Document background
The Retrenchment Letter Due To Financial Crisis is a crucial document used in South African business operations when companies face severe financial difficulties necessitating workforce reduction. This document is governed by the Labour Relations Act 66 of 1995, particularly Section 189, and must be prepared in accordance with strict legal requirements. It is typically issued following a formal consultation process and should clearly articulate the business case for retrenchment, specific terms of the termination, and all statutory benefits. The letter serves as official documentation of the retrenchment process and protects both employer and employee interests. It should be used when all alternative measures to avoid job losses have been exhausted and the company can demonstrate genuine operational requirements based on economic, technological, structural, or similar needs. The document's content and format must reflect the requirements of South African labor law while maintaining a professional and compassionate tone.
