UASA went to the labour tribunal and asked the Tribunal to explain that the appointment of a new service provider to SAA would constitute a transfer of LGM`s activities and that, as such, the personnel initially transferred should be transferred to the new service provider. The ASA objected to the transfer of the so-called “second generation” and argued that a transfer in the form of Section 197 meant “from one employer to another,” with the emphasis on the word “pass.” SAA was no longer the employer and LGM was not the party that was outsourced, leaving LGM free to retrench employees based on their business requirements. In 2009, the Labour Appeal Court contradicted Justice Basson and adopted a broader interpretation of the word “through.” The LAC considered that the word “von” could be interpreted as “de.” This would mean that, as part of the agreement between the ASA and LGM after the expiry of the outsourcing agreement between them, a transfer will be made in relation to Section 197. It would be impossible for LGM to continue the transaction after the termination of the contract. The Constitutional Court therefore stated that the abrogation of the agreement between SAA and LGM required LGM to transfer a business as a current undertaking within the meaning of Sections 197 (1) and 197 (2) of labour relations Act 66 of 1995. The conditions outlined above do not imply that the new employer, in agreement with the worker, must not change certain conditions of employment. However, the emphasis is on “consensus” with the transferred employee. In some cases, compliance with Section 197 must be strictly respected, especially in the following circumstances: – employers should understand that they are bound by the signing of transaction agreements under the agreement. As a general rule, a company (Company A) would relocate part of its business to another company (Company B). Under these conditions, Section 197 of the Industrial Relations Act may apply if the business has been sold as a current business.
Under the definition of a transfer, the business was transferred from one employer (hereafter the former employer) to another employer (hereafter referred to as the “new employer”). The transaction agreement was an agreement provided for in Section 158 (1) (c) of the LRA, “a written agreement to settle a dispute whereby a party has the right to go to an arbitration tribunal or the labour tribunal.” The only question was whether there was a dispute between the parties when it was signed. At the time, there had been a long dispute between the parties. Arbitration and consultation procedures had a common objective to resolve the same dispute. The Court also noted that Section 197 provides that the new employer automatically replaces the former employer, unless it is something else in paragraph 197, paragraph 6, between the former and/or new employer, on the one hand, and a person or organization within the meaning of section 189, paragraph 1. The terms “unless otherwise agreed” provides that, with respect to Section 197, the parties to the dispute may resolve them by a transaction agreement. The dispute between the former employer and the worker was closed by a full and final settlement of the rights arising, among other things, from a right to transfer within the meaning of Section 197. When a part of a business is transferred, this could, under certain conditions, be considered a takeover of an ongoing business. In the case of Crossroads Distribution (Pty) Ltd t/a Jowell`s Transport vs Clover SA (2008.6 BLLR 565), Clover had a transport and logistics contract for Woodlands Dairy. When Clover sold its contract with Woodlands Dairy, Woodlands awarded the contract to another company called Crossroads. Crossroads wanted all Of Clover`s transportation and logistics employees to be transferred to the work area because the transfer of the Clover contract to Crossroads was a buyout of an ongoing group, but Clover wanted to retain the services of some of them.