Mokhele and Others v Schmidt NO and Another (JS564/11) [2016] ZALCJHB 196; (2016) 37 (ILJ) 2662 (LC) (19 May 2016)

Mokhele and Others v Schmidt NO and Another (JS564/11) [2016] ZALCJHB 196; (2016) 37 (ILJ) 2662 (LC) (19 May 2016)

The court found that the business of Archstone Manufacturing (Pty) Ltd was transferred as a going concern to Paving Warehouse CC, as the substance of the transaction involved the continuation of the same business, products, premises, and workforce, despite the form being a purchase of assets. The dismissals of the applicants were effected to avoid the consequences of section 197A and were therefore automatically unfair in terms of section 187(1)(g) of the Labour Relations Act. The contracts of employment ought to have transferred automatically to the second respondent, and the applicants are entitled to retrospective remuneration equivalent to two years' salary, rather than reinstatement,...

Citation
[2016] ZALCJHB 196
Parties
Applicant: Edgar Thibiri Mokhele and 7 Others; Respondent: Malcolm Schmidt N.O.; Respondent: Paving Warehouse CC
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
19 May 2016
Case Number
JS564/11
Procedural Posture
Trial Civil / Judgment After Trial
Outcome
Applicants' dismissals were automatically unfair; contracts of employment are deemed transferred to the second respondent; applicants awarded retrospective remuneration for 24 months; costs awarded against second respondent.
Judges
Everett
Legal Topics
Automatic Unfair Dismissal, Transfer of Business as Going Concern, Section 197a, Remedies for Unfair Dismissal, Retrospective Remuneration
Labour Law Civil Procedure Automatic Unfair Dismissal Transfer of Business as Going Concern Section 197a Remedies for Unfair Dismissal Retrospective Remuneration

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Parties

Edgar Thibiri Mokhele and 7 Others

Applicant

Malcolm Schmidt N.O.

Respondent

Paving Warehouse CC

Respondent

Procedural Posture

Trial Civil / Judgment After Trial

Legal Issues

  1. 1 Whether the business of Archstone Manufacturing (Pty) Ltd was transferred as a going concern to Paving Warehouse CC.
  2. 2 Whether the applicants' dismissals were automatically unfair in terms of section 187(1)(g) of the Labour Relations Act.
  3. 3 Whether the applicants' contracts of employment ought to have transferred to the second respondent under section 197A.

Ratio Decidendi

The court found that the business of Archstone Manufacturing (Pty) Ltd was transferred as a going concern to Paving Warehouse CC, as the substance of the transaction involved the continuation of the same business, products, premises, and workforce, despite the form being a purchase of assets. The dismissals of the applicants were effected to avoid the consequences of section 197A and were therefore automatically unfair in terms of section 187(1)(g) of the Labour Relations Act. The contracts of employment ought to have transferred automatically to the second respondent, and the applicants are entitled to retrospective remuneration equivalent to two years' salary, rather than reinstatement,...

Court Disposition

Applicants' dismissals were automatically unfair; contracts of employment are deemed transferred to the second respondent; applicants awarded retrospective remuneration for 24 months; costs awarded against second respondent.

Orders

  • The dismissals of the eight applicants by the first respondent were automatically unfair in terms of section 187(1)(g).
  • The applicants' contracts of employment are to be transferred to the second respondent with effect from 4 February 2011.