SACWU v Engen Petroleum Ltd and Another (C240/97) [1998] ZALC 45 (1 July 1998)

SACWU v Engen Petroleum Ltd and Another (C240/97) [1998] ZALC 45 (1 July 1998)

The court found that redundancy benefits were not part of the individual contracts of employment of the affected employees, as there was no evidence of contractual entitlement or documentation to that effect. The historical payment of redundancy benefits by the old employer did not create a contractual right that could transfer to the new employer under section 197(2) of the Labour Relations Act. The union failed to establish that its members had a contractual right to redundancy benefits at the time of the transfer. Consequently, the declaratory relief sought could not be granted. The court also held that law and fairness required that costs follow the result, given the manner in which...

Citation
[1998] ZALC 45
Parties
Applicant: SACWU; Respondent: Engen Petroleum Ltd; Respondent: Colas International (Pty) Ltd
Court
Labour Court
Jurisdiction
South Africa
Judgment Date
1 July 1998
Case Number
C240/97
Procedural Posture
Declaratory Application / Judgment
Outcome
Application dismissed. Costs awarded against the applicant union.
Judges
A A Landman
Legal Topics
Transfer of Business, Redundancy Benefits, Severance Pay, Contractual Rights, Section 197 Transfer
Labour Law Transfer of Business Redundancy Benefits Severance Pay Contractual Rights Section 197 Transfer

Case Brief

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Parties

SACWU

Applicant

Engen Petroleum Ltd

Respondent

Colas International (Pty) Ltd

Respondent

Procedural Posture

Declaratory Application / Judgment

Legal Issues

  1. 1 Does the Labour Court have jurisdiction to grant a declaratory order regarding redundancy benefits following a transfer of business under section 197 of the Labour Relations Act?
  2. 2 Did redundancy benefits form part of the individual contracts of employment and thus transfer to the new employer under section 197(2)?
  3. 3 Are the affected employees entitled to the same redundancy benefits with the new employer as they had with the old employer?

Ratio Decidendi

The court found that redundancy benefits were not part of the individual contracts of employment of the affected employees, as there was no evidence of contractual entitlement or documentation to that effect. The historical payment of redundancy benefits by the old employer did not create a contractual right that could transfer to the new employer under section 197(2) of the Labour Relations Act. The union failed to establish that its members had a contractual right to redundancy benefits at the time of the transfer. Consequently, the declaratory relief sought could not be granted. The court also held that law and fairness required that costs follow the result, given the manner in which...

Court Disposition

Application dismissed. Costs awarded against the applicant union.

Orders

  • The application is dismissed.
  • The applicant union is ordered to pay the respondents' costs.