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[2018] ZALAC 33
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Imvula Quality Protection (Pty) Ltd and Others v University of South Africa (JA122/2017) [2018] ZALAC 33; [2018] 12 BLLR 1151 (LAC); (2019) 40 ILJ 104 (LAC) (25 September 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA122/2017
In
the matter between:
IMVULA
QUALITY PROTECTION (PTY)
LTD
First
Appellant
PERSONS
LISTED IN ANNEXURE “A”
Second
to Further Appellants
RED
ALERT TSS (PTY)
LTD
Third
Appellant
PERSONS
LISTED IN ANNEXURE “B”
Fourth
to Further Appellants
and
UNIVERSITY
OF SOUTH
AFRICA
Respondent
Heard:
23 August 2018
Delivered:
25 September 2018
Summary:
Meaning and interpretation of s197 of the LRA – distinctive
feature of this case from normal transfer of business
as a going
concern in that employer (university) insourcing security personnel
previously employed by appellants. University
also concluded a
shared service agreement with appellants. Appellants contend that the
absence of a transfer of tangible assets
to the university was
immaterial to the application of s 197, given that the employment of
their employees by the university amounted
to a transfer which
triggered the operation of s 197.
Held
that
What
occurred was that following its response to “fees must fall”
by way of the recommendations of the multi-stakeholder
task team, the
university took in a range of people who had previously been employed
by the appellants as security guards and entered
into employment
contracts with them. At the same time, it did not seek to run a
security business, whether in whole or in part;
hence the
significance of the shared service agreement. The business of
providing security at the campuses of respondent constituted
more
than simply the existence of a group of guards patrolling the campus
without more; that is without management, equipment or
strategy with
regard to their responsible deployment. None of these tasks was taken
over by the university.
It
follows that, if the words “transfer of a business as going
concern” have to be given justifiable meaning, it cannot,
in
this case and on these facts, be concluded that the transfer of a
significant portion (but not all) of the security guards without
more
was the transfer of a business as a going concern, so that once the
“taking in” of the security guards at the
workplace
occurred, the business without any outside party operated seamlessly.
Apart from equipment, if necessary the outside
party which had
entered into the shared service agreement would supply more guards.
This arrangement cannot be said to fall within
the meaning of a
transfer of a business as a going concern, as contemplated by s 197
of the LRA.
Coram:
Phatshoane ADJP, Davis JA and Murphy AJA
JUDGMENT
DAVIS
JA
Introduction
[1]
This case turns upon the
meaning of a transfer of a business as a going concern as set out in
s197 of the Labour Relations Act 66
of 1995 (‘LRA’).
Although, as will become evident from the legal analysis set out in
this judgment, s197 of the LRA
has been examined in many cases, a
distinctive feature of this case is that it involves a university
(respondent) which embarked
on a programme of insourcing when it
employed two third of personnel rendering security services at
respondent’s premises,
who had previously been employed by
first and third appellants. In other words, this case is somewhat
different from the standard
s197 case, in which company A is alleged
to have purchased or otherwise acquired a business as a going concern
from company B.
The
factual background
[2]
On 05 May 2015, first appellant
and respondent concluded an agreement for the provision of security
services at the various campuses
of respondent. Clause 1 of annexure
A to this agreement contained a description of the services which
were to be provided by first
appellant:
‘
The
Services will include, but not be limited to the following:
1.1
The
Service Provider shall provide the University with high level access
control, security and patrol services in order to protect
and secure
the University’s staff, students, visitors, property, assets
and reputation.
1.2
The
Service Provider shall provide a sufficient number of on-site
properly pre-trained, efficient and competent employees and
supervisors/managers
(hereinafter collectively referred to as its
“personnel”) in order to provide the required Services.
The number and
qualification of personnel as well as the time and
premises where the Services must be rendered are set out in Annexure
“B”
attached hereto”
[3]
In terms of Clause 9.1, read
with Clause 4 of annexure A, the agreement was to subsist for five
years, although Clause 9.2 permitted
respondent to terminate the
agreement after 12 months, by providing first appellant with
one-month calendar notice.
[4]
During 2015, South Africa
witnessed unprecedented and widespread student protests across
university campuses under the banner of
“fees must fall”.
Among the demands made by the “fees must fall” movement
was that universities should
insource a host of functions which
hitherto had been outsourced, including security services. Respondent
reacted to these protests
by constituting a multi-stakeholder task
team which included trade unions and political parties to address
many of the issues which
had been raised by the “fees must
fall” movement, including its demand for insourcing.
