The court also emphasised that should entities wish to avoid the provisions of section 1972, they could seek to reach an agreement in terms of section 1976 of the lra. In this act, unless the context otherwise requires authority means the lesotho revenue authority established under section 4. Section 197 of the labour relations act, no 66 of 1995 lra was enacted to change the common law position, with the effect that an automatic transfer of contracts of employment from the transferring employer previous employer to the acquiring employer new employer now takes place in the event that the. Section 197 of the labour relations act, no 66 of 1995 lra provides that if a transfer of business takes place, all the rights and obligations between the old employer and an employee at the time of the transfer continue as if they had been the rights and obligations between the new employer and the employee. The court also emphasised that should entities wish to avoid the provisions of section 197 2, they could seek to reach an agreement in terms of section 197 6 of the lra. Jan 25, 2016 2 outsourcing of services be they internal or external to contractors normally constitute the takeover of a going concern for the purposes of section 197 of the lra.
Section 197 of the labour relations act lra requires the new employer, in a takeover as a going concern, to take over all the employees of the old employer. This controversy over the purpose of section 197 was resolved twice. The key question was whether, upon termination of service level agreements between. One of the reasons for the 2006 transnet strike was the concern of employees of a transnet subsidiary over their transfer to an entity controlled by the department of transport. So that means all benefits remain intact and just the employer changes. You start amortization the month the intangible is acquired. To hold otherwise would allow for an abuse of section 197 of the lra. It is clear that should the factors discussed in this judgment be met, a transfer of a going concern can be said to occur in outsourcing arrangements. On the face of it, it may appear that a transfer of services from a service provider to. Transfer of employees in terms of section 197 of the. This section forces the new employer to take over all the labour related obligations of the old employer.
If conciliation fails, a party may request that the ccma resolve the dispute by arbitration. In view of this, section 197 of the labour relations act lra comes into effect when outsourcing occurs and forces the new operator of the service to take over all the labour. Mar, 2015 on 3 march 2015, the labour appeal court lac ruled that the courts prior interpretation of the validity of termination notices that are issued in violation of s189a8 of the labour relations act, no 66 of 1995 lra was incorrect. Organs of state not immune to section 197 of the lra. Firstly, by the enactment of an amended section 197 in the lra amend ment act of 2002 that clarifies the intent of the original section and in troduces a range of novel provisions and subsequently, by the decision.
As section 1862 b refers to suspension together with any other unfair disciplinary action short of dismissal, it clearly includes both categories. Section 197 shall not apply to a government company, vide notification no. In south african municipal workers union and others v rand airport management company pty ltd and others, the labour appeal court came to the conclusion that section 197 will apply if it passes the test of a. Labour relations act, lra labour court and labour appeals. The legal question that arose was whether such insourcing would trigger section 197 of the labour relations act the lra, which sets out the employee transfer obligations on employers whenever there is a transfer of business as a going concern. If you continue browsing the site, you agree to the use of cookies on this website.
Summary of the labour relations amendment act 6 of 2014 elrc. Stateowned entities are not exempt from section 1972 of. In terms of section 197 a business includes the whole or a part of any business. As section 1862 b refers to suspension together with any other unfair disciplinary action short of dismissal, it. The seminar focused on transfers of businesses in terms of s 197 of the labour relations act 66 of 1995 and how such transfers affect collective agreements. May 24, 2017 the section 189 retrenchment process in terms of the labour relations act section 189 of the labour relations act lra permits employers to dismiss employees for operational requirements. I have recently been requested by a consultant to submit a brief memorandum pertaining to the statutory rights and obligations as stipulated in section 197 of the labour relations act, act 66 of 1995 as amended the lra. This act may be cited as the lesotho revenue authority act, 2001 and shall come into operation on such date as the minister may, by notice published in the gazette, appoint. Section 197 of the labour relations act, no 66 of 1995 lra was enacted to change the common law position, with the effect that an automatic transfer of contracts of employment from. Second generation transfers in terms of section 197 of the lra jan du toit section 197 of the labour relations act deals with the transfer of a business and the rights of employees affected by such a transaction. Previously, section 197 allowed for the automatic transfers of employees when there was transfer of the whole or part of a business, trade or undertaking.
