Enviroserv Waste Management v Interwaste (Pty) t/a Interwaste Environmental Solutions and Others (P408/15) [2015] ZALCPE 66; (2016) 37 ILJ 959 (LC) (18 December 2015)

Enviroserv Waste Management v Interwaste (Pty) t/a Interwaste Environmental Solutions and Others (P408/15) [2015] ZALCPE 66; (2016) 37 ILJ 959 (LC) (18 December 2015)

The court found that the applicant's activities at the second respondent's sites were performed solely in terms of a time-limited service agreement and did not constitute a business capable of transfer as a going concern under section 197 of the LRA. The first respondent's contract would commence with different operational methods, staff, and strategies, and no assets, goodwill, or intellectual property would be transferred. The applicant's employees were on fixed-term contracts tied to the duration of the service agreement, and their expectation of transfer was unreasonable. The court concluded that the termination of the service agreement and the award of a new contract to the first...

Citation
[2015] ZALCPE 66
Parties
Applicant: Enviroserv Waste Management; Respondent: Interwaste (Pty) Ltd t/a Interwaste Environmental Solutions; Respondent: General Motors South Africa (Pty) Ltd; Respondent: V.O’ Connel and 21 Others
Court
Labour Court Port Elizabeth
Jurisdiction
South Africa
Judgment Date
18 December 2015
Case Number
P408/15
Procedural Posture
Urgent Application / Application for Declaratory Relief Under Section 197 of the LRA
Outcome
Application dismissed with costs awarded against the applicant.
Judges
Lallie
Legal Topics
Section 197 Transfer, Fixed Term Contracts, Outsourcing, Business as Going Concern, Employee Expectation, Costs Order
Labour Law Civil Procedure Section 197 Transfer Fixed Term Contracts Outsourcing Business as Going Concern Employee Expectation Costs Order

Case Brief

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Parties

Enviroserv Waste Management

Applicant

Interwaste (Pty) Ltd t/a Interwaste Environmental Solutions

Respondent

General Motors South Africa (Pty) Ltd

Respondent

V.O’ Connel and 21 Others

Respondent

Procedural Posture

Urgent Application / Application for Declaratory Relief Under Section 197 of the LRA

Legal Issues

  1. 1 Whether the termination of a service agreement and subsequent award of a new contract to another service provider constitutes a transfer of business as a going concern under section 197 of the LRA.
  2. 2 Whether the applicant's employees are entitled to automatic transfer to the new service provider under section 197.
  3. 3 Whether the nature of the applicant's operations at the second respondent's site constitutes a business capable of transfer under section 197.

Ratio Decidendi

The court found that the applicant's activities at the second respondent's sites were performed solely in terms of a time-limited service agreement and did not constitute a business capable of transfer as a going concern under section 197 of the LRA. The first respondent's contract would commence with different operational methods, staff, and strategies, and no assets, goodwill, or intellectual property would be transferred. The applicant's employees were on fixed-term contracts tied to the duration of the service agreement, and their expectation of transfer was unreasonable. The court concluded that the termination of the service agreement and the award of a new contract to the first...

Court Disposition

Application dismissed with costs awarded against the applicant.

Orders

  • The application is dismissed.
  • The applicant is ordered to pay the first respondent's costs.