South Africa Case Law

King Cetshwayo District Municipality v Water and Sanitation Services South Africa (Pty) Ltd and Others (JA9/21)

King Cetshwayo District Municipality v Water and Sanitation Services South Africa (Pty) Ltd and Others (JA9/21) [2025] ZALAC 3; [2025] 5 BLLR 460 (LAC); (2025) 46 ILJ 1111 (LAC) (10 January 2025)

Court

Labour Appeal Court

Case number

JA9/21

Judges

Mlambo JA, Nkutha-Nkontwana JA, Jolwana AJA

The court held that the termination of the service level agreement and the return of core municipal assets to the appellant constituted a transfer of a business as a going concern under section 197 of the Labour Relations Act. The nature of the business was asset-reliant, and the core assets necessary for the provision of bulk water services were returned to the municipality. The lack of transfer of certain assets owned by the first respondent and the non-transfer of employees did not preclude the application of section 197, as the business continued in substance under the appellant. The cour…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Business As Going Concern
• Municipal Tender
• Employee Transfer
• Contractual Interpretation

Murray and Roberts Cementation (Pty) Ltd v Electro Hydro World (Pty) Ltd and Others (2024-091607)

Murray and Roberts Cementation (Pty) Ltd v Electro Hydro World (Pty) Ltd and Others (2024-091607) [2024] ZALCJHB 535 (30 September 2024)

Court

Labour Court Johannesburg

Case number

2024-091607

Judge

M T M Phehane

The Court found that the termination of the applicant's contract and the appointment of the first respondent to provide grout pack pumping services at the K4 grout plant constituted a transfer of business as a going concern under section 197 of the Labour Relations Act. The factual enquiry revealed that the economic entity, including the use of premises, infrastructure, and the nature of the business, retained its identity post-transfer. The tender document's clause 20 was not a mere template but required provision for section 197 compliance. The respondent's reliance on technological differe…

Source excerpt

• Section 197 Transfer
• Business As Going Concern
• Contract Termination
• Employee Transfer
• Tender Process
• Continuity Of Employment

AFMS Group v South African Airways (SOC) Ltd and Others (J 998 / 2022)

AFMS Group v South African Airways (SOC) Ltd and Others (J 998 / 2022) [2022] ZALCJHB 256 (7 September 2022)

Court

Labour Court Johannesburg

Case number

J 998 / 2022

Judge

S Snyman

The court found that the termination of the HVAC and EM service agreements between AFMS and SAA constitutes a transfer of a business as a going concern under section 197 of the Labour Relations Act. The historical context demonstrated that the same services and employees had been transferred between service providers over two decades, always subject to section 197. The contractual provisions, especially clause 20.3, explicitly contemplated the application of section 197 upon termination. The employees dedicated to the service agreements were considered assets of the business and were required…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Declaratory Relief
• Business As Going Concern
• Employee Transfer
• Service Agreement Termination

Associated Computer Solutions (PTY) Ltd and Others v Man Truck and Bus (SA) (PTY) Ltd and Another (1 August 2022) (J 808/22)

Associated Computer Solutions (PTY) Ltd and Others v Man Truck and Bus (SA) (PTY) Ltd and Another (1 August 2022) (J 808/22) [2022] ZALCJHB 203 (1 August 2022)

Court

Labour Court Johannesburg

Case number

J 808/22

Judge

Prinsloo

The court found that the termination of the agreement between ACS and MAN did not constitute a transfer of business as a going concern under section 197 of the Labour Relations Act. The Embrace ERP Service Desk, after outsourcing, became part of ACS's broader service desk, servicing multiple clients and lacking a discrete economic identity. Upon termination, no assets, technology, or employees would transfer to MAN, and the affected employees would not be able to render the same services on MAN's new SAP system. The retention of 30 Embrace licences by MAN was solely for accessing historical d…

Source excerpt

• Section 197 Transfer
• Outsourcing And Insourcing
• Employment Continuity
• Contract Termination
• Business As Going Concern

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

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

Barloworld Transportation (Pty) Ltd v Unitrans Supply Chain Solutions (Pty) Ltd and Others (J2967/16)

Barloworld Transportation (Pty) Ltd v Unitrans Supply Chain Solutions (Pty) Ltd and Others (J2967/16) [2017] ZALCJHB 28 (26 January 2017)

Court

Labour Court Johannesburg

Case number

J2967/16

Judge

Gush

The court found that the facts did not support the conclusion that a business or part thereof was being transferred as a going concern. No assets, vehicles, or employees were required to be transferred for the respondents to render the delivery service. The transaction involved only the responsibility for providing deliveries in accordance with instructions from TMS, and there was no evidence of a transfer of a distinct business. The discussions regarding employment of staff and acquisition of furniture were not determinative. Accordingly, the transaction did not fall within the ambit of sect…

Source excerpt

• Section 197 Transfer
• Business As Going Concern
• Outsourcing
• Employee Transfer
• Contract Tender
• Costs Order

Enviroserv Waste Management v Interwaste (Pty) t/a Interwaste Environmental Solutions and Others (P408/15)

Enviroserv Waste Management v Interwaste (Pty) t/a Interwaste Environmental Solutions and Others (P408/15) [2015] ZALCPE 66; (2016) 37 ILJ 959 (LC) (18 December 2015)

Court

Labour Court Port Elizabeth

Case number

P408/15

Judge

Lallie

The Labour Court held that ending a waste management service agreement did not amount to a transfer of business as a going concern under section 197 of the LRA.

• Section 197 Transfer
• Fixed Term Contracts
• Outsourcing
• Business As Going Concern
• Employee Expectation
• Costs Order

Maluti-A-Phofung Local Municipality v Rural Maintenance (Pty) Ltd and Another (JA79/2014)

Maluti-A-Phofung Local Municipality v Rural Maintenance (Pty) Ltd and Another (JA79/2014) [2015] ZALAC 41; (2016) 37 ILJ 128 (LAC); [2016] 1 BLLR 13 (LAC) (21 October 2015)

Court

Labour Appeal Court

Case number

JA79/2014

Judges

Davis JA, Coppin JA, Savage AJA

The Labour Appeal Court held that the municipality did not receive a business as a going concern under section 197 of the LRA, and dismissed the transfer claim.

• Section 197 Transfer
• Outsourcing
• Ultra Vires Contract
• Administrative Law Principle
• Business As Going Concern
• Section-197-lra

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