[5]
On 19 October 2016,
respondent’s executive council passed a series of resolutions,
including one in which “insourcing
of workers at UNISA is
supported”. The agreement which was reached by the
multi-stakeholder task team on insourcing included
the provision that
910 of a total of 1413 outsourced staff members would be insourced as
part of respondent’s permanent staff
compliment. The current
contracts of various service providers would be terminated as soon as
was practically possible. A new business
model was developed which
was called the “shared services model”. This model
envisaged that, while the majority of
staff engaged in the provision
of security services would be employees of respondent, security
services would continue to be provided
by outsourced service
providers but personnel, as far as possible, they would employ staff
of respondent as the security.
[6]
Pursuant to this decision, on
18 November 2016, respondent wrote to first appellant in which it
stated the following:
‘
1.
This serves to inform you that in terms of clause 9.2 of the above
mentioned agreement UNISA gives notice of termination of the
agreement to be effective from 3 March 2017.
2.
The aforementioned decision has been taken in light of issues
encountered by a number of universities concerning the outsourcing
of
services.’
[7]
I should add that a similar
agreement to that concluded (and then terminated) between first
appellant and respondent had existed
between third appellant and
respondent, in which the former provided security services to
respondent on one of its campuses and
certain of its satellite
offices in Pretoria. A third security company Reshebile, which is not
a party to the litigation, also
provided certain security services to
respondent.
[8]
The key differences between the
agreements entered into between respondent and first appellant and
third appellant respectively
and the new shared services agreement
can be summarised thus: In the earlier agreements, the first
appellant and third appellant
provided high level access control
security and patrol services, pre-trained employees and supervisors
and managers provide security
services, developed high level
monitoring systems and risk analysis relating to the provision of all
the security services and
training management and supervision of
staff, provided security vehicles, mobile phones and radios and rain
coats to all of the
staff. In terms of the new agreement, the
obligations of the independent service provider were to provide
equipment and infrastructure,
torches, radios, guard tracking and
monitoring equipment registers, vehicles and staff uniforms. By
contrast, respondent would
employ the human resources required for
the security service. The obligation of a new service provider would
include the provision
to respondent of managers and supervisors
employed by the service provider to ensure the overall management of
the security service.
[9]
The dispute between the parties
was whether respondent’s termination of the contracts with both
first appellant and third
appellant, taken together with its decision
to employ the majority of those who had previously been employed by
first appellant
and third appellant constituted a transfer of a
business as a going concern for the purposes of s197 of the LRA.
[10]
Van Niekerk J, sitting in the
court
a quo,
held
that s197 of LRA was not applicable. After analysing the relevant
agreements, the learned judge came to the following conclusion:
‘
The
true position therefore is that the contract for the provision of
services concluded between UNISA and iMvula and Red Alert
respectively have come to an end, and that no part of the
infrastructure for the conducting of the business of providing a
security
service is to be transferred to UNISA. In those
circumstances, UNISA’s decision to insource in terms of the
shared services
model and the offers of employment consequently made
to some of iMvula and Red Alert’s staff does not trigger s197.’
[11]
With leave of the court
a
quo
, appellant has
approached this Court on appeal.
Section
197 of the LRA
[12]
Section 197, to the extent
relevant, reads thus:
‘
(1)
In this section and section 197 A –
(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;
(c)
anything done before the transfer by or in relation to the old
employer, including the dismissal of an employee or the commission
of
an unfair labour practice or act of unfair discrimination is
considered to have been done by or in relation to the new employer;
and
(d)
the transfer does not interrupt an employee’s continuity of
employment, and an employee’s contract of employment
continues
with the new employer as if with the old employer.’
[13]
Stripped to its essentials, the
requirements for the application of s197 are:
(i)
there must be a transfer by the
old to the new employer,
(ii)
what must be transferred is the
whole or part of the business; and
(iii)
the whole of part of the
business must be transferred as a going concern.
[14]
This section, as indicated
earlier, has received considerable judicial attention. See in
particular
City Power (Pty)
Ltd v Grinpal Energy Management Services (Pty) Ltd and Others (City
Power
);
[1]
Rural Maintenance (Pty) Ltd
and another v Maluti’a ‘Phofung Local Municipality
(
Rural Maintenance).
[2]
.
