Imvula Quality Protection and Others v University of South Africa (J435/17) [2017] ZALCJHB 310; [2017] 11 BLLR 1139 (LC); (2017) 38 ILJ 2763 (LC) (31 August 2017)

Imvula Quality Protection and Others v University of South Africa (J435/17) [2017] ZALCJHB 310; [2017] 11 BLLR 1139 (LC); (2017) 38 ILJ 2763 (LC) (31 August 2017)

The court held that section 197 of the Labour Relations Act was not triggered by UNISA's insourcing of security services. Although UNISA offered employment to the majority of the applicants' employees, it did not take over any business infrastructure, assets, or operational resources from the applicants. The shared services model involved UNISA employing staff but relying on a third-party provider for management and equipment. The court distinguished between the transfer of a service and the transfer of the business that supplies the service, finding that only the employment relationship changed, not the business itself. The applicants retained their business infrastructure and could...

Citation
[2017] ZALCJHB 310
Parties
Applicant: Imvula Quality Protection; Applicant: Persons listed in Annex A; Applicant: Red Alert TSS (Pty) Ltd; Applicant: Persons listed in Annex B; Respondent: University of South Africa
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
31 August 2017
Case Number
J435/17
Procedural Posture
Urgent Application / Judgment on Application for Declaration Under S 197 LRA
Outcome
Application dismissed with costs.
Judges
Van Niekerk
Legal Topics
Section 197 Transfer, Insourcing, Termination of Service Contract, Employee Transfer, Shared Services Model
Labour Law Civil Procedure Section 197 Transfer Insourcing Termination of Service Contract Employee Transfer Shared Services Model

Case Brief

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Parties

Imvula Quality Protection

Applicant

Persons listed in Annex A

Applicant

Red Alert TSS (Pty) Ltd

Applicant

Persons listed in Annex B

Applicant

University of South Africa

Respondent

Procedural Posture

Urgent Application / Judgment on Application for Declaration Under S 197 LRA

Legal Issues

  1. 1 Does the termination of the security services contracts and the insourcing of employees by UNISA constitute a transfer of a business as a going concern under section 197 of the Labour Relations Act?
  2. 2 Is the mere employment of the majority of outgoing contractors' employees sufficient to trigger section 197?
  3. 3 Was there a transfer of business infrastructure, assets, or operational resources from the applicants to UNISA?

Ratio Decidendi

The court held that section 197 of the Labour Relations Act was not triggered by UNISA's insourcing of security services. Although UNISA offered employment to the majority of the applicants' employees, it did not take over any business infrastructure, assets, or operational resources from the applicants. The shared services model involved UNISA employing staff but relying on a third-party provider for management and equipment. The court distinguished between the transfer of a service and the transfer of the business that supplies the service, finding that only the employment relationship changed, not the business itself. The applicants retained their business infrastructure and could...

Court Disposition

Application dismissed with costs.

Orders

  • The application is dismissed, with costs.