South Africa Case Law

Rural Maintenance (Pty) Limited and Another v Maluti-A-Phofung Local Municipality (CCT214/15)

Rural Maintenance (Pty) Limited and Another v Maluti-A-Phofung Local Municipality (CCT214/15) [2016] ZACC 37; 2017 (1) BCLR 64 (CC); (2017) 38 ILJ 295 (CC); [2017] 3 BLLR 258 (CC) (1 November 2016)

Court

Constitutional Court

Case number

CCT214/15

Judges

Mogoeng, Moseneke, Bosielo, Cameron, Froneman, Jafta, Khampepe, Madlanga, Mhlantla, Nkabinde, Zondo

The majority of the Constitutional Court held that leave to appeal should be refused. The Labour Appeal Court applied the correct test for a transfer of business as a going concern under section 197 of the LRA, requiring an overall assessment of all relevant factors, not the transfer of every asset. The factual record showed that Rural Maintenance did not transfer essential assets necessary for the Municipality to continue the business seamlessly, such as computers, vehicles, and debtor's books. The absence of these assets meant the Municipality could not carry on the same business, and thus…

Source excerpt

• Transfer Of Business As Going Concern
• Section 197 Lra
• Municipal Service Provision
• Employment Contracts Transfer
• Constitutional Jurisdiction
• Contract Validity