The adequacy of the current social plan to address retrenchment challenges in South Africa

The purpose of the Social Plan Guidelines is to manage large-scale retrenchments and ameliorate their effects on employees. In this study a comprehensive literature review and two case studies were conducted to review the theoretical and practical application of the Social Plan. The research findings identified various challenges that inhibit the effective management of retrenchments. These challenges were analysed and interpreted and a new model to effectively manage retrenchments was developed. The new model is centred on a company’s business plan; the concept is a participative performance-driven governance approach between management and employees focusing on business results. The new model suggests that the employment relations management and corporate social investment of an organisation be utilised as vehicles to manage retrenchments effectively.