[15]
In
City
Power
, a tender was awarded
by the appellant to first respondent for the supply of prepaid
metering electricity services in Alexandra
township. The original
tender contracts lapsed in 2010. Subsequently, additional service
delivery agreements were concluded between
the parties for the
installation of more prepaid meters and for the maintenance of meters
previously installed. In 2012, the appellant
informed the respondent
that it had terminated the contracts with immediate effect by reason
of the respondent having allegedly
submitted a fraudulent tax
certificate. Eventually, the parties agreed to terminate the
contracts. It was further agreed that the
appellant would continue to
render the services previously provided by the respondent with a new
service provider who was appointed
and, in doing so, it would use
respondent’s infrastructure. It did, however, refuse to take
over respondent’s employees.
Respondent contended that its
business had been transferred as a going concern as contemplated by
s197 of the LRA. On this basis,
it argued that appellant was obliged
to take over its employees upon the termination of the service
delivery agreement.
[16]
In a judgment, on behalf of a
unanimous court, Tshiqi AJ confirmed the correct nature of the
earlier test for determining whether
a business is transferred as a
going concern, as laid out in
National
Education Health and Allied Workers Union (NEHAWU) v University of
Cape Town and Others
(
NEHAWU)
[3]
:
‘
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 the workers are taken over by the new employer,
whether customers are 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.
’
[17]
On the facts of
City
Power,
and having applied
the test set out in
NEHAWU,
supra,
the court held that
the appellant had taken over the “full business “as is”
with all the complex network infrastructure,
assets, knowhow and
technology required to install and operate the pre-paid electricity
system.”.
[4]
It had done so “with the clear intention of maintaining
uninterrupted electricity services to Alexander township. The
project
continued after termination of the service level agreements and
completion of the handover process. The business is identifiable
and
it is discrete. Ultimately a business of providing a system of
prepaid electricity to residents of Alexandra Township continued,
save that it was now conducted by a different entity.”
[5]
[18]
More recently, in
Rural
Maintenance, supra,
respondent’s electricity services had fallen into disrepair. It
concluded an agreement with applicant, for the outsourcing
to
applicant of the management, operation, administration, maintenance
and expansion of the municipalities electricity supply for
a period
of 25 years. In terms of this agreement, 16 municipal employees were
transferred to applicant which then commenced performing
its
obligations under the agreement. Two years later, respondent informed
applicant that, because its previous municipal manager
had lacked the
authority to conclude the agreement on its behalf, respondent did not
regard itself as bound by the terms of the
agreement. By this time
applicant had incurred considerable expense in expanding the
operation and had increased the workforce
to 127 employees. It then
handed back to applicant what it claimed was “the entire
electricity distribution infrastructure
of the municipality that
Rural Maintenance utilised, maintained, upgraded and was in control
of”. In its view, this amounted
to a transfer of the business
as a going concern in terms of s197 of LRA.
[19]
The dispute between the
parties, in this case, turned on two issues, namely whether the
agreement was null and void from the outset
and, secondly, whether,
at a factual level, applicant’s business had been transferred
to respondent as a going concern. In
the majority judgment,
[6]
Froneman J contrasted the factual situation of
City
Power supra
with that which
confronted the court in
Rural
Maintenance
by stating the
following:
‘
The
difference between the two factual situations is important in the
context of the transfer of service businesses to municipalities.
As
noted above,
City
Power
did not find that the mere termination of a service contract
triggered the application of s197 of the LRA. In that case there was
a transfer of a fully functional business in its expanded form to
City
Power
.
Without that kind of “as is” transfer, the termination of
the service contract may literally mean only a termination
of the
business, not its transfer back to the Municipality. The employment
obligations of employees must then be dealt with by
the erstwhile
service provider under s 189 of the LRA if the business comes to an
end for operational reasons. It cannot seek to
transfer those
obligations to the Municipality under the guise of s197, but
nevertheless seek to retain for itself the means it
used to conduct
the service business as is the case here. It is not only the
interests of employees that must be protected in the
interpretation
of application of s197, but even if their protection is of primary
concern it needs to be kept in mind that the
protection of workers is
not solely governed by s197 in these kinds of situations. Employees
are also protected by the retrenchment
provisions in s189. The choice
here is which employer should be responsible for the workers affected
by the change in circumstance.
’
[7]
[20]
Of equal relevance is a further
passage from the judgment of Froneman J in which the learned judge
writes:
‘
I
agree that for a transfer of a business as a going concern to occur,
not all the assets of the business have to be transferred
and that it
depends on the nature of the business. That factual application
of a flexible test has long been at the heart
of our going-concern
business transfer jurisprudence. The onus rested on Rural to
set out what work the more than hundred
additional employees it
employed were involved in and what means were provided to them to do
that work. It is common cause
that certain equipment was not
transferred to the Municipality, but it appears improbable that at
least some of the newly employed
employees did not need and use the
equipment in order to do their work. Without the transfer of
the means to do the work
they did as part of Rural’s business,
there could be no transfer of the business to the Municipality as a
going concern.
