[vc_row row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern” css_animation=””][vc_column width=”3/4″][vc_row_inner row_type=”row” type=”full_width” text_align=”left” css_animation=”” css=”.vc_custom_1470385563345{margin-bottom: 20px !important;}”][vc_column_inner width=”1/12″][icons icon=”fa-file-pdf-o” size=”fa-2x” type=”normal” link=”https://www.gabrielco.legal/wp-content/uploads/2016/08/a-quick-guide-to-retrenchment-in-tanzania.pdf” anchor_icon=”yes” target=”_self”][/vc_column_inner][vc_column_inner width=”11/12″][vc_column_text]Download article in PDF[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner row_type=”row” type=”full_width” text_align=”left” css_animation=””][vc_column_inner][vc_column_text]Labour law in Tanzania is generally employee friendly and very procedurally specific. An error in procedure followed can result in a seemingly well-intentioned action being overturned by the relevant authorities, resulting in untold financial burdens on your Company. One area where a procedural error can be onerous on a company is during the process of retrenchment. Retrenchment is the termination of an employee, employees or group of employees due to an operational requirement. In Tanzania retrenchment is provided for under section Sect 38 of Employment and Labour Relations Act, Act No. 6 of 2004 , read together with Rule 23, 24 & 25 ELRA (Code of Good Practice) GN. 42/2007}. The law in Tanzania allows an employer to retrench on the following grounds:
- Financial constraints
- Technological changes
- Restructuring of the business
- Mergers and acquisition
- Closing of business
RETRENCHMENT PROCEDURE
In the event an employer decides to retrench an employee, employees and or a group of employees, the employer is required to do the following:
- Give notice of any intention to retrench as soon as it is contemplated;
- Disclose all relevant information on the intended retrenchment for the purpose of proper consultation;
- Consult prior to retrenchment.
The Consultation contemplated by the Act is to be undertaken with a recognized trade union pursuant to section 67 of the Act, any registered trade union with members at the work-place who are not represented by a recognized trade union and any employees who are not represented by the recognized trade union or any registered union. The purpose of consultation is to permit employers and employees to undertake a joint problem solving exercise so as to reach agreement on :
(a) The reasons for intended retrenchment
(b) Measures to avoid or minimize intended retrenchment
(c) Criteria for selecting employees to be retrenched
(d) The timing of retrenchments
(e) Severance and other condition for terminating employee’s contracts.
In the event where parties to consultation have failed to reach mutual agreement, an employer is required to refer the matter for mediation before the Commission for Mediation and Arbitration (CMA). Where mediation fails, the dispute shall be referred to an arbitrator for compulsory arbitration, which shall be concluded within a sixty-day period during which no retrenchment shall take effect. The employer can proceed to retrench if arbitration exceeds 60 days.
TERMINAL BENEFITS
Employees terminated due to an operational requirement are entitled to;
• Remuneration for work done before termination,
• Severance pay,
• Notice pay,
• Leave accrued but not taken,
• Repatriation cost
• Certificate of service
RETRECHMENT DOCUMENTS CHECKLIST
We strongly urge that all employers intending to retrench employees maintain a document checklist so as to ensure that all requisite procedures have been followed to the letter of the law. In the short the checklist is as follows:
- General notice to all employees
- Invitation to consultation to affected employees
- Retrenchment agreement
- Termination letter
For purposes of records and proof, employers must make sure they keep minutes of all meetings and that minutes are signed, and that all attendees of all relevant meetings sign attendance registers.
CONCLUSION
For retrenchment to be fair it must be procedural and substantively fair, therefore it is very important for the employer to follow the procedures as stipulated by the law to the letter of the law. Should an employer decide to re-hire employees with comparable qualifications to those of persons previously retrenched then preference must be given to those previously retrenched employees. Gabriel and Co. offers a variety of advisory services related to labour relations and employment matters. Should you need any assistance at any stage of a matter please feel free to contact Ms Oliva Mkula Mkanzabi at oliva.mkanzabi@gabrielco.legal.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][vc_column width=”1/4″][vc_row_inner row_type=”row” type=”full_width” text_align=”left” css_animation=””][vc_column_inner][vc_single_image image=”15914″ img_size=”large” alignment=”center” onclick=”custom_link” qode_css_animation=””][/vc_column_inner][/vc_row_inner][vc_column_text]PARTNER – ADVOCATE
MS. OLIVA MKULA MKANZABI
RELATED PRACTISING AREAS:
Employment and Labour[/vc_column_text][/vc_column][/vc_row]