Abstract

It is well established that employers may use workforce reductions for operational reasons as a business tool, provided that they meet the statutory requirements imposed on such terminations of employment. It is also well known that the Labour Relations Act is the primary piece of legislation dealing with the obligations resting on employers in such circumstances. Other legislation may, however, impact on the extent to which retrenchments may serve as a legitimate option or tool for employers. One such piece of legislation is the Competition Act. The competition authorities have gradually developed a body of law that interprets their statutory authority to question the justifiability of retrenchments that occur within entities that find themselves within the area of influence of these authorities — most clearly in the merger context. This has culminated in the publication of draft guidelines for the assessment of public interest provisions in mergers by the Competition Commission. This article summarises and clarifies the respective approaches of each of the labour and competition courts and tribunals to employer decision making in retrenchment situations and highlights the risks associated with developing potentially contradictory legal obligations, both applicable to the same set of facts, in isolation.