How to survive retrenchment

Some experts claim that, in today’s dynamic workplace, we can expect to be retrenched up to three times in our careers. Three times! A scary thought. But by now, even if you aren’t at all interested in finance, the phrases ‘global economic meltdown’, ‘credit crunch’ and ‘financial crisis’ will be all too familiar.

It’s not personal

‘Our Labour Courts have held that retrenchments can be carried out to make a business more profitable, not just to survive an economic downturn,’ explains labour attorney Alexander Rocher of Farrell & Associates, a Durban-based firm specialising in labour law. He adds that employers enjoy a managerial prerogative to run their business as they see fit, and the Labour Courts are reluctant to second-guess the ‘business decision’ of the employer.

In the Labour Relations Act, retrenchments are defined as ‘dismissals based on the employer’s operational requirements’.

But how does it affect you?

‘Business had not been good, but when I received my letter informing me that I was being retrenched, it came as a terrible shock,’ says Kayla*, 28, a former customer services representative at a car dealership in Durban, who was retrenched in December last year. Kayla admits she’s having a hard time coming to terms with it. ‘I always thought it was something that happened to other people. I feel shattered and traumatised.’

Is Kayla overreacting? ‘No’, says Dr Gloria Marsay, Jo’burg psychologist and a leading expert on careers. A traumatic stressor is generally defined as an event which involves actual or threatened death, serious injury or a threat to personal integrity, she says. ‘But traumatic events most often are not anticipated and come as a shock, leaving one with a variety of feelings, including a sense of horror and of being out of control.

So, if we use this definition, being retrenched can be traumatic for some people.’ Along with Kayla’s retrenchment package came feelings of worthlessness, low self-esteem, diminished confidence and an overwhelming sense of loss. ‘There is a huge hole in my life where my job used to be,’

Kayla says, ‘I don’t quite know who or what I am, or where I’m going.’ An identity crisis? Marsay explains: ‘Retrenchment is about the loss of livelihood, but since your career and work is an extension of your identity and being, retrenchment represents a serious threat to personal integrity and self-worth.

Many experience retrenchment as losing something central to their lives, quite simply because they have.’ Anxiety is also part of it. ‘I am hugely anxious about the future – about whether I will find a job before my money runs out and whether it will pay well enough,’ says Kayla.

Why do I feel like I’m in mourning?

Prabashnie*, 35, an IT consultant at an IT solutions company based in Umhlanga, identifies with what Kayla is going through. ‘I was retrenched when the financial services company I worked for merged with a larger organisation based in Johannesburg. Job losses ensued as the company ‘streamlined’ operations. After the initial shock came bucketfuls of tears. Then anger: how could they do this to me?!’

Marsay says it is common for people who have been retrenched to experience all the stages of grief described by Swiss psychiatrist Elizabeth Kübler-Ross (author of the seminal On Death and Dying), in varying intensities: denial, anger, bargaining, depression and, eventually, acceptance.

Furthermore, says Marsay, because retrenchment is a deeply traumatic experience for some people, it often shatters a person’s fundamental assumption that the world is benevolent and meaningful. The grieving process, Marsay says, may vary in length depending on both a person’s natural resilience and their social support structure.

Are there rules about how it’s handled?

The retrenchment process is regulated by the Labour Relations Act, which exists, above all, to give effect to Section 23 of our Constitution, which stipulates that everybody has the right to fair labour practices, says Rocher. Section 189 sets out a ‘recipe’ to achieve this fair procedure, he says.’

Employers must consult with employees when they contemplate retrenchment – the rationale being that it allows employees an opportunity to respond before a decision is taken; certain information must be given to employees to enable them to consult meaningfully; and fair and objective selection criteria must be used when selecting employees for retrenchment,’ he says.

‘I’m not sure that there is a nice way of retrenching people,’ agrees Marsay. ‘However, it is important for management to maintain good communication with staff.’

When it comes to severance pay, ‘an employee is entitled to one week’s wages for every completed year of service,’ says Rocher, ‘but also notice pay and accrued leave pay and, if there is a contractual right, pro-rata bonus.’ On top of that, if there’s another agreement that’s applicable (such as a bargaining council that may have negotiated terms and conditions over and above the minimum standards), it will apply. ‘You’re also entitled to a “Section 42: Certificate of Service”,’ says Rocher. ‘This certifies that you were employed by your company for a certain period of time and earned a certain amount of money. Reason for termination need not be stated.’

Marsay stresses the importance of assisting staff with psychological support and helping them find new ways of becoming financially independent. But in the real world, this is rarely provided. As Rocher puts it, ‘in terms of what’s required by law, counselling, training and re-skilling retrenched staff don’t enter the picture’.

New beginnings

Marsay points out that, ‘although at the time it is very hard, many people look back and see how retrenchment shifted them into a new gear, propelling them in a new direction and invoking a greater sense of purpose.’ Happily, Prabashnie turned her retrenchment into a career rebirth. ‘It was tough’, she says. I was unemployed for three months before I found a part-time IT position. Then I found a job as an IT assistant – a junior post, but I was grateful to have been offered permanent, full-time work. ‘Gradually,my confidence returned, I continued networking and then, last year, a fantastic entrepreneurial opportunity to become part of a new IT solutions company came my way.

‘Going through this process was frightening but humbling. I have learned to be grateful, that everything happens for a reason, and to take my chances when they come. I was in a comfort zone before...I doubt I would’ve taken the leap of faith needed to do the work I’m doing now if I hadn’t been forced to move on.’