Dis-Chem, South Africa’s second-largest retail pharmacy chain, says it has invited more than 500 employees to consult in the Section 189 process as it embarks on a restructuring journey.
A Section 189 process is a mandatory, consultative procedure under the Labour Relations Act (LRA) that employers must follow when contemplating dismissals based on operational requirements.
The retailer told The Citizen on Friday that it has a “clear purpose to increase access and reduce the cost of healthcare across South Africa”. Therefore, its operating model, organisational structure and ways of working must remain aligned to its future ambitions, it said.
Dis-Chem restructures business
The retailer said the retrenchment process stemmed from a review of its organisational framework. The review is done to optimise the right structures to ensure continued brand progress.
Chief Executive Officer Rui Morais added that when people hear “Section 189 process”, they immediately think of large-scale retrenchments, and that is not the case at Dis-Chem, as the restructuring will add 200 jobs.
“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,” he said.
Dis-Chem’s new structure
“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, the group’s innovation unit focused on strategic initiatives like Better Rewards,” said Morais.
He added that more than 500 employees in certain head office departments have been invited to consult in the Section 189 process. This represents at least 2.4% of Dis-Chem’s total workforce.
Employees in retail stores and distribution centres will not be affected by retrenchments.
Process could take months to conclude
Morais succeeded Dis-Chem founder Ivan Saltzman in 2023. He was previously the retailer’s CFO.
He noted that restructuring that may result in the retrenchment of employees is subject to a mandatory process under the Labour Relations Act (Section 189) to ensure both procedural and substantive fairness.
“Dis-Chem is at the early stages of this regulated process which can take months to conclude,” he said.
“The unfortunate thing about the notice issued to affected employees is that it requires very blunt and rigid language. The process we’re undertaking is designed to ensure that Dis-Chem is optimally structured for future growth and success, aligned to its strategic priorities.”
