LABOUR APPEAL COURT

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN

Case no: CA 11/2016

HIGH RUSTENBURG ESTATE (PTY) LTD                                                                Appellant

and

NEHAWU OBO J CORNELIUS AND 17 OTHERS                                       First Respondent

HIGH RUSTENBURG HYDRO (PTY) LTD                                               Second Respondent

Heard:           02 March 2017

Delivered:     23 March 2017

JUDGMENT

DAVIS JA

[Writer’s Summary]

[1] This is an appeal against the following order of the Labour Court on 10 February 2016:

‘The rights which the claimants had, following their unfair dismissal by Hydro, were rights which were transferred to appellant by virtue of s 197 of the Labour Relations Act 66 of 1995 (“the LRA”).

The writ of execution under case number C459/04 issued by the respondent, on behalf of the said members, was lawfully issued and the assets attached pursuant to such writ “may be sold in order to satisfy the claimants of the appellant’s members”.’

s 197 has an effect of trumping established principles relating to joinder.   Critical to the finding in Ngema that the new employer had to be joined to the proceedings was that, in Ngema, the disputed issue related to reinstatement based on s 193 (2) of the LRA which provides for circumstances where a court may refuse to reinstate or reemploy the employees in question. This Court found that the new employer, at the very least, was entitled to be heard on the specific question of relief. Thus, “the appellants proper cause of action should therefore be to ensure that the second respondent (new employer) was joined to the proceedings so that it could be heard on a matter in which it had a direct or substantial interest namely the appropriate relief”. (para 15)

[18] In my view, this case is distinguishable from the

present dispute.   The present dispute turns on a different question, namely whether a substitution of an arbitration award made after the transfer of the business from an old employer to a new employer binds the new employer in that the award is deemed to have taken effect at the very least from the date on which it was made, albeit incorrectly, given the successful review decision by the Labour Court which substituted the correct order for the incorrect one. 

[19] It cannot be that the right which the employees hold over a new employer, pursuant to a transfer of an undertaking as a going concern, depends on the stage of the appeal or review at which the litigation finds itself at the point of transfer. The wording of the section is clear, an arbitration award that can bind the old employer immediately before the date of transfer in respect of the employees to be transferred binds the new employer. 

[20] The arbitration award must bind the old employer in the circumstances of this dispute because all that has occurred is that the Labour Court substituted a correct award, in its view, for the incorrect award which had previously been made. That the Labour Court has substituted the award does not detract from the conclusion that this was an award which bound the old employer immediately before the date of transfer because the substituted award must be deemed to take effect from that date.  

[22] As the order or the Labour Court was that s 197 (5) applies to an arbitration award which was reversed by the Labour Court but only after the transfer of the relevant undertaking had taken place, it is that order which is the subject of this appeal.   That order and not the issue of non joinder constituted the scope of the stated case.