By Lehlohonolo Lehana.
The JSE-listed retail pharmaceutical group Dis-chem confirmed that it had instituted a Section 189 process, that could affect some its 22 000 staff members.
Section 189 process under the Labour Relations Act (LRA) allow all employers to follow this mandatory consultative process before retrenching employees.
In a statement released on Friday, 24 April, Dis-Chem explained that this is part of the retailer’s strategy evolution.
To strengthen its operations, the company said it is important that its operating model, organisational structure, and ways of working remain aligned to its future ambitions.
“To support growth and competitiveness in a dynamic market, it is reviewing its organisational framework to optimise the right structures to ensure continued brand progress,” Dis-Chem said.
Therefore, aligned with this review, the company has instituted a Section 189 process.
“Without context, when people hear Section 189, they immediately default to large-scale retrenchments,” CEO Rui Morais said.
“The process we’re undertaking is designed to enable a new head office operating model, which will see an additional 200 jobs added to key head office departments in areas of the business where we have historically underinvested.”
Dis-Chem said just over 500 employees in certain head office departments, which represent less than 2.4% of the company’s total workforce, have been invited to consult in the Section 189 process.
“This process does not affect retail stores and distribution centres,” the company said.
Morais said a key outcome of this process will be a new structure with clear lines of accountability, which also enables better integration with X, bigly labs.
X, bigly labs is Dis-Chem’s innovation unit focused on strategic initiatives like Better Rewards.
“The unfortunate thing about a Section 189(3) Notice – the notice issued to affected employees – is that it requires very blunt and rigid language,” Morais said.
The company said it remains committed to meaningful consultation with those impacted by the process and exploring alternatives to retrenchment,” focusing instead on reshaping the firm’s architecture to secure long-term market growth.