Hydro Colour Inks (Pty) Ltd v Chemical, Energy, Paper, Printing, Woods And Allied Workers Union (JA48/07, JA77/09) [2011] ZALAC 14; [2011] 7 BLLR 637 (LAC); (2011) 32 ILJ 1625 (LAC) (18 April 2011)

Hydro Colour Inks (Pty) Ltd v Chemical, Energy, Paper, Printing, Woods And Allied Workers Union (JA48/07, JA77/09) [2011] ZALAC 14; [2011] 7 BLLR 637 (LAC); (2011) 32 ILJ 1625 (LAC) (18 April 2011)

The court found that the facts demonstrated a transfer of business as a going concern from Keep Inks to Hydro Colour Inks (Pty) Ltd. The appellant operated from the same premises, used the same equipment, employed the same workforce, and continued the same business activities as Keep Inks. The overlap in customers, suppliers, and management further supported this conclusion. Section 197A of the Labour Relations Act applies in cases of insolvency, and the new employer is automatically substituted in the place of the old employer for contracts of employment existing immediately before winding up. The reinstatement orders obtained by the employees prior to winding up restored their contracts...

Citation
[2011] ZALAC 14
Parties
Appellant: Hydro Colour Inks (Pty) Ltd; Respondent: Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union
Court
Labour Appeal Court
Jurisdiction
South Africa
Judgment Date
18 April 2011
Case Number
JA48/07, JA77/09
Procedural Posture
Civil Appeal / Appeal From Labour Court Judgments (francis J and Molahlehi J), Consolidated
Outcome
Appeal dismissed. Labour Court order upheld and interpreted to include Molefe as a beneficiary. Costs awarded against appellant for the Francis J appeal; no costs order for the Molahlehi J appeal.
Judges
Tlaletsi, Zondi, Molemela
Legal Topics
Transfer of Business as Going Concern, Section 197a, Insolvency and Employment, Automatic Substitution of Employer, Reinstatement Orders, Contract of Employment
Labour Law Civil Procedure Transfer of Business as Going Concern Section 197a Insolvency and Employment Automatic Substitution of Employer Reinstatement Orders Contract of Employment

Case Brief

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Parties

Hydro Colour Inks (Pty) Ltd

Appellant

Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union

Respondent

Procedural Posture

Civil Appeal / Appeal From Labour Court Judgments (francis J and Molahlehi J), Consolidated

Legal Issues

  1. 1 Whether there was a transfer as a going concern of the business of Keep Inks to Hydro Colour Inks (Pty) Ltd.
  2. 2 Whether section 197A of the Labour Relations Act applies to the transfer in circumstances of insolvency.
  3. 3 Whether the new employer is automatically substituted in the place of the old employer in contracts of employment existing immediately before winding up.

Ratio Decidendi

The court found that the facts demonstrated a transfer of business as a going concern from Keep Inks to Hydro Colour Inks (Pty) Ltd. The appellant operated from the same premises, used the same equipment, employed the same workforce, and continued the same business activities as Keep Inks. The overlap in customers, suppliers, and management further supported this conclusion. Section 197A of the Labour Relations Act applies in cases of insolvency, and the new employer is automatically substituted in the place of the old employer for contracts of employment existing immediately before winding up. The reinstatement orders obtained by the employees prior to winding up restored their contracts...

Court Disposition

Appeal dismissed. Labour Court order upheld and interpreted to include Molefe as a beneficiary. Costs awarded against appellant for the Francis J appeal; no costs order for the Molahlehi J appeal.

Orders

  • The appeal against the judgment and order of Francis J is dismissed with costs.
  • No order as to costs in the appeal against the judgment and order of Molahlehi J.