Fleet Africa (Pty) Ltd v Nijs

Fleet Africa (Pty) Ltd managed the City of Johannesburg’s transport fleet under an outsourcing contract. Erica Nijs, originally employed by the City, had transferred to Fleet Africa in 2001 under s197 of the Labour Relations Act 66 of 1995 (LRA). When the outsourcing contract terminated on 29 February 2012, a dispute arose between Fleet Africa and the City as to whether employees should transfer back to the City under s197. While this dispute was referred to private arbitration, Fleet Africa initiated a conditional retrenchment process under s189A of the LRA and offered voluntary retrenchment packages to certain employees. Nijs accepted and signed a voluntary retrenchment settlement agreement in May 2012. Shortly thereafter, the arbitrator ruled that s197 applied and that affected employees, including Nijs, transferred automatically to the City with effect from 1 March 2012. Fleet Africa then repudiated the settlement agreement, contending it was not binding because Nijs had transferred to the City. Nijs approached the Labour Court to have the settlement agreement made an order of court.

The appeal was upheld and the Labour Court’s order making the settlement agreement an order of court was set aside.

The case clarifies the effect of a s197 transfer on settlement agreements and the enforcement jurisdiction of the Labour Court. It confirms that once a s197 transfer occurs, the old employer lacks capacity to settle employment disputes with transferred employees, and that only settlements resolving an actual or alleged dispute capable of referral under the LRA may be made orders of court.