The assets that Rural did not transfer back to
the Municipality were essential to the profitability and operation of
the business.
Without those crucial assets, the
Municipality could not have carried on the business without any major
difficulties.
’
[8]
[21]
Although this judgment eschewed
laying down clearly demarcated guidelines, it is clear that the
inquiry is fact driven. To
constitute a transfer of a business
as a going concern, not all the asset of the business need to be
transferred, nor do all the
relevant employees. But what must
be transferred are those assets and personnel that are essential to
the business as it
was operated by the transferor. The transfer
allows the actual business or a clearly demarcated portion thereof to
operate
seamlessly after the transfer.
Comparative
law
[22]
In the cases cited in
Rural
Maintenance
, attention was
devoted to European law, particularly owing to two foreign statutory
instruments, being the Acquired Rights Directive
(ARD) which applies
in the European Union and the Transfer of Undertakings (Protection of
Employment) Regulations (TUPE) which
incorporated the requirements of
the ARD into the law of the United Kingdom
[23]
Reference was made, in
particular, to the decision in
Abler
v Sodexho MM Catering Gesellschaft GmbH (Sodexho),
[9]
where the European Court of Justice had to determine whether the then
applicable ARD applied to a change of catering service providers
at a
hospital, despite the absence of the sale of assets and transfer of
staff between the old and new service providers. Having
stressed that
the importance to be attached to each criterion for determining
whether there has been a transfer will necessarily
vary according to
the activity carried on, the court held: “[c]atering cannot be
regarded as an activity based essentially
on manpower since it
requires a significant amount of equipment”.
[10]
Thus, the failure to transfer the staff was not determinative of the
enquiry to the application of the ARD. As the court held,
in effect,
the transfer of the right of use of the hospital’s premises and
equipment rendered the ARD applicable.
[24]
In
Rural
Maintenance,
Froneman J at
para 34 cited a passage from
Sodexho
as follows:
‘
The
national court, in assessing the facts characterising the transaction
in question, must take into account the type of undertaking
or
business concerned. It follows that the degree of importance to
be attached to each criterion for determining whether
or not there
has been a transfer within the meaning of Directive 77/87 will
necessarily vary according to the activity carried
on, or indeed the
production or operating methods employed in the relevant undertaking,
business or part of a business (Süzen,
paragraph 18, and
Hidalgo, cited above, paragraph 31).
’
He concluded that “
This
approach accords with the approach in our law, set out in
NEHAWU
and
Aviation
Union
.”
[25]
Given this
dictum
,
it was unsurprising that Mr Myburgh, who appeared together with Mr
Boda and Mr Itzkin on behalf of the appellant, referred to
more
recent decisions of the European Court of
Justice,
including
Securitas
v ICTS Portugal ECLI
: C:
2017: 780. This case concerned whether a change of the security guard
service provider, without the transfer of the guards,
fell within the
scope of the 2001 ARD. The court made the following findings:
‘
It
follows that the degree of importance to be attached to each
criterion for determining whether or not there has been a transfer
within the meaning of Directive 2001/23 will necessarily vary
according to the activity carried on, or indeed the production or
operating methods employed in the relevant undertaking, business or
part of a business…
The
court has therefore held that, in a sector where the activity is
based essentially on manpower, the identity of an economic
entity
cannot be retained if the majority of its employees are not taken on
by the alleged transferee … Where, however,
the activity is
based essentially on equipment, the fact that the former employees of
an undertaking are not taken over by the
new contractor to perform
that activity, as in the case in the main proceedings, is not
sufficient to preclude the existence of
a transfer of an economic
entity which retains its identity, within the meaning of Directive
2001/23.
’
(paras
28-30)
[26]
In effect, the appellants’
argument, following upon this finding of the ECJ and similar
judgments (see, for example
Abler,
supra
, and
CLECE
SA v Valor
[2011] IRLR 251
(ECJ)), was that the absence of a transfer of tangible assets from
first appellant to respondent was inconsequential to the application
of s 197, given that the transfer of an organised group of appellants
human capital, constituting the majority of its employees
at
respondent, amounted to a transfer of an economic entity which
retained its identity which triggered the operation of s 197.
