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ARTICLE · 26 JUNE 2025

When Cost-Cutting Costs You: Lessons From A Botched Section 189 Process

Barnard Inc.
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Barnard's labour experts recently stepped in after a midsized landlord tried to trim expenses by releasing ten employees.

South AfricaEmployment and HR
Bradley Wright
Bradley Wright
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Barnard's labour experts recently stepped in after a midsized landlord tried to trim expenses by releasing ten employees. The board believed the numbers justified the move, but in its haste to "save the business," management skipped several of the steps that South Africa's Labour Relations Act (LRA) demands. Within weeks the company faced a CCMA referral for unfair dismissal and a potential compensation order running well into seven figures – far higher than the savings it had hoped to bank.

That real-life dispute offers a cautionary tale for any employer contemplating retrenchment. Dismissals for operational requirements are absolutely lawful, yet the LRA sets a strict procedural roadmap. Deviate from it and the dismissal becomes automatically unfair, regardless of how dire your balance sheet looks. Below, we unpack the essentials of a fair Section 189 process, highlight common traps encountered, and suggest practical safeguards executives can implement long

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