Ngema and Others v Screenex Wire Waring Manufactures (Pty) Ltd and Another (JA 1/2012) [2012] ZALAC 43; (2013) 34 ILJ 1470 (LAC) (12 December 2012)

Ngema and Others v Screenex Wire Waring Manufactures (Pty) Ltd and Another (JA 1/2012) [2012] ZALAC 43; (2013) 34 ILJ 1470 (LAC) (12 December 2012)

Section 197 of the Labour Relations Act ensures that employment contracts and associated rights and obligations transfer automatically from the old employer to the new employer when a business is sold as a going concern. However, this statutory assignment does not mean that the new employer is automatically substituted as a judgment debtor in litigation without being joined as a party. The principle of audi alteram partem requires that any party with a direct and substantial interest in the relief sought must be afforded an opportunity to be heard. In this case, the appellants failed to join the second respondent, the new employer, in proceedings where it had a direct interest in the...

Citation
[2012] ZALAC 43
Parties
Appellant: Jafta Ngema and 24 Others; Respondent: Screenex Wire Waring Manufactures (Pty) Ltd; Respondent: Screenex Manufacturing (Pty) Ltd t/a Johnson Screenex
Court
Labour Appeal Court
Jurisdiction
South Africa
Judgment Date
12 December 2012
Case Number
JA 1/2012
Procedural Posture
Civil Appeal / Appeal From Labour Court Judgment and Order on Substitution of Judgment Debtor
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Davis, Hlophe, Landman
Legal Topics
Transfer of Business as Going Concern, Automatic Substitution of Employer, Joinder of Parties, Unfair Dismissal, Reinstatement, Waiver of Right to Be Heard
Labour Law Civil Procedure Transfer of Business as Going Concern Automatic Substitution of Employer Joinder of Parties Unfair Dismissal Reinstatement Waiver of Right to Be Heard

Case Brief

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Parties

Jafta Ngema and 24 Others

Appellant

Screenex Wire Waring Manufactures (Pty) Ltd

Respondent

Screenex Manufacturing (Pty) Ltd t/a Johnson Screenex

Respondent

Procedural Posture

Civil Appeal / Appeal From Labour Court Judgment and Order on Substitution of Judgment Debtor

Legal Issues

  1. 1 Does section 197 of the Labour Relations Act automatically substitute the new employer as judgment debtor in relief obtained against the old employer?
  2. 2 Does section 197 override established principles of joinder in litigation?
  3. 3 Was the second respondent entitled to be heard on the question of relief?

Ratio Decidendi

Section 197 of the Labour Relations Act ensures that employment contracts and associated rights and obligations transfer automatically from the old employer to the new employer when a business is sold as a going concern. However, this statutory assignment does not mean that the new employer is automatically substituted as a judgment debtor in litigation without being joined as a party. The principle of audi alteram partem requires that any party with a direct and substantial interest in the relief sought must be afforded an opportunity to be heard. In this case, the appellants failed to join the second respondent, the new employer, in proceedings where it had a direct interest in the...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed.
  • The appellants are ordered to pay the costs of the appeal, including the costs of two counsel.