What are my rights during a retrenchment consultation?

During a retrenchment consultation you have the right to be told in writing why the employer is considering retrenchment and what it proposes, to receive the information behind that proposal, to put forward alternatives and have them seriously considered, to be consulted about how people will be selected, to know what severance and other assistance is on offer, and to a process in which the employer genuinely tries to reach agreement with you before it decides anything. Those rights come from section 189 of the Labour Relations Act 66 of 1995, and an employer that treats consultation as a formality risks an unfair dismissal finding.

This guide is part of our Your rights at work: pay, contracts, resigning and retrenchment, which links every guide on the topic.

Retrenchment is a dismissal for the employer's operational requirements, meaning its economic, technological, structural or similar needs. It is one of the three fair reasons for dismissal, but because the reason has nothing to do with your conduct, the law puts the weight on procedure. This guide sets out what that procedure requires and how to use it.

Who must be consulted

The employer must consult whoever a collective agreement says it must consult. If there is no such agreement, it consults a workplace forum if one exists, then any registered union whose members are likely to be affected, and if there is no union, the employees themselves or the representatives they choose. If you are not in a union you are entitled to be consulted directly or through a representative you nominate.

The written notice

Consultation starts with a written notice inviting you to consult. The notice must set out:

• the reasons for the proposed retrenchment
• the alternatives the employer considered before proposing retrenchment, and why it rejected them
• the number of employees likely to be affected and the categories of job involved
• the proposed method for selecting who will be retrenched
• when the retrenchments are likely to take effect
• the severance pay proposed
• any assistance the employer proposes to offer, such as time off to attend interviews or help with UIF forms
• the possibility of future re-employment
• the number of employees the employer has and the number retrenched in the previous twelve months

If the notice you received is a single paragraph saying the company is restructuring, it does not meet this standard. Ask in writing for the missing information.

What consultation must cover

The employer must engage in what the Act calls a meaningful joint consensus-seeking process. It must try to reach agreement on ways to avoid the retrenchments, to reduce the number of people affected, to change the timing, and to soften the effect on those who are retrenched. It must also consult on the selection method and on severance pay.

The employer must allow you to make representations on any of these topics and must consider and respond to them. If it rejects your proposal, it must give its reasons, and if you made the proposal in writing, its reasons must be in writing.

The information you are entitled to

You cannot consult meaningfully about a financial crisis you are not allowed to see. The Act requires the employer to disclose all relevant information in writing, and the same disclosure rules apply as in collective bargaining. That usually means the financial or operational information on which the decision rests. The employer may refuse information that is legally privileged, that it is prohibited from disclosing, that is confidential and would cause serious harm if disclosed, or that is private personal information about someone else. A dispute about disclosure can be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA).

Selection criteria

If you and the employer agree on selection criteria, those apply. If not, the employer must use criteria that are fair and objective. Length of service, often called last in first out, is the most common and the hardest to challenge. Skills, qualifications and performance can be fair if they are measured objectively and applied consistently. Criteria that target a particular person, that rely on a manager's untested opinion, or that discriminate on grounds like age, pregnancy or union membership are not fair, and a retrenchment on those grounds can be automatically unfair. Since 4 September 2025 the Code of Good Practice: Dismissal, 2025 has contained the official guidance on retrenchment, including selection, replacing the separate 1999 code on operational requirements dismissals.

Facilitation for larger retrenchments

Where an employer with more than 50 employees proposes to retrench a significant number of them, section 189A of the Act applies. The trigger depends on the size of the workforce: at least 10 dismissals for an employer of up to 200 employees, rising in steps to 50 for an employer of more than 500, counting retrenchments in the previous twelve months. Either side can ask the CCMA to appoint a facilitator, and where facilitation is used the employer may not give notice of termination until 60 days from the written notice have passed. If there is no facilitator, a dispute can be referred to conciliation only after 30 days, and notice can be given only once the 30-day conciliation period has run. A complaint about the procedure in a section 189A retrenchment must be taken to the Labour Court by application within 30 days of the notice of termination. Our guide on section 189A large-scale retrenchments explains the thresholds, the facilitator and the choice between striking and going to court.

Severance pay

If you are retrenched you are entitled to severance pay of at least one week's remuneration for each completed year of continuous service. That is a floor. A collective agreement, your contract or negotiation during consultation can improve it. You lose the right to severance if you unreasonably refuse an offer of alternative employment with the same employer or another employer. Severance is in addition to notice pay, accrued leave and any other money owed. Estimate the package with the retrenchment package calculator, and read can my employer retrench me without paying severance for the exceptions. Severance on a genuine retrenchment is taxed on the favourable retirement lump-sum table, which our guide on how severance pay is taxed explains, so in negotiation a rand added to severance is usually worth more to you than a rand added to notice pay.

A worked example

This example is illustrative.

