South Africa Case Law

Water and Sanitation Services South Africa (Pty) Ltd v King Cetshwayo District Municipality and Others

Water and Sanitation Services South Africa (Pty) Ltd v King Cetshwayo District Municipality and Others [2020] ZALCJHB 269; J 630/20 (3 September 2020)

Court

Labour Court Johannesburg

Case number

J 630/20

Judge

Van Niekerk

The Court found that the termination of the SLA resulted in the municipality assuming the essential assets, infrastructure, and activities previously conducted by the applicant. The municipality continued to provide water services seamlessly, using the same infrastructure and operational methods. The factual enquiry established that the business operated by the applicant was transferred to the municipality as a going concern, triggering section 197 of the LRA. The contracts of employment of the listed employees were automatically transferred to the municipality, and all rights and obligations…

Source excerpt

• Section 197 Transfer
• Outsourcing And Insourcing
• Automatic Transfer Of Employment
• Municipal Services Contract
• Termination Of Service Level Agreement

Road Traffic Management Corporation v Tasima (Pty) Limited and Others; Road Traffic Management Corporation and Another v Tasima (Pty) Limited (JA77/2017; JA78/2017; JA28/2018; JA134/2017)

Road Traffic Management Corporation v Tasima (Pty) Limited and Others; Road Traffic Management Corporation and Another v Tasima (Pty) Limited (JA77/2017; JA78/2017; JA28/2018; JA134/2017) [2018] ZALAC 47; [2019] 5 BLLR 434 (LAC); (2019) 40 ILJ 1036 (LAC) (21 December 2018)

Court

Labour Appeal Court

Case number

JA77/2017; JA78/2017; JA28/2018; JA134/2017

Judges

Waglay JP, Davis JA, Murphy AJA

The Labour Appeal Court held that the transfer of the eNaTIS system from Tasima to the Road Traffic Management Corporation constituted the transfer of a business as a going concern under section 197 of the Labour Relations Act. The fact that the transferee was a statutory authority did not exclude the operation of section 197. The legal cause for the transfer was the Constitutional Court's order, and the employees engaged in the eNaTIS system were automatically transferred to the appellant. However, the Labour Court erred in granting interim execution orders for payment of salaries pending ap…

Source excerpt

• Automatic Transfer Of Employment
• Section 197 Transfer
• Interim Execution Orders
• Enforcement Of Judgments
• Contractual Interpretation

EOH Mthombo (Pty) Ltd v Naude and Others (JR1676/16)

EOH Mthombo (Pty) Ltd v Naude and Others (JR1676/16) [2018] ZALCJHB 125 (20 March 2018)

Court

Labour Court Johannesburg

Case number

JR1676/16

Judge

LJ Lekale

The Labour Court reviewed and set aside an arbitration award, holding that after cancellation of the sale, the employee reverted to the seller as employer.

• Transfer Of Business
• Automatic Transfer Of Employment
• Section 197 Lra
• Review Of Arbitration Award
• Unfair Dismissal
• Section-197-lra

Ellies Electronics (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others, Ellies (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR484/15)

Ellies Electronics (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others, Ellies (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR484/15) [2018] ZALCJHB 96; (2018) 39 ILJ 1748 (LC) (9 March 2018)

Court

Labour Court Johannesburg

Case number

JR484/15

Judge

Lekale

The court held that reinstatement of withdrawn proceedings is not recognised in South African law or practice rules. Withdrawal is equivalent to an order of absolution from the instance, which allows for reinstitution, not reinstatement. Reinstatement is only available for matters removed from or struck off the roll, where the matter remains pending before the court. Since the review application was withdrawn and the present application for reinstatement was brought more than seven months later, reinstatement is not available as a relief. The applicant's only option is to reinstitute review p…

Source excerpt

• Withdrawal Of Proceedings
• Reinstatement Of Review
• Joinder
• Automatic Transfer Of Employment
• Condonation

Tasima (Pty) Ltd v Road Traffic Management Corporation and Others (J890/17)

Tasima (Pty) Ltd v Road Traffic Management Corporation and Others (J890/17) [2017] ZALCJHB 198; (2017) 38 ILJ 2385 (LC) (25 May 2017)

Court

Labour Court Johannesburg

Case number

J 890/17

Judge

A J Steenkamp

The Court held that the handover of the eNaTIS system and services from Tasima to the RTMC, pursuant to the Constitutional Court’s order, constituted a transfer of a business as a going concern under section 197 of the Labour Relations Act. The Court rejected RTMC’s argument that section 197 does not apply to public entities or non-profit undertakings, finding that the statutory definition of ‘business’ is broad and includes services rendered by public bodies. The Court found that the RTMC had taken over the entirety of Tasima’s business, including its premises, assets, and ongoing operations…

