NEHAWU obo Cornelius and Others v High Rustenburg Estate (Pty) Ltd and Another (C459/2004) [2016] ZALCCT 5; (2016) 37 ILJ 1183 (LC) (10 February 2016)

NEHAWU obo Cornelius and Others v High Rustenburg Estate (Pty) Ltd and Another (C459/2004) [2016] ZALCCT 5; (2016) 37 ILJ 1183 (LC) (10 February 2016)

Section 197(5) of the Labour Relations Act 68 of 1995 applies to arbitration awards that are binding on the old employer immediately before the transfer of a business, even if such awards are subsequently reviewed and substituted by the Labour Court after the transfer. The risk of a review judgment affecting the rights and obligations of both employees and the new employer is inherent in the statutory scheme, and both parties must accept that a court order may intervene after transfer. This interpretation is consistent with the constitutional imperative to protect employment and facilitate commercial transactions, as well as the dual purpose of section 197. The opportunity for parties to...

Citation
[2016] ZALCCT 5
Parties
Applicant: NEHAWU obo Cornelius & 17 Others; Respondent: High Rustenburg Estate (Pty) Ltd; Respondent: High Rustenburg Hydro (Pty) Ltd
Court
Labour Court Cape Town
Jurisdiction
South Africa
Judgment Date
10 February 2016
Case Number
C459/2004
Procedural Posture
Special Case / Determination of Special Case Following Labour Appeal Court Order
Outcome
Section 197(5) of the Labour Relations Act applies to an arbitration award reversed and substituted by the Labour Court after the transfer of the undertaking.
Judges
Rabkin-Naicker
Legal Topics
Transfer of Business, Arbitration Award Enforceability, Section 197 Lra, Review of Arbitration Award
Labour Law Civil Procedure Transfer of Business Arbitration Award Enforceability Section 197 Lra Review of Arbitration Award

Case Brief

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Parties

NEHAWU obo Cornelius & 17 Others

Applicant

High Rustenburg Estate (Pty) Ltd

Respondent

High Rustenburg Hydro (Pty) Ltd

Respondent

Procedural Posture

Special Case / Determination of Special Case Following Labour Appeal Court Order

Legal Issues

  1. 1 Does section 197(5) of the Labour Relations Act 68 of 1995 apply to an arbitration award which was reversed by the Labour Court after the transfer of the relevant undertaking?
  2. 2 Are the rights and obligations arising from an arbitration award binding on the new employer if the award is subsequently reviewed and substituted after transfer?

Ratio Decidendi

Section 197(5) of the Labour Relations Act 68 of 1995 applies to arbitration awards that are binding on the old employer immediately before the transfer of a business, even if such awards are subsequently reviewed and substituted by the Labour Court after the transfer. The risk of a review judgment affecting the rights and obligations of both employees and the new employer is inherent in the statutory scheme, and both parties must accept that a court order may intervene after transfer. This interpretation is consistent with the constitutional imperative to protect employment and facilitate commercial transactions, as well as the dual purpose of section 197. The opportunity for parties to...

Court Disposition

Section 197(5) of the Labour Relations Act applies to an arbitration award reversed and substituted by the Labour Court after the transfer of the undertaking.

Orders

  • The rights which the Applicant’s members had, following their unfair dismissal by Second Respondent, were rights which were transferred to First Respondent by virtue of Section 197 of the Labour Relations Act.