Road Traffic Management Corporation v Tasima (Pty) Ltd and Others

In 2001 the Department of Transport concluded a turnkey agreement with Tasima (Pty) Ltd for the development, operation and maintenance of the eNaTIS system, a national traffic information system required under the National Road Traffic Act 43 of 1996. The contract was extended multiple times and became the subject of extensive litigation concerning its validity and termination. Following the termination of Tasima’s role and the transfer of eNaTIS functions to the Road Traffic Management Corporation (RTMC), disputes arose regarding the transfer of Tasima employees to the RTMC. Tasima contended that the termination and takeover constituted a transfer of a business as a going concern in terms of section 197 of the Labour Relations Act 66 of 1995, requiring automatic transfer of its employees. The RTMC disputed this and appealed against Labour Court orders that favoured Tasima and the affected employees.

The appeals by the Road Traffic Management Corporation were dismissed. The Labour Court’s orders confirming the application of section 197 of the Labour Relations Act and the automatic transfer of Tasima’s employees to the RTMC were upheld.

The case is significant for reaffirming the purposive and substance-based interpretation of section 197 of the Labour Relations Act, particularly in the context of state takeovers of outsourced or contracted public functions. It underscores that organs of state are not exempt from labour law obligations when assuming control of an existing business or service.