different retrenchment exercises and to ensure tight timelines for the completion of the process. There should be the right to challenge the decision of the approval body, however this should be limited to either a review or appeal, on an urgent basis. Such an approach could avoid the spectre of years of ongoing legal uncertainty. It is suggested that this of type approach could potentially maintain a degree of protection against unfair dismissal, while largely avoiding procedural disputes.

It would promote legal certainty if the courts (and any specialised pre-approval body) are specifically restricted from delving deeply into commercial and operational merits of employer retrenchment decisions, which parties other than the employer itself are, in reality, ill-equipped to do.

Another alternative, but much more limited reform approach, could be to leave the existing legal structure in relation to retrenchment intact, but to provide employers with the choice to avoid legal challenge to the retrenchment process by offering a specified enhanced severance payment. Many employers may choose to pay enhanced severance pay to obtain legal certainty.

• Fritz Malan and Jan Norval of ENSafrica