Source excerpt

• Automatic Transfer Of Employment
• Section 197 Lra
• Business As Going Concern
• Public Sector Transfer
• Estoppel
• Confidentiality Of Employee Data

Field Force Marketing v Distell Limited and Others (J1089/2015)

Field Force Marketing v Distell Limited and Others (J1089/2015) [2015] ZALCJHB 256 (17 July 2015)

Court

Labour Court Johannesburg

Case number

J1089/2015

Judge

Ralehoko AJ

The court found that the termination of the service agreement between FFM and Distell and the subsequent award of the contract to Imperial did not constitute a transfer of a business as a going concern under section 197 of the LRA. The facts established that nothing was transferred from FFM to Imperial—no assets, employees, or infrastructure. Imperial commenced rendering services parallel to FFM with its own business, workforce, and resources, and did not require anything from FFM. FFM retained its business and could offer its services to other customers. The mere change in service provider,…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Automatic Transfer Of Employment
• Service Agreement Termination
• Urgency
• Contractual Rights

Communication Workers Union ("CWU") and Others v Mobile Telephone Networks (Pty) Ltd ("MTN") and Another (DA10/13)

Communication Workers Union ("CWU") and Others v Mobile Telephone Networks (Pty) Ltd ("MTN") and Another (DA10/13) [2015] ZALAC 8; (2015) 36 ILJ 1819 (LAC) (21 April 2015)

Court

Labour Appeal Court

Case number

DA10/13

Judges

Waglay, Davis, Ndlovu

The Labour Appeal Court held that MTN’s resumption of call centre operations after ending its service agreement with Interaction amounted to a transfer under s197 LRA.

• Automatic Transfer Of Employment
• Business As Going Concern
• Section 197 Lra
• Unfair Dismissal
• Contractual Obligations
• Employee Rights

Communications Workers Union v MTN (DA10/13)

Communications Workers Union v MTN (DA10/13) [2015] ZALAC 65 (21 April 2015)

Court

Labour Appeal Court

Case number

DA10/13

Judges

Waglay, Davis, Ndlovu

The Labour Appeal Court held that MTN’s resumption of call-centre operations after ending its service agreement with Interaction amounted to a transfer under section 197 of the LRA.

• Transfer Of Business As Going Concern
• Automatic Transfer Of Employment
• Section 197 Lra
• Unfair Dismissal
• Contractual Obligations
• Employment Status

PE Pack 4100 CC v Sanders and Others (PA 08/10)

PE Pack 4100 CC v Sanders and Others (PA 08/10) [2013] ZALAC 1; [2013] 4 BLLR 348 (LAC); (2013) 34 ILJ 1477 (LAC) (22 January 2013)

Court

Labour Appeal Court

Case number

PA 08/10

Judges

Davis JA, Hlophe AJA, Landman AJA

The majority held that section 197 of the Labour Relations Act does not apply to the termination and replacement of franchise agreements. The appellant did not acquire the business as a going concern from the previous franchisees; rather, the franchisor terminated the old franchise agreements and entered into new ones with the appellant. The franchisor retained ownership of the core assets and infrastructure, and there was no transfer of business components from the old franchisees to the new franchisee. The franchise relationship is fundamentally different from outsourcing arrangements, as t…

Source excerpt

• Transfer Of Business
• Section 197 Lra
• Franchise Agreements
• Automatic Transfer Of Employment
• Outsourcing Jurisprudence

Sanders v Cell C Provider Company (Pty) Ltd and Others (P 260/10)

Sanders v Cell C Provider Company (Pty) Ltd and Others (P 260/10) [2010] ZALC 76; [2010] 9 BLLR 973 (LC) ; (2010) 31 ILJ 2722 (LC) (10 May 2010)

Court

Labour Court

Case number

P 260/10

Judge

A M de Swardt

The court held that, despite the absence of a formal transfer of assets or goodwill, the substance of the transaction indicated a transfer of businesses as going concerns from the third and fourth respondents to the second respondent. The business operations, location, and nature of services remained unchanged, and the only difference was the change in ownership. A literal interpretation of section 197 would undermine its protective purpose and allow employers to evade the automatic transfer of employment contracts. The court adopted a purposive approach, finding that section 197 applied to t…

Source excerpt

• Section 197 Transfer
• Franchise Termination
• Automatic Transfer Of Employment
• Outsourcing
• Fair Labour Practices