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Davies Ndumiso Sibanda

WHILE the new Labour Amended Act has provided for compensation for loss of employment, the Act lacks clarity on how the compensation is accessed leaving employers and workers to litigate in order to get direction.

The Labour Act provides for compensation for employees who are dismissed, employees who mutually terminate the contract of employment with the employer, for employees who are terminated at the end of the Fixed Term Contract and for employees who are retrenched.

However, the method of accessing the retrenchment package related to such termination gives a lot of problems.

The first challenge is, what happens where an employer dismissed an employee but cannot afford the Retrenchment Package and the dismissed worker approaches the Labour Officer for redress over unpaid retrenchment package, but does not challenge the termination.

The first question is does the Labour Officer have jurisdiction over this matter of retrenchment since the dispute is not of termination.
Can the employer challenge the Labour Officer’s jurisdiction? Or the Labour Officer should refer the matter to the Retrenchment Board or the Labour Officer should simply decline and say he has no jurisdiction.

This question remains without an answer although it is highly probable that the courts might view the issue of compensation as falling within the territory of the Retrenchment Board and the Minister.

The next issue is what happens if the Labour Officer deals with the matter and progresses it to the Labour Court where the employer challenges jurisdiction over retrenchment matters which arrive at the Labour Court via Labour Officer and Designated Agents instead of via the Retrenchment Board and the Minister.

My view is that the courts will have to develop case law although my reading of the view is that once any payment becomes a retrenchment package it then becomes a matter of the Retrenchment Board to handle and all other dispute resolution bodies are excluded with the exception of the NECs and Works Council exercising their powers in terms of retrenchment laws.

Further, another option is for the employer who dismisses an employee to immediately approach the Retrenchment Board over the payment of the minimum Retrenchment Package either offering to pay or pleading financial embarrassment and applying to be exempted from paying.

However, processes for applying for exemption should be followed before getting to the Retrenchment Board.

This reading of the law also makes some sense where the termination is not contested.

In conclusion, there are a lot more technical issues involved in the compensation process as per Amended Labour Act.

What I have covered here has nothing to do with whether the Act is a good document or bad one , but l have merely addressed issues of application which employers and workers should be careful about as they decide on compensation matters.

I will recommend that expert opinion is sought as all terminations can be expensive.

Davies Ndumiso Sibanda can be contacted on: email: [email protected] Or cell No: 0772 375 235