South Africa Case Law

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

Dimension Data (PTY) Ltd and Others v GWB Technologies CC and Others (J 478/2022)

Dimension Data (PTY) Ltd and Others v GWB Technologies CC and Others (J 478/2022) [2022] ZALCJHB 97; (2022) 43 ILJ 1824 (LC) (9 May 2022)

Court

Labour Court Johannesburg

Case number

J 478/2022

Judge

Van Niekerk

The Court found that the provision of end-user computing services to the City constituted a discrete, organised economic entity capable of being transferred. The termination of the applicants’ service agreement and the simultaneous appointment of GWB to provide the same services, using the same infrastructure, assets, and institutional knowledge, triggered section 197 of the Labour Relations Act. The Court distinguished the present facts from cases where only maintenance services were provided, noting that the EUC services involved a dedicated team, continuity of service, and the transfer of…

Source excerpt

• Section 197 Transfer
• Change Of Service Provider
• Employment Continuity
• Outsourcing
• Declaratory Relief

Logwood Village NPC v Lecso Manufacturing Proprietary Limited and Others (J1586/19)

Logwood Village NPC v Lecso Manufacturing Proprietary Limited and Others (J1586/19) [2019] ZALCJHB 261 (3 October 2019)

Court

Labour Court Johannesburg

Case number

J 1586/19

Judge

Tlhotlhalemaje

The Labour Court held that Lecso’s termination of an assembly agreement and insourcing of work did not trigger section 197 of the LRA.

• Section 197 Transfer
• Outsourcing And Insourcing
• Contract Termination
• Employment Continuity
• Section-197-transfer
• Outsourcing-and-insourcing

Imvula Quality Protection (Pty) Ltd and Others v University of South Africa (JA122/2017)

Imvula Quality Protection (Pty) Ltd and Others v University of South Africa (JA122/2017) [2018] ZALAC 33; [2018] 12 BLLR 1151 (LAC); (2019) 40 ILJ 104 (LAC) (25 September 2018)

Court

Labour Appeal Court

Case number

JA122/2017

Judges

Phatshoane, Davis, Murphy

The court held that the university's insourcing of security personnel did not constitute a transfer of a business as a going concern under section 197 of the LRA. The university did not take over the management, equipment, or operational infrastructure of the appellants' businesses, but only employed certain security guards. The shared services agreement ensured that external service providers continued to supply management, supervision, and equipment. The essential elements of the business, beyond mere human resources, were not transferred, and the university did not operate the business sea…

Source excerpt

• Transfer Of Business
• Section 197 Lra
• Insourcing
• Shared Services Model
• Employment Continuity

Unitrans Supply Chain Solutions (Pty) and Another v Nampak Glass (Pty) Ltd and Others (J195/14)

Unitrans Supply Chain Solutions (Pty) and Another v Nampak Glass (Pty) Ltd and Others (J195/14) [2014] ZALCJHB 61; (2014) 35 ILJ 2888 (LC) (24 February 2014)

Court

Labour Court Johannesburg

Case number

J195/14

Judge

Van Niekerk

The court held that the termination of the warehousing agreement between Unitrans and Nampak and the appointment of TMS to provide similar services constituted a transfer of a business as a going concern under section 197 of the Labour Relations Act. The court found that the affected employees, although formally employed by the second applicant, were engaged solely to provide services under the warehousing agreement and worked under the control of the first applicant. The continuity of services, use of Nampak's infrastructure and assets, and the assumption of the right to use those assets by…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Going Concern
• Employment Continuity
• Group Structures
• Service Provider Change

Franmann Services (Pty) Ltd v Simba (Pty) Ltd and Another (J 1978/12)

Franmann Services (Pty) Ltd v Simba (Pty) Ltd and Another (J 1978/12) [2012] ZALCJHB 86; [2012] 12 BLLR 1293 (LC); (2013) 34 ILJ 897 (LC) (30 August 2012)

Court

Labour Court Johannesburg

Case number

J 1978/12

Judge

Van Niekerk

The court held that section 197 of the Labour Relations Act is not triggered solely by the termination of a contract between a client and a service provider and the subsequent appointment of a new service provider to perform similar activities. The applicant's business, as a labour broker, was not transferred as a going concern because there was no transfer of assets, goodwill, or infrastructure, nor any evidence that the second respondent intended to acquire any part of the applicant's business or employ its staff. The court found that the applicant's business would terminate and not continu…

Source excerpt

• Section 197 Transfer
• Outsourcing Arrangements
• Transfer Of Business As Going Concern
• Employment Continuity
• Costs Award

Food and Allied Workers Union v Cold Chain (Pty) Ltd and Another (C565/2009)

Food and Allied Workers Union v Cold Chain (Pty) Ltd and Another (C565/2009) [2009] ZALC 109; [2010] 1 BLLR 49 (LC); (2009) 30 ILJ 2919 (LC) (30 September 2009)

Court

Labour Court

Case number

C565/2009

Judge

Francis

The Labour Court held that outsourcing warehousing and distribution to a sister company triggered section 197, and barred retrenchments linked to the transfer.

• Section 197 Transfer
• Outsourcing
• Retrenchment
• Interdict
• Employment Continuity
• Section-197-transfer

COSAWU v Zikhethele Trade (Pty) Ltd and Another (C264/2005)

COSAWU v Zikhethele Trade (Pty) Ltd and Another (C264/2005) [2005] ZALC 78; (2005) 26 ILJ 1056 (LC); [2005] 9 BLLR 924 (LC) (31 May 2005)

Court

Labour Court

Case number

C264/2005

Judge

Murphy AJ

The court found that the outsourcing arrangement and subsequent award of the contract to Zikhethele constituted a transfer of business as a going concern under section 197 of the LRA. Despite the absence of a direct contractual link between Khulisa and Zikhethele, the majority of Khulisa's employees continued to perform the same work for the same client at the same premises under Zikhethele. The court adopted a purposive approach, emphasizing the protection of employees' rights and continuity of employment. It held that the business retained its identity after the transfer, and all employment…

Source excerpt

• Transfer Of Business
• Section 197 Lra
• Outsourcing
• Second Generation Contracting Out
• Automatic Substitution
• Employment Continuity

Nokeng tsa Taemane Local Municipality and Other v Metsweding District Municipality and Others (JS227/03)

Nokeng tsa Taemane Local Municipality and Other v Metsweding District Municipality and Others (JS227/03) [2003] ZALC 81; (2003) 24 ILJ 2179 (LC); [2003] 11 BLLR 1154 (LC) (14 July 2003)

Court

Labour Court

Case number

JS227/03

Judge

A A Landman

Urgent declaratory application over section 197 of the LRA dismissed. The Labour Court found no transfer of Nokeng’s EMS to Metsweding as a going concern.

• Section 197 Transfer
• Declaratory Relief
• Employment Continuity
• Agency Agreement
• Costs Order
• Section-197-lra

Burman Katz Attorneys v Brand NO and Others (P565/00, P581/00)

Burman Katz Attorneys v Brand NO and Others (P565/00, P581/00) [2000] ZALC 130; [2001] 2 BLLR 125 (LC); (2001) 22 ILJ 128 (LC) (16 November 2000)

Court

Labour Court

Case number

P565/00, P581/00

Judge

Landman

The Labour Court reviewed a CCMA award on severance pay, holding that partnership dissolution did not end employment and that business continuity triggered section 197.

• Severance Pay
• Transfer Of Business As Going Concern
• Retrospective Application Of Statute
• Employment Continuity
• Jurisdiction Of Ccma
• Severance-pay