Abstract
This dissertation evaluates section 197 of the Labour Relations Act 66 of 1995 (“LRA”) against the constitutional imperatives of equity and the rule of law, with a particular focus on legal certainty. Section 197 governs the transfer of employment resulting from the transfer of a business as a going concern. This section was enacted to safeguard employment during the transfer of businesses. However, in view of the evolution of an ‘economic’, it is one of the most controversial and poorly understood parts of South African labour law, particularly in cases of outsourcing and retendering.
The study critically examines South African jurisprudence by revisiting significant judgments from the Constitutional Court and Labour Court, including NEHAWU v University of Cape Town, Aviation Union of SA v SAA, NUMSA v Fry’s Metals, and judgments in the lower courts that have grappled with the interpretation of section 197 in contexts such as outsourcing and retendering. It contends that although courts have acknowledged the provision's protective intent, there has been marked inconsistency in upholding these aims. This threatens the transformative capacity of section 197 and raises concerns regarding upholding the rule of law through the lens of legal certainty.
This work will compare the United Kingdom's Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") to examine how the comparative provisions protect employees affected by transfers. Concurrently, reference is made to the European Union’s Acquired Rights Directives as a source of influence for both the TUPE regulations and section 197 of our LRA. While it appears that section 197 did not seek to depart from the directives, TUPE expressly departs from the directives in cases of outsourcing, insourcing, and retendering.
The dissertation recommends a set of changes to section 197, including clarification of "a business as a going concern", a clear indication of when a change in service provision will be protected, and the strengthening of employers' consultation and disclosure duties. These proposed amendments aim to align the law on transfers of undertakings with our Constitutional imperatives by drawing lessons from foreign jurisprudence to overcome the hurdles posed by evolving commercial realities.