In terms of section 197 a business includes the whole or a part of any business, trade, undertaking or service. Jan 22, 2012 whistleblowing employees are also protected by sections 1862d and section 1871h of the labour relations act lra. Section 65 of the lra has been amended to make it clear that the right to strike or lockout is limited if the issue in dispute is one that a party has the right to refer to arbitration or the labour court in terms of the lra or in terms of any other employment law i. An employer who employs 50 or less employees are subject to the process set out in section 189 of the lra, which. Transfer means the transfer of a business by one employer the old employer to another employer the new employer as a going concern. Second generation transfers in terms of section 197 of the lra. Sep 19, 2014 an exploration of section 197 of the labour relations act in south africa slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. An exploration of section 197 of the labour relations act in south africa slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Section 197 of the income tax act, 1961 certificate of lower deduction or nondeduction of tax at source instructions for issue of certificate us 197 mandatory through itd system. The judgement further demonstrates that municipalities and stateowned entities cannot rely on budgetary constraints to circumvent the requirements of the lra.
Provisions of section 197 labour relations act transfer. Out of recent case law it can be established that, when a part of business is being outsourced, section 197 of the lra will apply. Revisiting the labour relations act 66 of 1995 danshaw. Does insourcing trigger employee transfer obligations in. Section 197 of the lra clarifies what happens if a business. Contractors must take over staff in outsourcing deal labour. Section 197 and 197a of income tax act 1961 certificate for deduction at lower rate and no deduction to be made in certain cases are defined under section 197 and 197a of income tax act 1961.
Section 197 of the labour relations act states the following. The application was opposed and the respondents raised number preliminary points. Section 197 provides for the transfer of employment contracts upon the transfer of a business. With the amendments, the new employer is automatically substituted in place of the old employer in respect of all contracts of employment.
In a ruling handed down by the commission for conciliation, mediation and arbitration ccma on 29 june 2015 in the matter between assign service pty ltd v krost services and racking pty ltd and another ecel165215 the commissioner ruled on the interpretation of the deeming provision contained in s198a3b of the labour relations act 66 of 1995 lra. Labour relations act section 198 klass looch associates. Section 189 of the labour relations act lra permits employers to dismiss employees for operational requirements. Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits effective from 1st april, 2014exemptions.
If so, then make sure that you know about and comply with the provisions of the labour relations act. Reason i am asking this, i was moved from company a to company b via section 197. In particular, you need to be aware of section 197 which deals with the transfer of the employment contract from the old employer to the new employer. A critical analysis of section 197 of the labour relations. A take over of an enterprise as a going concern essentially means that the new employer is carrying on the same business as the old employer after a takeover. Previously, section 197 allowed for the automatic transfers of employees when there was transfer of the. Section 211 states that any registered trade union may inform an employer in writing should he or she wish to exercise one or more rights conferred by this part in the workplace. Business to include the whole or part of any business, trade, undertaking or service. Nov 24, 2011 in terms of section 1872b of the labour relations act, act 66 of 1995 the lra a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity. The labour relations act lra was amended in 2002 to include a service in the definition of an entity that may be taken over as a going concern for purposes of section 197 of the lra.
Explanatory notes were introduced in 1999 and accompany all public acts except appropriation, consolidated fund, finance and consolidation acts. The act in section 197 thereof deals with the transfer of a contract of employment and defines. Transfer of employees in terms of section 197 of the labour. Section 197 intangibles are certain intangible assets acquired after august 10, 1993 or after july 25, 1991, if chosen in connection with the acquisition of a business which must be amortized over 15 years from the date of acquisition regardless of the assets useful life. In terms of section 1872b of the labour relations act, act 66 of 1995 the lra a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity. Section 197 of the income tax act, 1961 certificate of. Your guide to labour law in south africa labour guide. These are defined as requirements based on economic, technological, structural or similar needs of the employer. Transfer of employment contracts section 197 labour law. The parties 2 the applicants are both trade unions registered as such in. The parties 2 the applicants are both trade unions registered as such in terms of the labour relations act 66 of 1995 the lra. Section 197 of the labour relations act, no 66 of 1995 lra was enacted to change the common law position, with the effect that an automatic transfer of contracts of employment from the transferring employer previous employer to the acquiring employer new employer now takes place in. Whistleblowing employees are also protected by sections 1862d and section 1871h of the labour relations act lra.
