CCT08/11

[2011] ZACC 31

2012 (1) SA 321 (CC)

2012 (2) BCLR 117 (CC)

[2012] 3 BLLR 211 (CC)

(2011) 32 ILJ 2861 (CC)

Yacoob J Majority judgment

Jafta J dissenting judgment

24 November 2011

http://hdl.handle.net/20.500.12144/3639

Application for leave to appeal against a judgment of the SCA: South African Airways (Pty) Ltd v Aviation Union of South Africa and Others 2011 (3) SA 148 (SCA); 2011 (2) BLLR 112 (SCA) in terms of which an order granted by the Labour Appeal Court was set aside: Aviation Union of South Africa and Others v South African Airways (Pty) Ltd and Others 2010 (4) SA 604 (LAC); 2010 (1) BLLR 14 (LAC). The case served before the Labour Appeal Court as an appeal against the judgment of the Labour Court: Aviation Union of South Africa and Others v South African Airways (Pty) Ltd and Others 2008 (1) BLLR 20 (LC).

Employees of South African Airways (Pty) Ltd (SAA) were transferred to LGM South Africa Facility Managers and Engineers (Pty) Ltd (LGM) as part of a transfer of SAA’s facilities management under a fixedterm contract. SAA later cancelled the agreement and notified LGM that it had to prepare a hand-over plan. The key issue was whether SAA or whichever other entity the facilities management business was transferred to by SAA in view of the termination of the fixed-term agreement was obliged to take back the employees. Section 197 of the Labour Relations Act 66 of 1995 (LRA) provides that where a business is “transferred” from an “old employer” to a “new employer” “as a going concern” the workers will follow the business and by operation of law take up employment with the new employer. The question was whether the termination of the agreement (commonly called “second generation outsourcing”) triggered this provision. The majority judgment, per Yacoob J, held that the socalled “generation” of outsourcing is not determinative of whether section 197 was applicable. Regardless of which entity the business was transferred to, the question was whether the transfer was of a business as a going concern. And as regards relief, a transfer does not have to have occurred before relief can be granted. The Court found that the transfer was made inevitable by SAA’s cancellation of the outsourcing contract. This amounted to the transfer of a business as a going concern. The workers therefore fell within section 197 and should have followed the business. The Court made a declaratory order to this effect. Jafta J, in a minority judgment, agreed that section 197 may be applicable regardless of the generation of outsourcing. But he found that on the scant evidence, the union had failed to establish that the cancellation had in fact resulted in a transfer of business as a going concern. The matter should therefore be referred back to the Labour Court for evidence to be led. Majority: Yacoob J (Ngcobo CJ, Cameron J, Froneman J, Khampepe J and Van der Westhuizen J concurring). Dissent: Jafta J (Moseneke DCJ, Mogoeng J, Mthiyane J and Nkabinde J).