South Africa Case Law

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

Africa Online Operations (Mauritius) Limited v Scanlon and Others (CA01/2023)

Africa Online Operations (Mauritius) Limited v Scanlon and Others (CA01/2023) [2024] ZALAC 2; (2024) 45 ILJ 790 (LAC); [2024] 4 BLLR 357 (LAC) (31 January 2024)

Court

Labour Appeal Court

Case number

CA01/2023

Judges

Waglay, Mlambo, Davis

The Labour Appeal Court held that the substance of the transactions following the liquidation of EIMS demonstrated that AOOML had assumed the key obligations previously undertaken by EIMS, including contracting with key personnel and retaining the SOLID platform to ensure uninterrupted shared services to the operating companies. The Court found that AOOML replaced EIMS as the relevant business entity and that the employment contracts of the respondents were transferred to AOOML in terms of section 197 of the LRA. The Court rejected the appellant's argument that no transfer occurred, emphasizi…

Source excerpt

• Transfer Of Business As Going Concern
• Section 197 Lra
• Employee Rights On Transfer
• Substance Over Form
• Liquidation And Employment
• Continuity Of Employment

Numsa obo Members and Others v AIH Logistics (Pty) Ltd and Another (D 1112/19)

Numsa obo Members and Others v AIH Logistics (Pty) Ltd and Another (D 1112/19) [2023] ZALCD 2; (2023) 44 ILJ 1099 (LC); [2023] 5 BLLR 459 (LC) (27 January 2023)

Court

Labour Court Durban

Case number

D 1112/19

Judge

B Whitcher

The Labour Court held that the transfer to AIH Logistics was not a section 197 transfer of a business as a going concern and ordered restoration of the prior employment position.

• Transfer Of Business
• Section 197 Lra
• Continuity Of Employment
• Sham Transfer
• Restoration Of Status Quo
• Section-197

City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others (JA55/2012)

City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others (JA55/2012) [2014] ZALAC 22; [2014] 10 BLLR 945 (LAC); (2014) 35 ILJ 2757 (LAC) (29 May 2014)

Court

Labour Appeal Court

Case number

JA55/2012

Judges

Tlaletsi, Davis, Ndlovu

The court found that the uncontested facts established that the assets and expertise required to operate the prepaid metering project were transferred from the first respondent to the appellant. The business of providing prepaid electrical services to Alexandra residents was handed over to the appellant, and the project continued under its control. The transfer included tangible and intangible assets and the necessary employees. Applying the principles set out by the Constitutional Court in Aviation Union, the court held that a transfer of business as a going concern had occurred, triggering…

Source excerpt

• Section 197 Transfer
• Outsourcing Agreements
• Second Generation Transfer
• Continuity Of Employment
• Municipal Service Provision

AST Holdings (Pty) Ltd v Roos (JA2/2005)

AST Holdings (Pty) Ltd v Roos (JA2/2005) [2007] ZALAC 4; [2007] 10 BLLR 891 (LAC); (2007) 28 ILJ 1988 (LAC) (4 May 2007)

Court

Labour Appeal Court

Case number

JA2/2005

Judges

McCALL, ZONDO, KRUGER

The Labour Appeal Court held that section 197(4) of the Labour Relations Act prohibits any agreement that interrupts an employee's continuity of employment when a business is transferred as a going concern. The respondent's years of service with Iscor must be included in the calculation of severance pay, as the transfer of his contract of employment to AST Holdings occurred within the context of section 197. The purported agreement to forfeit prior years of service was unlawful and contrary to the express provisions of section 197(4). The Basic Conditions of Employment Act 75 of 1997, in forc…

Source excerpt

• Transfer Of Business
• Continuity Of Employment
• Severance Pay
• Section 197 Lra
• Basic Conditions Of Employment Act

Brown v Cash Paymaster Services (Pty) Limited (JS1178/01)

Brown v Cash Paymaster Services (Pty) Limited (JS1178/01) [2003] ZALC 133 (21 January 2003)

Court

Labour Court

Case number

JS1178/01

Judge

Pammenter

The Labour Court held that Brown’s dismissal at 60 was automatically unfair because his agreed retirement age remained 65 after the business transfer.

• Automatic Unfair Dismissal
• Retirement Age
• Section 197 Transfer
• Compensation Quantum
• Contractual Variation
• Continuity Of Employment

National Education Health and Allied Workers Union v University of Cape Town and Others (CA12/00)

National Education Health and Allied Workers Union v University of Cape Town and Others (CA12/00) [2002] ZALAC 4; [2002] 4 BLLR 311 (LAC); (2002) 23 ILJ 306 (LAC) (7 February 2002)

Court

Labour Appeal Court

Case number

CA12/00

Judges

Zondo JP, Van Dijkhorst AJA, Comrie AJA

The Labour Appeal Court held that section 197 of the Labour Relations Act does not provide for the automatic transfer of employment contracts between employers in the absence of consensus. The section dispenses only with the requirement of employee consent, not employer consent. The concept of 'transfer as a going concern' requires agreement between the transferor and transferee on what is transferred, including the workforce. In the present case, the outsourcing of non-core services by the University of Cape Town did not constitute a transfer of part of its business as a going concern under…

Source excerpt

• Transfer Of Business
• Automatic Transfer Of Employment
• Outsourcing
• Section 197 Interpretation
• Employee Rights
• Continuity Of Employment

Foodgro, a division of Leisurenet Limited v Carol Keil (JA63/98)

Foodgro, a division of Leisurenet Limited v Carol Keil (JA63/98) [1999] ZALAC 10 (24 June 1999)

Court

Labour Appeal Court

Case number

JA63/98

Judges

Froneman, Nicholson

The court held that section 197(4) of the Labour Relations Act expressly forbids interruption of continuity of employment upon transfer of a business as a going concern. The letter of appointment signed by the employee in January 1997 did not replace her previous contract of employment nor affect her length of service, as continuity of employment is not a right or obligation that can be contracted out of. The retrenchment was found to be procedurally unfair due to Foodgro's failure to comply with section 189 requirements, including lack of proper consultation and provision of information. The…

Source excerpt

• Transfer Of Business
• Continuity Of Employment
• Unfair Dismissal
• Retrenchment Procedure
• Severance Pay