In terms of s41(4) of the BCEA, an employee, who unreasonably refuses to accept an employer’s offer of alternative employment with that employer or any other employer, is not entitled to severance pay.
Is a binding agreement between a retrenching employer and the alternative employer required for the above section to be applicable and what role does the retrenching employer have to play in arranging alternative employment for such section to be applicable?
_____________________________________
- The labour court recently, in Servest Landscaping Turf Maintenance (Pty) Ltd v SACCAWU (2023) 34 SALLR 77 (LC); (2023) 44 ILJ 380 (LC), adopted the following approach:
- a distinction is to be drawn between the scenario where the retrenching employer plays a role in arranging alternative employment with another employer and the scenario that existed in Irvin & Johnson Ltd v CCMA and Others (2006) 17 (3) SALLR 1 (LAC); (2006) 27 ILJ 935 (LAC) (where the retrenching employer made it a condition that the successful bidder for service it was outsourcing would have to employ all its existing staff)
- the Irvin & Johnson judgment (LAC) is thus only authority for the viewpoint that the absence of such mutually binding undertaking entails that the retrenched employees will still be entitled to severance pay in terms of s41(4) of the BCEA
- on the other hand, the labour court confirmed the approach adopted by the labour appeal court, in Vergenoeg vir Seniors v Stone and Others (JA45/08) [2010] ZALAC 35 (4 June 2010), to the effect that the retrenching employer is not required to pay severance pay if it ‘arranged’ the alternative employment and such offer was brought about as a result of its efforts
- In casu, the labour court came to the following conclusions:
- a collaborative process was underway between the retrenching employer and the new employer to hold interviews and to make offers to employees facing retrenchment
- the retrenching employer had set the ball rolling by approaching the new employer to take on the staff it could not accommodate
- the retrenching employer kept a close eye on the new employer’s recruitment of its staff and made its facilities and premises available
- there was no evidence that interviews had in fact been a barrier to employment
- consequently, the labour court in casu held that there was no obligation on the retrenching employer to pay the requisite severance pay in terms of s41(4) of the BCEA
