Western Cape Workers Association v Halgang Properties CC

The applicant trade union acted on behalf of two employees who were employed by Halgang Properties CC. Halgang sold its mini-mall business as a going concern to Wembley Investment (Pty) Ltd, with transfer effective on 29 September 1999. Prior to transfer, discussions took place about transferring the employees’ contracts to Wembley on the same terms, but with new contracts. The employees refused, demanding payment for past service and continued employment by Halgang. Halgang then retrenched them for operational requirements arising from the sale of the business. The Labour Court found the dismissals unfair and ordered reinstatement. On appeal, the Labour Appeal Court overturned this on the basis that the business had transferred as a going concern under section 197 of the Labour Relations Act and Wembley had not been joined, making reinstatement impracticable. The union sought leave to appeal to the Constitutional Court.

The application for leave to appeal was dismissed. No order as to costs was made.

The case confirms the procedural and substantive consequences of a transfer of a business as a going concern under section 197 of the Labour Relations Act, particularly that reinstatement against the old employer is not competent once transfer has occurred. It also affirms the importance of joinder of the transferee employer when relief is sought that would bind it, and clarifies the application of section 193(2)(c) regarding the impracticability of reinstatement.