Guest: Reece May, Senior Associate in the Competition Law practice at leading corporate and commercial law firm Cliffe Dekker Hofmeyr

For Legal feature this week we unpack the topic of unemployment and how South Africa faces one of the highest unemployment rates in the world. This is the primary reason the Competition Commission must consider the effect on employment when evaluating a proposed merger.

According to our guest this evening, it has become standard practice in South Africa when there is a merger for restrictions to be imposed by the competition authorities – especially in respect of retrenchments. Competition authorities and courts have often had to decide whether a retrenchment is due to a merger or just a regular operational change. They look at both the facts and the law, but the main focus is always on what likely caused the job cuts. Reasonably, they allow retrenchments that aren't linked to a merger. All proposed retrenchments should be disclosed in a merger filing, along with evidence as to why such job losses are not merger-specific.