Associated Computer Solutions (PTY) Ltd and Others v Man Truck and Bus (SA) (PTY) Ltd and Another (1 August 2022) (J 808/22) [2022] ZALCJHB 203 (1 August 2022)

Associated Computer Solutions (PTY) Ltd and Others v Man Truck and Bus (SA) (PTY) Ltd and Another (1 August 2022) (J 808/22) [2022] ZALCJHB 203 (1 August 2022)

The court found that the termination of the agreement between ACS and MAN did not constitute a transfer of business as a going concern under section 197 of the Labour Relations Act. The Embrace ERP Service Desk, after outsourcing, became part of ACS's broader service desk, servicing multiple clients and lacking a discrete economic identity. Upon termination, no assets, technology, or employees would transfer to MAN, and the affected employees would not be able to render the same services on MAN's new SAP system. The retention of 30 Embrace licences by MAN was solely for accessing historical data and did not require ongoing support services. ACS retained its business and was free to...

Citation
[2022] ZALCJHB 203
Parties
Applicant: Associated Computer Solutions (PTY) Ltd; Applicant: Sephesihle Vilikazi; Applicant: Anna-Marie Georgina Opperman; Applicant: Kathlean Eschner; Respondent: Man Truck and Bus (SA) (PTY) Ltd; Respondent: Man Automotive (SA) (PTY) Ltd
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
1 August 2022
Case Number
J 808/22
Procedural Posture
Urgent Application / Final Determination on Urgent Application
Outcome
Application dismissed with costs awarded against the First Applicant.
Judges
Prinsloo
Legal Topics
Section 197 Transfer, Outsourcing and Insourcing, Employment Continuity, Contract Termination, Business as Going Concern
Labour Law Commercial and Corporate Section 197 Transfer Outsourcing and Insourcing Employment Continuity Contract Termination Business as Going Concern

Case Brief

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Parties

Associated Computer Solutions (PTY) Ltd

Applicant

Sephesihle Vilikazi

Applicant

Anna-Marie Georgina Opperman

Applicant

Kathlean Eschner

Applicant

Man Truck and Bus (SA) (PTY) Ltd

Respondent

Man Automotive (SA) (PTY) Ltd

Respondent

Procedural Posture

Urgent Application / Final Determination on Urgent Application

Legal Issues

  1. 1 Whether the termination of the outsourced Embrace ERP Service Desk agreement between ACS and MAN constitutes a transfer of business as a going concern under section 197 of the Labour Relations Act.
  2. 2 Whether the employment contracts of the affected employees should automatically transfer from ACS to MAN upon termination of the agreement.
  3. 3 Whether the retention of 30 Embrace licences by MAN post-termination triggers section 197 obligations.

Ratio Decidendi

The court found that the termination of the agreement between ACS and MAN did not constitute a transfer of business as a going concern under section 197 of the Labour Relations Act. The Embrace ERP Service Desk, after outsourcing, became part of ACS's broader service desk, servicing multiple clients and lacking a discrete economic identity. Upon termination, no assets, technology, or employees would transfer to MAN, and the affected employees would not be able to render the same services on MAN's new SAP system. The retention of 30 Embrace licences by MAN was solely for accessing historical data and did not require ongoing support services. ACS retained its business and was free to...

Court Disposition

Application dismissed with costs awarded against the First Applicant.

Orders

  • The application is dismissed.
  • The First Applicant is to pay the Second Respondent's costs.