Cristelo Marques and Others v Group Five Construction (Pty) Ltd (Under Supervision) and Others

Seven former employees of Group Five Construction (Pty) Ltd, which was under business rescue, were retrenched on 30 April 2019 for operational reasons. They were entitled to statutory severance pay in terms of section 41 of the Basic Conditions of Employment Act 75 of 1997. When payment was not forthcoming, they launched an urgent application in the Labour Court seeking an order compelling the business rescue practitioners to pay the severance amounts. The business rescue practitioners opposed the application on the grounds that it was not urgent and that section 133(1) of the Companies Act 71 of 2008 imposed a moratorium on legal proceedings against the company, which could not be uplifted by the Labour Court.

The application was dismissed. No order was made as to costs.

The case confirms that the business rescue moratorium in section 133(1) of the Companies Act applies to Labour Court proceedings, including claims arising from labour legislation. It reinforces that only the High Court has jurisdiction to grant leave to proceed against a company under business rescue, and clarifies the limits of the Labour Court’s jurisdiction in business rescue matters.