[27]
To the argument that the new
service provider would provide management and supervision of the
staff, albeit employed by respondent
as well as physical assets and
infrastructure needed to render the security service, the appellants
referred to the tender specification
document which stipulated the
following:
‘
The
security service provider will be required to assist UNISA with
management and supervisory services to ensure that the security
function at UNISA in Gauteng is effectively implemented, monitored
and sustained. It is compulsory that the security provider,
after perusal of the site specific detail, to provide UNISA with a
detail security plan, indication [sic] the proposed management
structure, equipment and processes which will be used to effectively
provide the required security service. This should form
part of
the tender response.
’
[28]
On this basis appellants
contended that the same economic activity, as was rendered by the
first and third appellants, was to continue
with largely the same
workforce in respect of the same premises and pursuant to the same
activities. In further support of this
submission, further reference
was made to the tender specification document in which the service
provider was required to provide
the following assets.
‘
All
the relevant equipment to render a professional security service must
be provided and maintained by the security service provider,
such as:
·
Quality
torches in working order.
·
All
the relevant registers, for example:
-
Occurrence
Book
-
Visitors
Book
-
Asset
control registers
-
Security
Incident report register (SR)
-
Post
Allocation sheets/forms
-
Information
Book.
And:
·
Provision
of two-way radios (repeaters and base stations were required) on each
site.
·
Provision
of guard monitoring systems (database and panic alarm) for site.
Electronic reports to be made available to the client
representative
on a daily basis.’
[29]
In the view of appellants, the
paucity of assets required, showed that it could not be contended
realistically, as had been suggested
by respondent, that the
provision of security services was an asset-intensive undertaking.
Once the majority of the employees previously
employed by the
appellants had become employees of respondent with the specific task
of ensuring security on the campuses of respondent,
there had been a
transfer of an economic entity which retained its identity and,
accordingly, which triggered the operation of
s197 of the LRA.
Evaluation
[30]
It again needs to be emphasised
that, from the jurisprudence which has engaged with the wording of
s197, the enquiry is a fact specific
one. Two central issues must be
borne in mind in the application of s197 to the facts placed before
this Court. In the first place,
unlike
Securitas
v ICTS Portugal, supra,
this case does not deal with the circumstances where contracting
entity A has terminated a contract concluded with an undertaking
for
the provision of security services at its facilities and then
concluded a new contract for the supply of those services with
independent entity, B which refuses to take on the employees of
entity A. In this case, owing to its particular facts, the respondent
was compelled through the intense political protest which it
encountered, to directly employ a group of security guards who had
previously been employed by first and third appellants. A
further issue, of which consideration must be taken, is that even
if
the court is prepared to interpret the shared services agreement in
the manner urged upon us by appellants, the court would
still be
required to answer the question as to whether what has taken place
was, in the express words of s197 “a transfer
of a business by
one employer to another employer as a going concern”. In other
words, could it be said that what occurred
in respect of respondent’s
conduct was that it was engaged in the transfer of a business to it
by appellants (or at least
part of a business) as a going concern?
[31]
In order to determine whether a
business is transferred as a going concern, as befits a
fact-intensive enquiry, the facts of this
case become crucial. The
business of both first and third appellants did not simply comprise
of a group of security guards who
were assigned to safeguard the
premises of respondent.
[32]
The model in which appellants
were critical players and, in terms of the agreement entered into,
between appellants and respondent,
included the following:
‘
The
Services will include, but not be limited to the following:
1.
The
Service Provider shall provide the University with high level access
control, security and patrol services in order to protect
and secure
the University’s staff, students, visitors, property, assets
and reputation.
2.
The
Service Provider shall provide a sufficient number of on-site
properly pre-trained, efficient and competent employees and
supervisors/managers
(hereinafter collectively referred to as its
“personnel”) in order to provide the required Services.
The number
and qualifications of personnel as well as the time and
premises where the Services must be rendered are set out in Annexure
“B”
attached hereto.
’
[33]
Significantly, when Mr Kruger
in his founding affidavit on behalf of first appellant described what
respondent required when it
sought to terminate its agreements with
first and third appellants, he stated as follows:
‘
Each
security service provider was asked to provide a breakdown of the
pricing associated with the remainder of the Agreement. The
breakdown
of the pricing included, amongst other things:
1.
Equipment
and operational costs, namely machine radios, guard monitoring
systems and an amount to take into account the depreciation
of
equipment;
2.
The
salaries of the security officers, including travel allowances;
3.
