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

Motor Industry Staff Association and Another v Eastvaal Motors (Pty) Ltd (JS927/2019)

Motor Industry Staff Association and Another v Eastvaal Motors (Pty) Ltd (JS927/2019) [2024] ZALCJHB 256; (2024) 45 ILJ 2349 (LC) (17 July 2024)

Court

Labour Court Johannesburg

Case number

JS927/2019

Judge

RN Daniels

The court found, on the overwhelming balance of facts, that Eastvaal Motors (Pty) Ltd took transfer of the whole business of Motomid (Pty) Ltd as a going concern on 1 April 2019. The respondent continued the same business, with the same assets, customers, workforce, and premises, and recognized prior service and leave entitlement of employees. The dismissal of the second applicant was directly related to the transfer and thus automatically unfair in terms of section 187(1)(g) of the Labour Relations Act. The respondent's arguments regarding lack of intention, absence of share purchase, and ju…

Source excerpt

• Transfer Of Business As Going Concern
• Automatic Unfair Dismissal
• Section 197 Lra
• Jurisdiction Of Labour Court
• Compensation For Unfair Dismissal

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

Beedle v Slo-Jo Innovations Hub (Pty) Ltd (JA21/23; JA37/22)

Beedle v Slo-Jo Innovations Hub (Pty) Ltd (JA21/23; JA37/22) [2023] ZALAC 17 (17 August 2023)

Court

Labour Appeal Court

Case number

JA21/23; JA37/22

Judges

Waglay, Davis, Smith

The Labour Appeal Court held that the appellant's employment contract, including the restraint of trade clause, remained in force after the internal restructuring and transfer to the respondent. The evidence showed that the appellant's terms and conditions of employment were unchanged, and section 197 of the Labour Relations Act applied, resulting in automatic substitution of the employer. The restraint of trade clause was found to be reasonable in scope, duration, and geographic application, given the appellant's access to confidential information, trade secrets, and key customer relationshi…

Source excerpt

• Restraint Of Trade
• Transfer Of Business As Going Concern
• Section 197 Lra
• Confidential Information
• Public Policy
• Duration Of Restraint

Eagle Liner Transport (Pty) Ltd v Katiso Transport and Logistics CC and Others (J 856/21)

Eagle Liner Transport (Pty) Ltd v Katiso Transport and Logistics CC and Others (J 856/21) [2022] ZALCJHB 71; (2022) 43 ILJ 1674 (LC) (5 April 2022)

Court

Labour Court Johannesburg

Case number

J 856/21

Judge

Van Niekerk

The Labour Court held that Eagle Liner’s cross-border operation was transferred as a going concern, triggering section 197 of the LRA.

• Transfer Of Business As Going Concern
• Section 197 Lra
• Declaratory Relief
• Employment Contracts
• Joint And Several Liability
• Section-197-lra

Baloi and Another v Maddox Adams International South Africa (Pty) Ltd (J203/16)

Baloi and Another v Maddox Adams International South Africa (Pty) Ltd (J203/16) [2018] ZALCJHB 264 (15 August 2018)

Court

Labour Court Johannesburg

Case number

J203/16

Judge

Nkutha-Nkontwana

The Labour Court held that the applicants’ enforcement claim had prescribed and dismissed their bid to treat the respondent as liable under section 197A of the LRA.

• Prescription Of Arbitration Award
• Transfer Of Business As Going Concern
• Section 197a Lra
• Unfair Dismissal
• Joinder Application
• Labour-law

De Lucia v Bester and Another (JS947/13)

De Lucia v Bester and Another (JS947/13) [2017] ZALCJHB 278 (1 August 2017)

Court

Labour Court Johannesburg

Case number

JS947/13

Judge

E Tlhotlhalemaje

The court found that Kat De Beer Training (Pty) Ltd does not have a direct or substantial legal interest in the subject matter of the proceedings, as Bester had withdrawn his claim against it and seeks no relief from KDBT. Any potential joint and several liability under section 197 of the Labour Relations Act would only arise if Bester was dismissed for operational requirements, which is not the pleaded case. Financial interests or the avoidance of future litigation do not constitute a sufficient basis for joinder. The court held that joining KDBT would unnecessarily burden it with costs and…

Source excerpt

• Joinder Of Parties
• Automatically Unfair Dismissal
• Transfer Of Business As Going Concern
• Section 197 Lra
• Section 187 Lra

Fraser Alexander (Pty) Limited v Instasol Tailings (Pty) Limited and Others (J2718/2016)

Fraser Alexander (Pty) Limited v Instasol Tailings (Pty) Limited and Others (J2718/2016) [2016] ZALCJHB 523 (5 December 2016)

Court

Labour Court Johannesburg

Case number

J2718/2016

Judge

A van Niekerk

The court found that the termination of the applicant's contracts and the appointment of Instasol to provide identical services at the same sites for the same client constituted a transfer of a business as a going concern under section 197 of the Labour Relations Act. The continuity of operations, infrastructure, and the engagement of the applicant's employees by Instasol supported this conclusion. The court rejected Instasol's jurisdictional challenge, holding that the Labour Court is empowered to grant declaratory relief regarding section 197. The court applied a multi-factoral approach, co…

Source excerpt

• Transfer Of Business As Going Concern
• Section 197 Lra
• Declaratory Relief
• Jurisdiction Of Labour Court
• Costs Award

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

Kruger and Others v Aciel Geomatics (Pty) Ltd (JA87/2014)

Kruger and Others v Aciel Geomatics (Pty) Ltd (JA87/2014) [2016] ZALAC 29; (2016) 37 (ILJ) 2567 (LAC) (14 June 2016)

Court

Labour Appeal Court

Case number

JA87/2014

Judges

Waglay JP, Tlaletsi DJP, Davis JA

The Labour Appeal Court held that cancelling a non-exclusive distribution agreement did not trigger section 197 of the LRA, and dismissed the appeal.

• Transfer Of Business As Going Concern
• Section 197 Lra
• Motion Proceedings
• Affidavit Striking Out
• Employee Protection
• Section-197-lra