Mobile Telephone Networks (Pty) Ltd and Others v CCI SA (Umhlanga) (Pty) Ltd and Others (JA 12/2023) [2023] ZALAC 10; (2023) 44 ILJ 1906 (LAC); [2023] 10 BLLR 1006 (LAC) (15 June 2023)

Mobile Telephone Networks (Pty) Ltd and Others v CCI SA (Umhlanga) (Pty) Ltd and Others (JA 12/2023) [2023] ZALAC 10; (2023) 44 ILJ 1906 (LAC); [2023] 10 BLLR 1006 (LAC) (15 June 2023)

The Labour Appeal Court held that section 197 of the Labour Relations Act was not triggered by the termination of the contract between MTN and CCI. Although a discrete MTN business unit existed within CCI, there was no transfer of that business unit as a going concern to MTN, Ibridge, or Ison. The termination resulted only in a redistribution of call volumes among existing service providers, with no transfer of assets, operational capacity, or workforce retaining its identity. The facts did not support the Labour Court's finding that section 197 applied, as the essential elements of a transfer as a going concern were absent. The appeal was upheld and the application dismissed.

Citation
[2023] ZALAC 10
Parties
Appellant: Mobile Telephone Networks (Pty) Ltd; Appellant: Ibridge Contract Solutions (Pty) Ltd; Appellant: Ison Xperiences South Africa (Pty) Ltd; Respondent: CCI SA (Umhlanga) (Pty) Ltd; Respondent: Employees listed in Annex A (Second to 252nd Respondent)
Court
Labour Appeal Court
Jurisdiction
South Africa
Judgment Date
15 June 2023
Case Number
JA 12/2023
Procedural Posture
Civil Appeal / Appeal From Labour Court Judgment
Outcome
Appeal upheld; Labour Court order set aside; application dismissed with no order as to costs.
Judges
Waglay JP, Sutherland JA, Gqamana AJA
Legal Topics
Section 197 Transfer, Outsourcing, Going Concern, Job Security, Contractual Termination
Labour Law Civil Procedure Section 197 Transfer Outsourcing Going Concern Job Security Contractual Termination

Case Brief

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Parties

Mobile Telephone Networks (Pty) Ltd

Appellant

Ibridge Contract Solutions (Pty) Ltd

Appellant

Ison Xperiences South Africa (Pty) Ltd

Appellant

CCI SA (Umhlanga) (Pty) Ltd

Respondent

Employees listed in Annex A (Second to 252nd Respondent)

Respondent

Procedural Posture

Civil Appeal / Appeal From Labour Court Judgment

Legal Issues

  1. 1 Does section 197 of the Labour Relations Act apply to the termination of the contract between MTN and CCI?
  2. 2 Was there a transfer of a business as a going concern from CCI to MTN, Ibridge, or Ison?
  3. 3 Are the appellants obliged to take over the CCI workforce under section 197?

Ratio Decidendi

The Labour Appeal Court held that section 197 of the Labour Relations Act was not triggered by the termination of the contract between MTN and CCI. Although a discrete MTN business unit existed within CCI, there was no transfer of that business unit as a going concern to MTN, Ibridge, or Ison. The termination resulted only in a redistribution of call volumes among existing service providers, with no transfer of assets, operational capacity, or workforce retaining its identity. The facts did not support the Labour Court's finding that section 197 applied, as the essential elements of a transfer as a going concern were absent. The appeal was upheld and the application dismissed.

Court Disposition

Appeal upheld; Labour Court order set aside; application dismissed with no order as to costs.

Orders

  • The appeal is upheld.
  • The order of the court a quo is set aside in its entirety and substituted by the order: 'The application is dismissed with no order as to costs.'