The question to be answered was whether the commission for conciliation mediation and arbitration ccma has jurisdiction to hear. Organs of state not immune to section 197 of the labour. Predismissal arbitrations in terms of section 188a of the lra. Section 197 of the labour relations act deals with the transfer of a business and the rights of employees affected by such a transaction. Labour relations act, lra labour court and labour appeals court. Employees rights under a new employer when a business is. In bracks no and another v rand water and another 2010 31 ilj 897 lac the labour appeal court lac had an opportunity to provide guidance and clarity for the proper interpretation of section 19112 of the labour relations act 66 of 1995 lra. Text created by the government department responsible for the subject matter of the act to explain what the act sets out to achieve and to make the act accessible to readers who are not legally qualified. Sabinet the interpretation and application of section. Help on information lra section 197 and ring fenced this site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register. Contract transfers a section 197 takeover hr pulse. Section 197 of income tax act certificate for deduction at. Employers are not prevented from concluding agreements to bestow greater rights upon employees, or the trade unions of such employees than that contained in section 197. This resulted in section 197 of the labour relations act 66 of 1995 being amended in 2002.
Can the new owner of a business dismiss existing employees. A registered trade union who seeks organisational rights at the workplace needs to comply with section 21 of the labour relations act lra. Cliffe dekker hofmeyr ccma ruling on the interpretation. A take over of an enterprise as a going concern essentially means that the new employer is carrying on. Section 197 shall not apply to specified public company, vide notification no. What or where can i find definition of what exactly does ring fencing mean and how and if it protects employee. Meaning of dismissal dismissal means thata an employer has terminated a contract of employment with or without notice. May 18, 2015 section 197 of the labour relations act lra places heavy responsibilities on the employer who takes over the business or part thereof of another employer as a going concern. In terms of section 197 of the labour relations act the lra, the sale of a business as a going concern takes place subject to the provisions of the lra. Section 197 of the labour relations act 66 of 1995 regulates the transfer of a business as a going concern. The constitutional court recently delivered a judgement in the case of city power ltd v grinpal energy management services pty ltd, concerning section 197 2 of the labour relations act 66 of 1995 the lra. A recent constitutional court judgment download case here 93 in the case of city power v grinpal energy management services pty ltd proves that organs of state are not immune to section 197 of the labour relations act.
The general consequence of this provision is that all employment contracts are. The sale of a business as a going concern takes place subject to the provisions of the lra. When does a contract transfer fall under section 197 of. Every employee has the right not to be unfairly dismissed. Business sold as a going concern legal obligations of. In this act, unless the context otherwise requires authority means the. Section 197 of income tax act certificate for deduction at lower rate. Section 1862b of the lra unfair suspension the unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee. By continuing to use this site, you are consenting to our use of cookies.
I need some clarity with regards to companyemployee being ring fenced after section 197 move. Section 197 of the labour relations act lra places heavy responsibilities on the employer who takes over the business or part thereof of another employer as a going concern. Help on information lra section 197 and ring fenced. Section 211 states that any registered trade union may inform an employer in writing should he or she wish to exercise one or. This case reiterates and reasserts the nature and scope of application of section 197 of the lra. Request for arbitration demarcation disputes section 62 must be processed on lra form 3. The changes to section 198 of the labour relations act 66 of 1995 lra is considered as one of the most significant, as this will deal with the issues regarding temporary employment service or labour brokers as they are more commonly known.
Section 1862d classifies as an unfair labour practice any employer conduct short of dismissal resulting in an occupational detriment to an employee who has made a protected disclosure as per the pda. Cliffe dekker hofmeyr ccma ruling on the interpretation of. Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits effective from 1st april, 2014 exemptions section 197 shall not apply to a government company, vide notification no. New labour relations act the lra section 197 of the lra states that the contracts of employment of the existing employees are automatically transferred to the new employer subject to the provisions of the section.