NUMSA obo Members v Sacks Packaging (Pty) Ltd and Others (D396/20) [2020] ZALCD 14; (2021) 42 ILJ 165 (LC); [2021] 2 BLLR 212 (LC) (8 September 2020)

NUMSA obo Members v Sacks Packaging (Pty) Ltd and Others (D396/20) [2020] ZALCD 14; (2021) 42 ILJ 165 (LC); [2021] 2 BLLR 212 (LC) (8 September 2020)

The court found that the transfer of contracts of employment from the First Respondent to the Second Respondent did not constitute a transfer of business as a going concern under section 197 of the LRA. Although the First Respondent conceptually and operationally distinguished between core and non-core functions, the evidence showed that employees performed both types of functions interchangeably. The First Respondent's reliance on 'predominance' of non-core functions was insufficient to establish a discrete and stable set of employees dedicated solely to the transferred functions. The lack of clear separation of human capital prior to the transfer undermined the claim that a going...

Citation
[2020] ZALCD 14
Parties
Applicant: NUMSA obo Members; Respondent: Sacks Packaging (Pty) Ltd; Respondent: Safety Workplace Business Solutions (Pty) Limited; Respondent: Adcorp Workforce Solutions
Court
Labour Court Durban
Jurisdiction
South Africa
Judgment Date
8 September 2020
Case Number
D396/20
Procedural Posture
Urgent Application / Judgment Delivered After Urgent Application for Declaratory and Interdictory Relief.
Outcome
Application granted. The transfer or purported transfer of the contracts of employment of the Applicant's members by the First Respondent to the Second Respondent is declared invalid and unlawful. Costs awarded to the Applicant.
Judges
Whitcher
Legal Topics
Section 197 Transfer, Going Concern Definition, Outsourcing, Interdictory Relief, Employment Contracts, Service Level Agreement
Labour Law Section 197 Transfer Going Concern Definition Outsourcing Interdictory Relief Employment Contracts Service Level Agreement

Case Brief

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Parties

NUMSA obo Members

Applicant

Sacks Packaging (Pty) Ltd

Respondent

Safety Workplace Business Solutions (Pty) Limited

Respondent

Adcorp Workforce Solutions

Respondent

Procedural Posture

Urgent Application / Judgment Delivered After Urgent Application for Declaratory and Interdictory Relief.

Legal Issues

  1. 1 Whether the transfer of contracts of employment from the First Respondent to the Second Respondent constituted a transfer of business as a going concern under section 197 of the LRA.
  2. 2 Whether the purported transfer was valid and lawful.
  3. 3 Whether the Applicant was entitled to urgent interdictory relief.

Ratio Decidendi

The court found that the transfer of contracts of employment from the First Respondent to the Second Respondent did not constitute a transfer of business as a going concern under section 197 of the LRA. Although the First Respondent conceptually and operationally distinguished between core and non-core functions, the evidence showed that employees performed both types of functions interchangeably. The First Respondent's reliance on 'predominance' of non-core functions was insufficient to establish a discrete and stable set of employees dedicated solely to the transferred functions. The lack of clear separation of human capital prior to the transfer undermined the claim that a going...

Court Disposition

Application granted. The transfer or purported transfer of the contracts of employment of the Applicant's members by the First Respondent to the Second Respondent is declared invalid and unlawful. Costs awarded to the Applicant.

Orders

  • The transfer or purported transfer of the contracts of employment of the Applicant's members by the First Respondent to the Second Respondent is invalid and unlawful.
  • The First Respondent is directed to pay the Applicant's costs of suit.