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South Africa Ruling

Labour Court Johannesburg

Imvula Quality Protection and Others v University of South Africa (J435/17) [2017] ZALCJHB 352 (26 September 2017)

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Professional case brief

Research organized from the available case record

Source document

01

Holding and result

The court found that the application of section 197 of the Labour Relations Act to the insourcing of services, where only some employment contracts are transferred, has not been considered by a higher court. The issue requires legal certainty, particularly for tertiary institutions and other employers who may undertake similar insourcing exercises. Given the importance and novelty of the legal question, the court determined that there is a compelling reason for leave to appeal, irrespective of the prospects of success.

Court disposition

Leave to appeal granted.

Orders

  • Leave to appeal is granted.
  • Costs to be costs in the appeal.

02

Material facts

Parties

Imvula Quality Protection

Applicant

Persons listed in Annex A

Applicant

Red Alert TSS (Pty) Ltd

Applicant

Persons listed in Annex B

Applicant

University of South Africa

Respondent

03

Procedural history

  1. Posture

    Leave to Appeal / Application for Leave to Appeal Following Judgment

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicants contend that the judgment incorrectly applied section 197 of the Labour Relations Act to the insourcing of services, particularly where only some employment contracts are transferred. They argue that the matter raises important questions of law that require clarification by a higher court.
Respondent
The respondent maintains that the judgment correctly interpreted section 197 and that there is no compelling reason for leave to appeal, as the prospects of success are not reasonable and the matter does not warrant further consideration.

05

Court’s reasoning

  1. 01

    Section 17(1)(a)(ii) of the Superior Courts Act, 10 of 2013

    Leave to appeal may be granted if there is a compelling reason, other than reasonable prospects of success, for the appeal to be heard.

  2. 02

    Section 197 of the Labour Relations Act, 66 of 1995

    Section 197 of the Labour Relations Act governs the transfer of contracts of employment in the context of business transfers.

06

Ratio, limits and disposition

Ratio decidendi

The court found that the application of section 197 of the Labour Relations Act to the insourcing of services, where only some employment contracts are transferred, has not been considered by a higher court. The issue requires legal certainty, particularly for tertiary institutions and other employers who may undertake similar insourcing exercises. Given the importance and novelty of the legal question, the court determined that there is a compelling reason for leave to appeal, irrespective of the prospects of success.

Obiter and limits

  • The application of section 197 in insourcing scenarios is a matter of general importance for employers and employees beyond the parties to this case.
  • Certainty in the law is necessary for institutions considering similar restructuring exercises.

Court disposition

Leave to appeal granted.

  • Leave to appeal is granted.
  • Costs to be costs in the appeal.

Source and reliance status

Labour Court Johannesburg

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Judgment reading view

Judgment text

The complete available source text.

Source document

Labour Court Johannesburg

Ruling

[2017] ZALCJHB 352

REPUBLIC

OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not reportable

Case no: j 435/17

In the matter between:

IMVULA

QUALITY PROTECTION First

Applicant

PERSONS

LISTED IN ANNEX A Second

to further Applicants

RED ALERT TSS (PTY) LTD

First

Intervening Applicant

PERSONS

LISTED IN ANNEX B

Second to further Intervening Applicants

And

UNIVERSITY

OF SOUTH

AFRICA

Respondent

Delivered: 26 September 2017

RULING:

APPLICATION FOR LEAVE TO APPEAL

VAN

NIEKERK J

[1] The applicants apply for leave to appeal against the whole of the judgment delivered by this court on 7 September 2017.

[2] An application for leave to appeal falls to be considered in terms of s 17 of the Superior Courts Act, 10 of 2013. Section 17 (1) (a)(ii) provides that leave to appeal may be given is there is some compelling reason, other than that the appeal would have a reasonable prospect off success, why the appeal should be heard.

[3] I do not intend to make any findings in relation to the grounds for appeal on which the applicant relies. The present matter concerns the application of s 197 of the LRA to an insourcing of services in circumstances where the only subject of any transfer is, in effect, the contracts of employment of some but not all of the employees engaged by the outgoing service provider. The application of s 197 in these circumstances has not, as far as I am aware, been the subject of consideration by a higher court. Further, the application or otherwise of s 197 in these circumstances is a matter which requires certainty, not only for tertiary institutions such as the respondent many of whom have undertaken or will undertake similar exercises, but for employers and employees more generally.

[4] For these reasons, I have decided to grant the application for leave to appeal.

I make the following order:

1. Leave to appeal is granted, costs to be costs in the appeal.

André van Niekerk

Judge

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Authorities

Authorities used by the court

Cases, legislation, regulations, and constitutional provisions identified in the available record.

Superior Courts Act, 10 of 2013

Legislation

Legislation referenced in the available case record.

Labour Relations Act, 66 of 1995

Legislation

Legislation referenced in the available case record.

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