Unitrans Supply Chain Solutions (Pty) and Another v Nampak Glass (Pty) Ltd and Others (J195/14) [2014] ZALCJHB 61; (2014) 35 ILJ 2888 (LC) (24 February 2014)

Unitrans Supply Chain Solutions (Pty) and Another v Nampak Glass (Pty) Ltd and Others (J195/14) [2014] ZALCJHB 61; (2014) 35 ILJ 2888 (LC) (24 February 2014)

The court held that the termination of the warehousing agreement between Unitrans and Nampak and the appointment of TMS to provide similar services constituted a transfer of a business as a going concern under section 197 of the Labour Relations Act. The court found that the affected employees, although formally employed by the second applicant, were engaged solely to provide services under the warehousing agreement and worked under the control of the first applicant. The continuity of services, use of Nampak's infrastructure and assets, and the assumption of the right to use those assets by TMS, established that the business had transferred as a going concern. The court emphasized that...

Citation
[2014] ZALCJHB 61
Parties
Applicant: Unitrans Supply Chain Solutions (Pty) Ltd; Applicant: Unitrans Household Goods Logistics (Pty) Ltd; Respondent: Nampak Glass (Pty) Ltd; Respondent: TMS Group Industrial Services (Pty) Ltd t/a Vericon; Respondent: The employees listed in Annexure A to the Notice of Motion
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
24 February 2014
Case Number
J195/14
Procedural Posture
Urgent Application / Judgment After Opposed Application
Outcome
Application granted. The court declared that the termination of the warehousing agreement and appointment of a new service provider constituted a transfer under section 197, and ordered the automatic transfer of employment contracts to the new service provider.
Judges
Van Niekerk
Legal Topics
Section 197 Transfer, Outsourcing, Going Concern, Employment Continuity, Group Structures, Service Provider Change
Labour Law Civil Procedure Section 197 Transfer Outsourcing Going Concern Employment Continuity Group Structures Service Provider Change

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 11 Party arguments 2
Sign in to unlock

Parties

Unitrans Supply Chain Solutions (Pty) Ltd

Applicant

Unitrans Household Goods Logistics (Pty) Ltd

Applicant

Nampak Glass (Pty) Ltd

Respondent

TMS Group Industrial Services (Pty) Ltd t/a Vericon

Respondent

The employees listed in Annexure A to the Notice of Motion

Respondent

Procedural Posture

Urgent Application / Judgment After Opposed Application

Legal Issues

  1. 1 Whether the termination of the warehousing agreement and appointment of a new service provider constitutes a transfer in terms of section 197 of the Labour Relations Act.
  2. 2 Whether the first applicant qualifies as the 'old employer' for the purposes of section 197, given the group structure and employment arrangements.
  3. 3 Whether the transfer occurred as a going concern, triggering automatic transfer of employment contracts.

Ratio Decidendi

The court held that the termination of the warehousing agreement between Unitrans and Nampak and the appointment of TMS to provide similar services constituted a transfer of a business as a going concern under section 197 of the Labour Relations Act. The court found that the affected employees, although formally employed by the second applicant, were engaged solely to provide services under the warehousing agreement and worked under the control of the first applicant. The continuity of services, use of Nampak's infrastructure and assets, and the assumption of the right to use those assets by TMS, established that the business had transferred as a going concern. The court emphasized that...

Court Disposition

Application granted. The court declared that the termination of the warehousing agreement and appointment of a new service provider constituted a transfer under section 197, and ordered the automatic transfer of employment contracts to the new service provider.

Orders

  • The termination of the warehousing agreement between the first applicant and second respondent and the conclusion of an agreement for the provision of similar services by the second respondent constitutes a transfer in terms of section 197 of the Labour Relations Act, 66 of 1995.
  • The contracts of the third to further respondents transfer automatically from the second applicant to the second respondent on the date of the transfer.