The
costs associated with providing the security officers with vehicles
including petrol and fuel;
4.
Administration
costs, including, amongst other things, bank charges, insurance and
licenses, stationary, rent, telephone; and
5.
The
costs associated with managing the live patrols and managing
nightshift operation (control room costs
).’
[34]
In his founding affidavit, Mr
Kruger described the shared service model as follows:
‘
The
insourced security officers will be making use of the same assets
which are presently used by iMvula to provide the same services.
In this regard, iMvula has placed a sophisticated guard patrol system
called “Bloodhound” at UNISA’s sites which
is
monitored by iMvula’s National Operations Control Room.
To ensure an effective transition of the security services,
and in
order to maintain the same quality of security services, UNISA will
need to make use of “Bloodhound”.
Hence, the
infrastructure that iMvula uses to discharge it obligations will pass
to UNISA and/or the shared services service provider.
’
[35]
It does not, on these papers,
appear to be the case that the costs of infrastructure and
administration admit of a description of
as
de
minimis
. Mr Kruger attached
a copy of an e-mail which had been received by respondent, setting
out an estimation of the pricing for the
remainder of the agreement
which included pricing for assets and administration costs. The value
as stated was R 11 040 000.00
per annum. See the e-mail of Mr S
Aubrie Deputy Director: Physical Security and Investigation Service
of respondent of 18 February
2016.
[36]
Unfortunately, the exact,
breakdown of the costs of the entire business of providing security
to respondent’s campuses was
never made clear in the papers or
in argument. What emerges however from this e-mail is that the
services which have been provided
by first appellant and third
appellant constituted more than the provision of security guards.
What was taken over by respondent
was a significant portion of those
guards previously employed by the appellants. What respondent then
sought to do, pursuant to
its shared services model, was described in
the answering affidavit deposed to by Dr Marchia Socikwa:
‘
I
reiterate, and wish to state this as clearly as possible, that UNISA
does not intend at any stage to take on the service itself,
or to
provide any part of the service itself. It does intend to offer
employment to a suitable number of security staff that
will be needed
to provide the service, but as is apparent from the terms of which it
proposes to appoint a new service provider,
all of the necessary
business infrastructure, including much of the work necessary to
roster and secure the performance of by UNISA
staff where necessary,
will be provided by the newly appointed service provider. There
will be no transfer of business infrastructure
from iMvula to UNISA,
from UNISA to a new service provider, or from iMvula to a new service
provider.
’
[37]
In short, what occurred was
that following its response to “fees must fall” by way of
the recommendations of the multi-stakeholder
task team, respondent
“took in” a range of people who had previously been
employed by the appellants as security guards
and entered into
employment contracts with them. At the same time, it did not seek to
run a security business, whether in whole
or in part; hence the
significance of the shared service agreement. The business of
providing security at the campuses of respondent
constituted more
than simply the existence of a group of guards patrolling the campus
without more; that is without management,
equipment or strategy with
regard to their responsible deployment. None of these tasks was taken
over by respondent.
[38]
It follows that, if the words
“transfer of a business as going concern” have to be
given justifiable meaning, it cannot,
in this case and on these
facts, be concluded that the transfer of a significant portion (but
not all) of the security guards without
more was the transfer of a
business as a going concern, so that once the “taking in”
of the security guards at the
workplace occurred, the business
without any outside party operated seamlessly. Apart from equipment,
if necessary the outside
party which had entered into the shared
service agreement would supply more guards. This arrangement cannot
be said to fall within
the meaning of a transfer of a business as a
going concern, as contemplated by s197 of the LRA.
[39]
For these reasons, therefore,
the appeal is dismissed with costs.
_____________
Davis
JA
I
agree
________________
Phatshoane
ADJP
I
agree
_______________
Murphy
AJA
APPEARANCES:
FOR
THE FIRST AND THIRD APPELLANTS: A Myburgh SC, F Boda SC, Adv R Itzkin
Instructed
by Stein Scop Attorneys
FOR
THE RESPONDENT: C Todd
Instructed
by Bowman Gilfillan Attorneys
[1]
2015 (6) BCLR 660 (CC).
[2]
2017 (1) BCLR 64 (CC).
[3]
2003 (3) SA 1
(CC) at para 56.
[4]
At para 39.
[5]
At para 39.
[6]
I have not canvassed the two minority
judgments in Rural Maintenance, neither of which have relevance to
the present dispute.
[7]
At para 36,
[8]
At para 37.
[9]
[2004] IRLR 168 (ECJ).
[10]
At para 36.