Rights of employees whose jobs have been outsourced

What are the rights of employees who previously carried out services that have been outsourced?  Is there any right to consultation or compensation, do the rules apply to all employees within the jurisdiction?

Where services are outsourced, employees’ services are terminated due to ‘operational requirements’. This entails that the economic, technological, structural or similar needs of an employer must have given rise to the employment being terminated and the services outsourced. Employers are bound by the provisions of section 189 of the Labour Relations Act 66/1995 to follow a process of consultation in such circumstances.

In terms of the Basic Conditions of Employment Act 75/1997 an employer must pay an employee who is dismissed for reasons of operational requirements severance pay equal to at least one week’s remuneration for each completed year of continuous service with that employer, calculated in accordance with the provisions of this act. In the event of an unreasonable refusal by an employee to accept the employer’s offer of alternative employment with that employer or any other employer, the employee is not entitled to severance pay.

These rules apply to all employees who work 24 hours or more per month.

Reproduced with permission from Law Business Research. This article was first published in Getting the Deal Through – e-Commerce 2009, (published in August 2008 – contributing editor Robert Bond). For further information please visit www.GettingtheDealThrough.com.