National Union of Leather Workers v Barnard NO and another (DA14/00) [2000] ZALAC 6; 2001 (4) SA 1261 (LAC); (2001) 22 ILJ 2290 (LAC); [2001] 9 BLLR 1002 (LAC) (24 April 2000)

National Union of Leather Workers v Barnard NO and another (DA14/00) [2000] ZALAC 6; 2001 (4) SA 1261 (LAC); (2001) 22 ILJ 2290 (LAC); [2001] 9 BLLR 1002 (LAC) (24 April 2000)

The court held that the passing of a special resolution by shareholders to voluntarily wind up the company constitutes an act by the employer that leads to the termination of employment contracts. This act, being the decision to wind up, is recognised by law and triggers the application of section 38 of the...

Source-derived case information.

Citation
[2000] ZALAC 6
Parties
Appellant: National Union of Leather Workers; Respondent: H Barnard N.O.; Respondent: G Perry N.O.
Court
Labour Appeal Court
Jurisdiction
South Africa
Judgment Date
24 April 2000
Case Number
DA14/00
Procedural Posture
Civil Appeal / Appeal From Labour Court Judgment
Outcome
Appeal upheld; the termination of employment contracts following voluntary winding up constitutes dismissal under section 186(a) of the Labour Relations Act.
Judges
Davis
Legal Topics
Dismissal Definition, Voluntary Winding Up, Termination by Operation of Law, Section 186 Lra, Section 38 Insolvency Act
Labour Law Civil Procedure Dismissal Definition Voluntary Winding Up Termination by Operation of Law Section 186 Lra Section 38 Insolvency Act

Source-derived case record

Summary, issues, holding and outcome

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Parties

National Union of Leather Workers

Appellant

H Barnard N.O.

Respondent

G Perry N.O.

Respondent

Procedural Posture

Civil Appeal / Appeal From Labour Court Judgment

Legal Issues

  1. 1 Whether the termination of employment contracts following voluntary winding up constitutes dismissal under section 186(a) of the Labour Relations Act.
  2. 2 Whether the passing of a special resolution for voluntary winding up is an act of the employer resulting in dismissal.
  3. 3 Whether section 38 of the Insolvency Act operates independently of employer action in terminating employment contracts.

Ratio Decidendi

The court held that the passing of a special resolution by shareholders to voluntarily wind up the company constitutes an act by the employer that leads to the termination of employment contracts. This act, being the decision to wind up, is recognised by law and triggers the application of section 38 of the Insolvency Act, which terminates employment by operation of law. The court distinguished between voluntary and compulsory winding up, noting that in voluntary winding up, the shareholders' decision is the operative act, whereas in compulsory winding up, the court's discretion is decisive. Therefore, the termination of employment contracts following a voluntary winding up is a dismissal...

Court Disposition

Appeal upheld; the termination of employment contracts following voluntary winding up constitutes dismissal under section 186(a) of the Labour Relations Act.

Orders

  • The finding of the court a quo is set aside.
  • It is declared that the termination of employment contracts following the voluntary winding up of Vittmar Industries (Pty) Ltd constitutes dismissal as contemplated by section 186(a) of the Labour Relations Act.