South Africa Case Law

Sodexo Southern Africa (Pty) Ltd v Servest (Pty) Ltd and Others (J1598/16)

Sodexo Southern Africa (Pty) Ltd v Servest (Pty) Ltd and Others (J1598/16) [2018] ZALCJHB 177 (11 May 2018)

Court

Labour Court Johannesburg

Case number

J1598/16

Judge

Barnes

The court found that the termination of the applicant's contract and the appointment of the first and second respondents to operate the staff restaurants at Multichoice sites constituted a transfer of a business as a going concern under section 197 of the LRA. The right of use and assumption of control over the infrastructure necessary to provide the catering service triggered the application of section 197, resulting in the automatic transfer of employment contracts of those employees employed by the applicant at the time of transfer to the new service providers. The court held that only tho…

Source excerpt

• Section 197 Transfer
• Outsourcing Arrangements
• Automatic Substitution Of Employer
• Business As Going Concern
• Employment Contract Transfer

Sodexo Southern Africa (Pty) Ltd v Olives and Plates Foods 2 (Pty) Ltd and Others (J389/16)

Sodexo Southern Africa (Pty) Ltd v Olives and Plates Foods 2 (Pty) Ltd and Others (J389/16) [2016] ZALCJHB 136 (29 March 2016)

Court

Labour Court Johannesburg

Case number

J389/16

Judge

Prinsloo

The court found that the catering services provided at the Multichoice restaurants and coffee shops constituted an economic entity and a business for the purposes of section 197(1)(a) of the Labour Relations Act. The right to use the infrastructural assets and premises necessary for the catering operation transferred from the Applicant to Olives and Plates Foods 2 (Pty) Ltd, who would continue providing the same services from the same premises. This amounted to a transfer of business as a going concern. Consequently, by operation of law, the employment contracts of the affected employees tran…

Source excerpt

• Section 197 Transfer
• Transfer Of Business
• Automatic Substitution Of Employer
• Employment Contracts
• Urgent Application
• Costs Order

Ngema and Others v Screenex Wire Waring Manufactures (Pty) Ltd and Another (JA 1/2012)

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)

Court

Labour Appeal Court

Case number

JA 1/2012

Judges

Davis, Hlophe, Landman

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…

Source excerpt

• Transfer Of Business As Going Concern
• Automatic Substitution Of Employer
• Joinder Of Parties
• Unfair Dismissal
• Reinstatement
• Waiver Of Right To Be Heard

Hydro Colour Inks (Pty) Ltd v Chemical, Energy, Paper, Printing, Woods And Allied Workers Union (JA48/07, JA77/09)

Hydro Colour Inks (Pty) Ltd v Chemical, Energy, Paper, Printing, Woods And Allied Workers Union (JA48/07, JA77/09) [2011] ZALAC 14; [2011] 7 BLLR 637 (LAC); (2011) 32 ILJ 1625 (LAC) (18 April 2011)

Court

Labour Appeal Court

Case number

JA48/07, JA77/09

Judges

Tlaletsi, Zondi, Molemela

The court found that the facts demonstrated a transfer of business as a going concern from Keep Inks to Hydro Colour Inks (Pty) Ltd. The appellant operated from the same premises, used the same equipment, employed the same workforce, and continued the same business activities as Keep Inks. The overlap in customers, suppliers, and management further supported this conclusion. Section 197A of the Labour Relations Act applies in cases of insolvency, and the new employer is automatically substituted in the place of the old employer for contracts of employment existing immediately before winding u…

Source excerpt

• Transfer Of Business As Going Concern
• Section 197a
• Insolvency And Employment
• Automatic Substitution Of Employer
• Reinstatement Orders
• Contract Of Employment

SAMWU and Another v SA Local Government Association and Others (C411/2007)

SAMWU and Another v SA Local Government Association and Others (C411/2007) [2010] ZALCCT 37 (3 March 2010)

Court

Labour Court Cape Town

Case number

C411/2007

Judge

Van Niekerk

The transfer of primary health care services from municipalities to the Department constituted a transfer of a business as a going concern under section 197 of the LRA. The default position under section 197(2) is automatic substitution of the employer unless a valid agreement under section 197(6) is concluded with the appropriate bargaining representative, which in this case was the unions. The Department's direct agreements with individual employees did not comply with section 197(6) and were therefore invalid. However, given the lapse of time, the practical completion of the transfer, and…

Source excerpt

• Transfer Of Business
• Automatic Substitution Of Employer
• Collective Bargaining
• Section 197 Lra
• Declaratory Relief

Ponties Panel Beaters Partnership v National Union of Metal Workers of South Africa (JA 43/06)

Ponties Panel Beaters Partnership v National Union of Metal Workers of South Africa (JA 43/06) [2008] ZALAC 12; [2009] 2 BLLR 99 (LAC) (2 September 2008)

Court

Labour Appeal Court

Case number

JA 43/06

Judges

Tlaletsi, Zondo, Jappie

The court found that, based on the objective facts, the business of Triponza Trading 455 CC was transferred to Ponties Panel Beaters Partnership as a going concern. The appellant continued the same business from the same premises, employing the same staff, using the same assets, and serving the same clientele. The purchase of assets from a third party did not break the continuity of the business. The court rejected the appellant's argument that only assets were purchased, holding that the substance of the transaction amounted to a transfer of the business as a going concern under section 197…

Source excerpt

• Transfer Of Business As Going Concern
• Section 197 Lra
• Automatic Substitution Of Employer
• Waiver Of Rights
• Settlement Agreement
• Enforcement Of Labour Court Judgment

Chemical, Energy, Paper, Printing, Wood and Allied Workers Union v Hydro Colour Inks (Pty) Ltd (JS546/2005)

Chemical, Energy, Paper, Printing, Wood and Allied Workers Union v Hydro Colour Inks (Pty) Ltd (JS546/2005) [2007] ZALC 119; [2011] 7 BLLR 655 (LC) (8 November 2007)

Court

Labour Court

Case number

JS546/2005

Judge

Francis

The Labour Court found that Keep Inks’ business had transferred as a going concern to Hydro Colour Inks, triggering section 197A substitution and liability.

• Transfer Of Business As Going Concern
• Section 197 Lra
• Section 197a Lra
• Automatic Substitution Of Employer
• Reinstatement Orders
• Insolvency And Employment