Communication Workers Union ("CWU") and Others v Mobile Telephone Networks (Pty) Ltd ("MTN") and Another (DA10/13) [2015] ZALAC 8; (2015) 36 ILJ 1819 (LAC) (21 April 2015)

Communication Workers Union ("CWU") and Others v Mobile Telephone Networks (Pty) Ltd ("MTN") and Another (DA10/13) [2015] ZALAC 8; (2015) 36 ILJ 1819 (LAC) (21 April 2015)

The Labour Appeal Court found that Interaction Call Centre operated a discrete business for MTN, with its own management, personnel, and operational methods, despite using MTN's infrastructure and having only one client. The contractual arrangements and factual matrix demonstrated that the business was sufficiently autonomous. Upon termination of the agreement, MTN resumed the call centre operations, employing a significant portion of the former staff and agents. This constituted a transfer of business as a going concern under section 197 of the LRA. The refusal of re-employment or acceptance of retrenchment packages by some employees did not negate the automatic transfer of employment...

Citation
[2015] ZALAC 8
Parties
Appellant: Communication Workers Union ("CWU"); Appellant: K Pillay and Others; Respondent: Mobile Telephone Networks (Pty) Ltd ("MTN"); Respondent: Interaction Call Centre (Pty) Limited
Court
Labour Appeal Court
Jurisdiction
South Africa
Judgment Date
21 April 2015
Case Number
DA10/13
Procedural Posture
Civil Appeal / Appeal From Labour Court Judgment
Outcome
Appeal upheld; Labour Court order set aside; declaration of transfer under section 197 granted.
Judges
Waglay, Davis, Ndlovu
Legal Topics
Automatic Transfer of Employment, Business as Going Concern, Section 197 Lra, Unfair Dismissal, Contractual Obligations, Employee Rights
Labour Law Automatic Transfer of Employment Business as Going Concern Section 197 Lra Unfair Dismissal Contractual Obligations Employee Rights

Case Brief

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Parties

Communication Workers Union ("CWU")

Appellant

K Pillay and Others

Appellant

Mobile Telephone Networks (Pty) Ltd ("MTN")

Respondent

Interaction Call Centre (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Labour Court Judgment

Legal Issues

  1. 1 Whether the termination of the service agreement and resumption of the call centre by MTN constituted a transfer of business as a going concern under section 197 of the LRA.
  2. 2 Whether the employees of Interaction Call Centre (Pty) Ltd should be automatically transferred to MTN with no loss of service.
  3. 3 Whether the refusal of re-employment or acceptance of retrenchment packages affects the application of section 197.

Ratio Decidendi

The Labour Appeal Court found that Interaction Call Centre operated a discrete business for MTN, with its own management, personnel, and operational methods, despite using MTN's infrastructure and having only one client. The contractual arrangements and factual matrix demonstrated that the business was sufficiently autonomous. Upon termination of the agreement, MTN resumed the call centre operations, employing a significant portion of the former staff and agents. This constituted a transfer of business as a going concern under section 197 of the LRA. The refusal of re-employment or acceptance of retrenchment packages by some employees did not negate the automatic transfer of employment...

Court Disposition

Appeal upheld; Labour Court order set aside; declaration of transfer under section 197 granted.

Orders

  • The appeal is upheld with costs.
  • The order of the Labour Court is set aside and replaced with a declaration that there was a transfer of a business as a going concern by Interaction Call Centre (Pty) Ltd to MTN, falling within section 197 of the Labour Relations Act 66 of 1995.