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[2015] ZALAC 118
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TAWUSA obo Others v TANSNAT (Pty )Ltd & 2 Others (JA95/13) [2015] ZALAC 118 (26 February 2015)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no:
JA95/13
In the matter
between
TAWUSA obo
OTHERS
Appellants
and
TANSNAT (PTY) LTD
& 2 OTHERS
Respondents
Heard:
26 February 2015
EX TEMPORE
JUDGMENT
DAVIS JA
[1] This is an appeal against a judgment of Cele, J, on the 20
th
of June 2013. In his judgment, Cele J, was required to deal with the
question as to whether the decision by third respondent to
appoint
first respondent as a substitute bus operator to perform public
transport passenger services in the greater Durban area,
albeit on a
month-to-month basis, amounted to a transfer of a business as a going
concern in terms of section 197 of the Labour
Relations Act, No. 66
of 1995 (the Act).
[2] The Appellants approached the court for relief in the following
terms:
1. Declaring that the bus service was and is the whole or part of a
business undertaking or services contemplated by section 197(1)(a)
of
the Act, accordingly a business for purposes of section 197.
2. Declaring that each of the successive outsourced arrangements
constitutes the transfer of the second respondent’s bus
service
as a going concern as contemplated by section 197 of the Act.
3. Declaring that the appellants’ members were formally
employed by the second respondent or deemed to have been transferred
from on service provider to the next on the same terms and conditions
of service as they enjoyed whilst employed by the second
respondent.
4. Ordering the first respondent, alternatively the second respondent
or any other party who has been appointed by the second respondent
to
allow the appellant’s members, whose names are appearing in
annexure ZM5 to resume their employment in the bus service.”
[3] Having been unsuccessful before the court, appellant approached
this court on appeal. There are a number of difficulties with
the
appeal, many of which concern the late filing of a replying
affidavit, heads of argument and a record.
[4] I do not intend to traverse the luminous debate which ensued
pursuant to these delays. My reason is that, if the substance
of the
relief has no basis in law, there is really no need to proceed to
deal with these particular questions.
[5] Mr Mane, who appears on behalf of the appellant, submitted that
the business was undertaken, that of a public transport passenger
service was transferred to the first respondent as a going concern.
Faced with the problem that the business was only transferred
on a
month-to-month basis, Mr Mane submitted that this particular
qualification did not, disturb the principle submission that
section
197 applied directly to the facts.
[6] To the extent that is relevant, section 197 of the Act provides
as follows:
‘
1.
(1)
In this section and in section 197A-
(a)
`business'
includes the whole or a part of any business, trade, undertaking or
service; and
(b)
`transfer'
means the transfer of a business by one employer (`the old employer')
to another
employer ('the new employer') as
a going concern .
(2) If a transfer of a business
takes place, unless otherwise agreed in terms of subsection (6)-
(a)
the
new employer is automatically substituted in the place of the old
employer in respect of all contracts of employment in existence
immediately before the date of transfer;
(b)
all
the rights and obligations between the old employer and an
employee
at the time of the
transfer continue in force as if they had been rights and obligations
between the new employer and the
employee
.’
[7] The concept of a transfer of a going concern and the test
therefore has been the subject of a considerable body of litigation.
Suffice to say that in
Aviation
Union of South Africa and Another
v
South
African Airways
(Pty)
Ltd and Others
[1]
the Constitutional Court said:
‘
In
deciding whether a business has been transferred as a going concern,
regard must be had to the substance and not the form of
the
transaction. A number of factors will be relevant to the
question whether a transfer of a business as a going concern
has
occurred, such as the transfer or otherwise of assets both tangible
and intangible, whether or not workers are taken over by
the new
employer, whether customers are transferred and whether or not the
same business is being carried on by the new employer.
What
must be stressed is that this list of factors is not exhaustive and
that none of them is decisive individually
’
.
[2]
At paragraph 53, the court then continued:
‘
Consistent
with this approach is the fact that the operation of the same
business by the transferee is in and of itself not determinative
of
the question whether a transfer as a going concern has taken place.
There must be other indicators that support the conclusion
that
when a business passed to the new owner, it was transferred as a
going concern. These indicators include whether assets,
employees or customers were taken over by the new owner
.
’
[8] In terms of this jurisprudence, a transfer of a going concern
means that the business, as a whole, is transferred from entity
A to
entity B; in other words, entity B takes over the business and
operates it in the same fashion as would have been the case,
had it
been operated by Entity A. The assets, the employees, the
customers are taken over and the business seamlessly continues,
but
now under the control of a new employer.
