Section 189 vs 189A: Why Size Changes Everything

When employers start planning retrenchments, they often focus on the commercial problem first: reducing costs, restructuring teams or preserving the business.

Legally, however, one question can change the entire process: are you dealing with section 189 or section 189A? Under the Labour Relations Act, section 189A applies to employers with more than 50 employees if the number of proposed dismissals reaches specified thresholds. Those thresholds range from 10 dismissals for employers with up to 200 employees to 50 dismissals for employers with more than 500 employees. The calculation also includes operational-requirement dismissals in the previous 12 months.

That distinction matters because section 189A is not just a bigger version of section 189. It introduces a more onerous framework for large-scale retrenchments, including possible CCMA facilitation, minimum waiting periods before notice of termination can be given and different dispute pathways. In other words, once size changes, the risk profile changes with it.

What Section 189 Covers

Section 189 is the general retrenchment framework. It requires an employer contemplating dismissals for operational requirements to consult on issues such as avoiding dismissals, minimising their number, changing timing, mitigating adverse effects, selecting employees fairly and calculating severance pay. It also requires the employer to consider representations and respond, including in writing where written representations are made.

For many employers, that already feels demanding. It should. Retrenchments are one of the most process-sensitive areas of South African labour law, and even under section 189, a procedurally weak process can create serious exposure.

When Section 189A Applies

Section 189A only applies where the employer employs more than 50 employees and is contemplating dismissals at or above the statutory thresholds. Those thresholds are:

• 10 employees, if the employer employs up to 200 employees

• 20 employees, if the employer employs more than 200 but not more than 300

• 30 employees, if the employer employs more than 300 but not more than 400

• 40 employees, if the employer employs more than 400 but not more than 500

• 50 employees, if the employer employs more than 500 employees

This is where employers often get caught out. They assume a retrenchment is “just a section 189 process” without checking whether headcount and numbers push the matter into section 189A territory. That mistake can affect timing, strategy and legal exposure from the outset.

Why Section 189A Is a Different Risk Category

Once section 189A applies, the process becomes materially more complex. The CCMA must appoint a facilitator if the employer requests facilitation in the section 189(3) notice, or if the majority consulting parties request it within 15 days. If a facilitator is appointed, the process is then governed by the Facilitation Regulations.

Timing also changes. Where a facilitator is appointed, the employer may generally only give notice of termination after 60 days have elapsed from the section 189(3) notice. That alone can have major commercial consequences for restructuring plans, budgeting and workforce planning.

Section 189A also expressly provides that, despite the usual limitation in section 65(1)(c), employees may participate in a strike and an employer may lock out in accordance with the section. That means large-scale retrenchments can move into collective power dynamics that do not arise in the same way in ordinary section 189 matters.

Why Employers Get This Wrong

The most common error is assuming the difference between section 189 and 189A is merely administrative. It is not. Once section 189A is triggered, the employer is dealing with a more structured, more visible and often more adversarial process. Facilitation, stricter timelines and collective dispute mechanisms all increase the stakes.

Another common mistake is miscalculating the numbers. Section 189A looks not only at the current proposed dismissals, but also at operational-requirement dismissals in the previous 12 months. Employers who ignore that rolling calculation can underestimate their obligations and only discover the problem once the process is under challenge.

Why Size Changes Strategy

In a smaller retrenchment, an employer may still face serious procedural risk, but the dispute usually remains more contained. In a section 189A matter, the process is far more likely to become strategic, collective and urgent. Facilitation can shape the pace of consultation. A misstep can trigger expedited Labour Court proceedings under section 189A(13), and the regulations expressly contemplate expedited enrolment.

That is why size changes everything. Larger retrenchments are not just bigger in number. They are bigger in complexity, bigger in disruption and bigger in legal consequence.

The Commercial Trap

Employers often assume that if the business rationale is strong enough, the law will accommodate a faster or more practical process. Section 189A is exactly where that assumption starts to fail. The larger the retrenchment, the less room there is for an informal or rushed approach. The statute builds in structure because large-scale dismissals have wider consequences for employees, unions and operations.

That means a business can have a real operational problem and still mishandle the legal process. By the time that is clear, the employer may already be facing delay, pressure from consulting parties and potential litigation that disrupts the broader restructuring plan.

Final Thoughts

Section 189 and section 189A both deal with retrenchments, but they are not interchangeable. Section 189A applies once an employer is above 50 employees and the contemplated dismissals hit the statutory thresholds, and when it applies, the process becomes significantly more complex. Facilitation, waiting periods and different dispute mechanisms mean the margin for error narrows sharply.

For employers, the practical lesson is simple: before launching a retrenchment process, determine exactly which section applies. Getting that wrong at the start can compromise everything that follows.

Need Advice on a Retrenchment Process?

Barter McKellar advises employers on section 189 and section 189A retrenchments, consultation strategy, facilitation processes and Labour Court disputes. If your business is considering restructuring, early advice can make the difference between a controlled process and a costly one.