Western Cape Workers Association v Halgang Properties CC

The applicant trade union acted on behalf of two of its members, Ms Ivy Kona and Mr Lungile Bhusakhwe, who were employees of the respondent, Halgang Properties CC. On 24 June 1999, the employer sold its business of a mini-mall to Wembley Investment Pty Ltd, with transfer to occur on 29 September 1999. Between August and September 1999, meetings were held between the workers and Wembley representatives to discuss transfer of employment contracts. The workers were told their contracts would be transferred with recognition of years of service and same conditions, but they insisted on being paid for their service and remaining employed by the original employer. When the workers refused to accept employment with Wembley, the employer dismissed them for operational reasons on 20 September 1999. The Labour Court ordered reinstatement, but the Labour Appeal Court reversed this decision on the basis that Wembley should have been joined as a party since the business had transferred as a going concern. The applicant sought leave to appeal to the Constitutional Court.

• Whether the Constitutional Court should grant leave to appeal against the Labour Appeal Court's decision
• Whether reinstatement was reasonably practicable after the business had been transferred to a new owner as a going concern
• Whether Wembley Investment Pty Ltd should have been joined as a party to the proceedings seeking reinstatement
• Whether the decision of the Labour Appeal Court infringed the workers' constitutional right to fair labour practices
• The proper interpretation and application of section 197 of the Labour Relations Act dealing with transfers of businesses as going concerns
• The proper interpretation and application of section 193(2)(c) of the Labour Relations Act regarding when reinstatement is reasonably practicable

The application for leave to appeal was dismissed with no order as to costs.

Where a business has been transferred as a going concern under section 197 of the Labour Relations Act, and employees seek reinstatement following dismissal, it is not reasonably practicable for the original employer to reinstate or re-employ the workers within the meaning of section 193(2)(c) of the Labour Relations Act. The new owner (transferee) of the business must be joined as a party to any proceedings seeking a reinstatement order that would be binding on the new owner. An order for reinstatement cannot be granted against the original employer (transferor) alone when the business has been transferred and the employer no longer has the practical ability to reinstate the employees.

The Court noted that it was not necessary to express any opinion on the procedure contemplated in Success Panel Beaters & Service Centre CC v NUMSA and Another [2000] 6 BLLR 635 (LAC), which apparently sanctioned further proceedings against the transferee to seek a declarator that the transferee is bound by a reinstatement order made against the transferor. The Court also did not address whether the dismissal of the workers on 20 September 1999 had been substantively or procedurally unfair, as the Labour Appeal Court had found it unnecessary to consider this question in view of its conclusion on the joinder issue. The Court made reference to the fact that the applicant's application was out of time and that no application for condonation had been received, though it dealt with the matter on the merits in the interests of justice.

This case clarifies the procedural requirements for seeking reinstatement orders when a business has been transferred as a going concern under section 197 of the Labour Relations Act. It establishes that where a business has been transferred, the new owner must be joined as a party to proceedings seeking reinstatement, as the original employer can no longer practically reinstate employees. The case demonstrates the Constitutional Court's approach to determining whether it is in the interests of justice to grant leave to appeal, particularly where prospects of success are minimal. It also illustrates the interaction between constitutional labour rights and the practical realities of business transfers, affirming that reinstatement remedies must be adapted to changed circumstances.