[9] The question in this case, is whether this concept is applicable.
Of particular relevance, are the following:
9.1 Prior to 2003, the Durban Transport Management Board established
by the predecessor, The EThekwini Municipality, provided public
passenger transport services in the greater Durban area. In order to
give effect to the provisions of the National Land and Transport
Transition Act, 2000, a decision was made to de-establish the Durban
Transport Management Board and to appoint an outside contractor
to
operate a passenger bus service for Durban.
9.2 On the 13
rd
of March 2003, an agreement was concluded
between the Municipality, being second respondent, the South African
Municipal Workers
Union and the Independent Municipal and Allied
Trade Union, the agreement being known as a rob-roy agreement. In
terms of this
agreement, employees, who do appear in annexure ZM5, to
which reference has already been made, were retrenched. In terms of
the
provision of the National Land Transport Transition Act, Remant
Alton Land Transport (Pty) Ltd (‘REMANT’) was appointed
to provide public passenger transport services in Durban.
9.3 It appears from the second respondent’s answering
affidavit, that many of the retrenched employees, to whom I have
already
made reference were then employed by REMANT, who, in terms of
an agreement with the second respondent, was obliged to provide
passenger
services for the period 1 October 2003 to 30 September
2010.
However, on 1 June 2009, REMANT gave notice of termination of the
agreement in terms of the provisions of the National Land Transport
Transition Act. The third respondent was then appointed by the first
respondent and substituted as bus operator with effect from
22 July
2009.
[10] What is vital to the disposition of this case is that, this
appointment was set aside by the KwaZulu Natal High Court (Case
number 60564/2009). An appeal against this judgment to the Supreme
Court of Appeal proved to be unsuccessful. Thereafter, first
respondent formed a public transport business in Durban in a fashion
referred to as a caretaker operator on a month-to-month basis,
pending the appointment of a new operator/s of public tender.
[11] In my view, in terms of the
jurisprudence
as set out in
Aviation Union of South Africa, supra
, a month-to-month
contract on a
pro tem
basis does not constitute the transfer
of a going concern. To be a going concern, the entire business has to
be taken over. It
then is operated seamlessly by entity B as opposed
to entity A in terms of the illustration that I provided earlier in
this judgment.
A month-to-month contract cannot be considered to be a
transfer of a business as a going concern, particularly when a
further requirement
is evident, that the month-to-month contract
would only operate, pending a new operator taking over of the tender.
This arrangement
cannot be a going concern as contemplated in section
197 or in terms of the interpretation given to that section by the
Constitutional
Court.
[12] There is, however, a further difficulty. Even if it was possible
to argue that a month-to-month contract constituted a transfer
of a
going concern, there is a problem as to which employees would be
affected by any positive relief that could be granted by
this Court.
In the founding affidavit, which instituted these proceedings, the
following appears:
[13] On 30 June 2009, REMANT effectively terminated the contract and
seized operations. Annexed thereto (marked ZM5) is a list
of the
appellant’s members who were employed by REMANT as at 30 June
2009. It is evident, both from the examination of the
rob-roy
agreement, which is attached to these papers, as well as the second
respondent’s answering affidavit, that this list
of employees
were retrenched in accordance with the rob-roy agreement and,
therefore, were not employed by REMANT.
[14] It is so that some of these employers were taken over by REMANT,
but what is not apparent from these papers is, which of these
individual employees was employed by REMANT on its last day of
operation. It is suggested that this difficulty could be circumvented
by way of the argument that the
onus
was borne by the
respondents to show that these employees were not so employed.
[15] This cannot be. An applicant must come to court to show which
employees are affected by a transfer in order for the court
to be
able to give clear and definitive relief pursuant to section 197. As
I indicated earlier, there are further difficulties
with this
litigation, mostly relating to questions of delay. For the reasons
that I have already mentioned I am not required to
definitively judge
on these questions.
Order
[16] For all of these reasons, therefore, I would dismiss this appeal
with costs.
Davis JA
Sutherland JA and
Mngqibisa-Thusi AJA concur in the judgment of Davis JA
[1]
2012
(
1
)
SA 321 (CC).
[2]
At para 50. Citing
National
Education Health and Allied Workers Union v University of Cape Town
and Others
2003 (3) SA 1
(CC) at para 56.