Communications Workers Union v MTN (DA10/13) [2015] ZALAC 65 (21 April 2015)

Communications Workers Union v MTN (DA10/13) [2015] ZALAC 65 (21 April 2015)

The court found that Interaction Call Centre operated a discrete business for MTN, with its own management, personnel, and operational methods, as evidenced by the service agreement. Upon termination of the agreement, MTN took over the business, including employees and agents, and continued the same services without substantial interruption. The fact that Interaction used MTN's infrastructure and had only one client did not detract from its status as a discrete business. Therefore, the transfer constituted a transfer of business as a going concern under section 197 of the LRA, and the affected employees were automatically transferred to MTN with no loss of service.

Citation
[2015] ZALAC 65
Parties
Appellant: Communications Workers Union; Appellant: K Pillay and Others; Respondent: Mobile Telephone Networks (Pty) Ltd; 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; order of the Labour Court set aside and replaced.
Judges
Waglay, Davis, Ndlovu
Legal Topics
Transfer of Business as Going Concern, Automatic Transfer of Employment, Section 197 Lra, Unfair Dismissal, Contractual Obligations, Employment Status
Labour Law Transfer of Business as Going Concern Automatic Transfer of Employment Section 197 Lra Unfair Dismissal Contractual Obligations Employment Status

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Parties

Communications Workers Union

Appellant

K Pillay and Others

Appellant

Mobile Telephone Networks (Pty) Ltd

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 call centre operations by MTN constituted a transfer of business as a going concern under section 197 of the LRA.
  2. 2 Whether the affected employees were automatically transferred to MTN with no loss of service.
  3. 3 Whether the refusal of re-employment and payment of retrenchment packages affected the application of section 197.

Ratio Decidendi

The court found that Interaction Call Centre operated a discrete business for MTN, with its own management, personnel, and operational methods, as evidenced by the service agreement. Upon termination of the agreement, MTN took over the business, including employees and agents, and continued the same services without substantial interruption. The fact that Interaction used MTN's infrastructure and had only one client did not detract from its status as a discrete business. Therefore, the transfer constituted a transfer of business as a going concern under section 197 of the LRA, and the affected employees were automatically transferred to MTN with no loss of service.

Court Disposition

Appeal upheld; order of the Labour Court set aside and replaced.

Orders

  • It is declared 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.
  • Second and further appellants are declared in law to be employees of MTN effective from 1 December 2010 with no loss of service.