Mandla is a machine operator with nine completed years' service earning R16 000 a month. His employer, a factory with 120 staff, hands every operator a one-page letter on Monday saying that 15 positions will go at the end of the month because of "market conditions". A single meeting is held on Wednesday where management reads the letter aloud and takes no questions. The following Friday Mandla receives a termination letter.

Mandla's severance at the statutory minimum is nine weeks' pay, roughly R33 000, plus four weeks' notice pay and his accrued leave. Those are owed regardless. But the process was not a consultation. There was no proper written notice, no disclosure, no discussion of alternatives, and no agreed or objective selection criteria. And because an employer of 120 staff was cutting 15 posts, above the threshold of 10, section 189A applied, with its 60-day or 30-plus-30-day waiting periods before notice could be given.

Through their union, Mandla and his colleagues apply to the Labour Court within 30 days of the termination notices for an order compelling the employer to follow a fair procedure, which is the only route for a procedural complaint in a section 189A retrenchment. They also preserve their claim that there was no fair reason for the retrenchment, which goes to the Labour Court after conciliation. The employer, advised that its process is indefensible, withdraws the notices and restarts the retrenchment properly, and during the restarted consultation the union negotiates short time for three months instead of job losses. Had the claim gone to judgment and the retrenchment been found unfair, compensation of up to 12 months' remuneration per employee could have been awarded, though the Labour Court prefers to fix a flawed procedure before the dismissals take effect rather than pay for it afterwards.

What to do this week

1. Read the notice against the list above and write down what is missing.
2. Ask in writing for the missing information and for the financial or operational documents behind the decision.
3. Nominate a representative or contact your union. A group is consulted more seriously than individuals.
4. Prepare alternatives. Short time, voluntary retrenchment, reduced overtime, a pay freeze, redeployment, early retirement. Put them in writing.
5. Ask what selection criteria are proposed and how they will be applied to you.
6. Calculate your package with the retrenchment package calculator and check the notice figure with the notice period calculator.
7. Do not sign anything that describes itself as a voluntary separation or a full and final settlement until you understand it.

Documents to gather

Your contract, the last six payslips, proof of your start date, the written retrenchment notice, every letter and email exchanged during consultation, minutes of every meeting, the selection criteria and how they were applied, the severance calculation, any organogram showing the old and new structure, and any evidence that the employer is recruiting for similar posts. If you believe your selection was influenced by a protected ground, add the documents that show it.

A realistic timeline

• Day 0. Written notice inviting consultation.
• Weeks 1 to 8. Consultation meetings, disclosure, alternatives, selection criteria. Where facilitation applies, at least 60 days must pass before notice of termination.
• End of consultation. Notice of termination and payment of severance, notice pay and leave.
• Within 30 days of dismissal. Refer the dispute for conciliation. In a section 189A retrenchment, a procedural complaint goes to the Labour Court within 30 days of the notice of termination instead. The CCMA deadline calculator works out the dates.
• After conciliation. Labour Court referral within the required period, or CCMA arbitration where a single employee elects it. Labour Court matters can take a year or more. See how long a CCMA case takes.

Common mistakes and what they cost

• Treating the first meeting as the decision. Consultation is meant to change minds. Employees who put nothing forward have little to point to later.
• Not asking for documents. Without the financial information you cannot test the reason.
• Signing a voluntary separation agreement in a hurry. It usually waives your right to dispute the retrenchment. Read our guide on settlement and mutual separation agreements first.
• Refusing a reasonable alternative post. You may forfeit severance.
• Missing the 30 day referral deadline after termination.

Your rights vs the employer's rights

You have the right to a compliant written notice, to relevant information, to be consulted directly or through a representative, to propose alternatives and receive reasoned responses, to fair and objective selection criteria, to severance, notice and leave pay, and to challenge an unfair retrenchment. The employer has the right to make genuine business decisions, to restructure, to reject alternatives for sound reasons it explains, to select using agreed or objective criteria, and to retrench after a proper process even if you do not agree with the outcome. Consultation is about the process being fair. It does not give you a veto over the decision.

If you cannot afford an attorney

Conciliation at the CCMA is free. Phone 0861 16 16 16. A bargaining council handles disputes in the sectors it covers. Your union will usually run a group retrenchment dispute at no cost to members. The Department of Employment and Labour can help with unpaid severance, notice and leave, and will assist with UIF. Legal Aid South Africa on 0800 110 110 applies a means test. Representation at CCMA arbitration for misconduct and incapacity dismissals is at the commissioner's discretion, but retrenchment disputes often end up in the Labour Court, where representation matters more. See what labour matters cost.

Frequently asked questions

People often ask whether they must attend consultation meetings. You should. Refusing to engage weakens your later case and the employer can proceed without you. Others ask whether the employer can hire new staff after retrenching. Recruiting for the same jobs soon after a retrenchment is strong evidence that the reason was not genuine. A third question is whether they can be retrenched while on parental (maternity) leave or sick leave. The law does not prohibit it, but selection influenced by pregnancy or illness is automatically unfair or discriminatory.