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Section 197 Transfer Agreement

by on Apr.12, 2021, under Uncategorized

In the absence of an agreement under Section 197 (6) of the EEA, the new employer is automatically replaced by the former employer immediately prior to the transfer, making the new employer liable and is linked to all oral or other employment contracts that exist immediately prior to the transfer. All existing employees distance themselves from the former employer and fall into the responsibility of the new employer without consultation, consent and/or agreement of the parties involved. All amounts owed to existing workers must be made public by the former employer and an assessment of the different amounts owed to workers should be agreed by the employers concerned. In addition, Section 197, paragraph 3, of the LRA states that a new employer cannot employ alternating workers on more favourable terms than those for which they were employed by the former employer. Although the arbitrator found that the workers were automatically moved to a new employer, the LAC found that the settlement contract was binding and that there was indeed an employer-employee relationship between the former employer and the worker. Basson J. accepted the ASA and rejected the fee application which stated that “Parliament`s intention with respect to Section 197 of the LRA would certainly not have been to grant workers a flat or unverified right to transfer their contracts from one employer to another.” In December 2010, the proposed amendments to the Labour Relations Act were published and amendments to Section 197 were proposed, providing for the dissolution of the word “by” by the word “de.” This would promote the so-called “second generation” UASA transfer argument. Unfortunately, for UASA, these were only amendments and the only recourse now was to go to the Constitutional Court. The content of the initial transaction, specifically whether outsourcing is a transaction as a current business and not an outsourced service delivery, remains important for future divestitures. If, from the outset, the outsourcing establishment did not offer the service, it cannot be ruled out that this service is part of the activity of the assignor. What is happening here is a simple work of work, nothing more, nothing less.

When the former employer (Fleet Africa) lost two large contracts, he and some of his employees began co-occupancy consultations on Section 189. At the same time, a dispute was raised as to whether some of their employees would change employers within the meaning of Section 197 of the LRA. While arbitration was still ongoing, the former employer entered into a settlement agreement with its employees, including Ms. Nijs, in which she had to agree to a voluntary austerity plan. The arbitrator then decided that the employees of the former employer were automatically transferred to the new employer within the meaning of Section 197.


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