South Africa Case Law

Schnellecke Logistics Parts and Accessories (Pty) Ltd v Schenker South Africa (Pty) Ltd and Others (2025/002629)

Schnellecke Logistics Parts and Accessories (Pty) Ltd v Schenker South Africa (Pty) Ltd and Others (2025/002629) [2025] ZALCJHB 83 (21 February 2025)

Court

Labour Court Johannesburg

Case number

2025/002629

Judge

M Makhura

The Court found that the warehousing and operations management services provided by the applicant at MBSA's Parts Logistics Centre constitute a discrete business, not merely a service contract. The business comprises the use of MBSA's premises, equipment, IT systems, and workforce, forming an economic entity. The continuity of the scope of work, the transfer of assets and infrastructure, and the contractual provisions anticipating a section 197 transfer support the conclusion that the business is being transferred as a going concern. Schenker's assertion that it will use its own methods and w…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Transfer Of Business As Going Concern
• Employee Rights
• Contractual Obligations
• Costs Order

Zeda Car Leasing (Pty) Ltd t/a Avis Fleet and Others v Perlee and Others (JA01/24)

Zeda Car Leasing (Pty) Ltd t/a Avis Fleet and Others v Perlee and Others (JA01/24) [2025] ZALAC 8 (10 February 2025)

Court

Labour Appeal Court

Case number

JA01/24

Judges

Savage, Van Niekerk, Nkutha-Nkontwana

The Labour Appeal Court found that the closure of Car Mall and the outsourcing of its functions to DealersOnline did not constitute a transfer of business as a going concern under section 197 of the Labour Relations Act. The evidence showed that no tangible or intangible assets, operating systems, or employees were transferred in a manner that would trigger section 197. DealersOnline provided its own infrastructure and services to Avis Fleet, and only a limited number of former Car Mall employees were recruited. The main, dominant and proximate cause of the respondents' dismissal was operatio…

Source excerpt

• Automatic Unfair Dismissal
• Section 197 Transfer
• Operational Requirements Retrenchment
• Outsourcing
• Service Level Agreement

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

Mobile Telephone Networks (Pty) Ltd and Others v CCI SA (Umhlanga) (Pty) Ltd and Others (JA 12/2023)

Mobile Telephone Networks (Pty) Ltd and Others v CCI SA (Umhlanga) (Pty) Ltd and Others (JA 12/2023) [2023] ZALAC 10; (2023) 44 ILJ 1906 (LAC); [2023] 10 BLLR 1006 (LAC) (15 June 2023)

Court

Labour Appeal Court

Case number

JA 12/2023

Judges

Waglay JP, Sutherland JA, Gqamana AJA

The Labour Appeal Court held that section 197 of the Labour Relations Act was not triggered by the termination of the contract between MTN and CCI. Although a discrete MTN business unit existed within CCI, there was no transfer of that business unit as a going concern to MTN, Ibridge, or Ison. The termination resulted only in a redistribution of call volumes among existing service providers, with no transfer of assets, operational capacity, or workforce retaining its identity. The facts did not support the Labour Court's finding that section 197 applied, as the essential elements of a transfe…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Going Concern
• Job Security
• Contractual Termination

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

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

NUMSA obo Members v Sacks Packaging (Pty) Ltd and Others (D396/20)

NUMSA obo Members v Sacks Packaging (Pty) Ltd and Others (D396/20) [2020] ZALCD 14; (2021) 42 ILJ 165 (LC); [2021] 2 BLLR 212 (LC) (8 September 2020)

Court

Labour Court Durban

Case number

D396/20

Judge

Whitcher

The court found that the transfer of contracts of employment from the First Respondent to the Second Respondent did not constitute a transfer of business as a going concern under section 197 of the LRA. Although the First Respondent conceptually and operationally distinguished between core and non-core functions, the evidence showed that employees performed both types of functions interchangeably. The First Respondent's reliance on 'predominance' of non-core functions was insufficient to establish a discrete and stable set of employees dedicated solely to the transferred functions. The lack o…

Source excerpt

• Section 197 Transfer
• Going Concern Definition
• Outsourcing
• Interdictory Relief
• Employment Contracts
• Service Level Agreement

Dimension Data (PTY) Ltd v Omega Digital Services (PTY) Ltd and Another (J2163/19)

Dimension Data (PTY) Ltd v Omega Digital Services (PTY) Ltd and Another (J2163/19) [2019] ZALCJHB 378 (13 December 2019)

Court

Labour Court Johannesburg

Case number

J2163/19

Judge

Lagrange

The court found that the awarding of the new contract to Omega Digital Services to service and maintain Sasol's audio-visual and conferencing facilities did not constitute a transfer of a business as a going concern under section 197 of the LRA. The service rendered was the maintenance of Sasol's infrastructure, not the transfer of an economic entity or discrete business. The mere use of Sasol's infrastructure and the presence of a dedicated team did not amount to the transfer of a business. The court distinguished this case from precedents where a defined business undertaking was transferred…

Source excerpt

• Section 197 Transfer
• Outsourcing
• Joinder
• Service Provision Change
• Costs Order

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