Retrenchment

What is Retrenchment?

Retrenchment is the reduction of an organisation’s workforce or operations as a cost-cutting measure, typically in response to financial difficulties or strategic restructuring. The term is commonly used in South African, Australian, and Asian employment law contexts as the equivalent of redundancy or layoff. Retrenchment processes are usually governed by specific legal requirements including consultation obligations, fair selection criteria, severance pay provisions, and notice periods. HR is responsible for ensuring that retrenchment procedures comply with local labour legislation and that affected employees are treated with dignity and provided appropriate support.