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

Tasima was responsible for the development, operation, management, control and maintenance of the electronic national traffic information system (eNaTIS) for almost 15 years. This was Tasima's sole business and all employees were dedicated solely to eNaTIS. On 9 November 2016, the Constitutional Court ordered Tasima to hand over and transfer the eNaTIS and services to the RTMC within 30 days. During negotiations for the transfer, RTMC confirmed in writing during February and March 2017 that section 197 of the LRA applies and that it would take over all of Tasima's employees on the same terms and conditions. On 5 April 2017, the transfer of eNaTIS occurred when RTMC took over Tasima's premises. However, RTMC subsequently reneged on its representations and refused to give effect to section 197 of the LRA. Steenkamp J declared on 25 May 2017 that the contracts of employment of the employees automatically transferred from Tasima to RTMC with effect from 5 April 2017, and ordered RTMC to pay the employees' salaries pending final determination. The Labour Appeal Court upheld this declaration on 21 December 2018, but amended the transfer date to 23 June 2015 and set aside the interim salary payment order. RTMC indicated it would appeal to the Constitutional Court. Tasima approached the Labour Court seeking enforcement of the LAC order pending any appeal, as Tasima had no business or income and could not pay the employees' salaries.

• Whether Tasima had proper authority to institute the proceedings
• Whether Tasima had locus standi to bring the application
• Whether exceptional circumstances exist to warrant enforcement of the LAC order pending appeal under section 18 of the Superior Courts Act
• Whether Tasima and the employees would suffer irreparable harm if the LAC order is not enforced pending appeal
• Whether the RTMC would suffer irreparable harm if the LAC order is enforced pending appeal

The Court ordered: (1) Paragraph 57.1 of the LAC order of 21 December 2018, read with paragraph 63.1 of the Labour Court order of 25 May 2017, operates and is extant until final determination of all leave to appeal applications and appeals; (2) RTMC is ordered to comply with the LAC order by taking transfer of the Fifth to Eighty Fourth Respondents (excluding those listed in annexure B) within 24 hours of the order being granted; (3) RTMC is ordered to pay Tasima's costs on a party and party scale, including the cost of one counsel.

The binding legal principles established are: (1) The proper procedure to challenge authority to litigate in motion proceedings is through Rule 7 of the Uniform Rules; absent such challenge, the institution of proceedings must be accepted as duly authorised, particularly where parties have a long history of litigation through the same attorneys; (2) Under section 18 of the Superior Courts Act, exceptional circumstances exist to warrant enforcement of a judgment pending appeal where: (a) a party has previously represented that a legal provision applies and later seeks to resile from that position; (b) the applicant is a special purpose vehicle with no continuing business or income; (c) delay in enforcement may render relief moot or academic; and (d) non-enforcement would undermine clear legislative intention; (3) Irreparable harm is established where employees dependent on monthly salaries face creditor action, eviction, credit damage, and jeopardy to their livelihoods during a potentially lengthy appeal process; (4) A respondent does not suffer irreparable harm from enforcing a section 197 transfer where: (a) the business is self-financing; (b) the respondent receives the benefit of employees' services in exchange for salary payments; and (c) the respondent had previously paid the salaries without demonstrated harm; (5) Affordability is irrelevant when section 197 of the LRA applies to require transfer of employees.

The Court observed that the relationship between the parties "turned into a litigation storm" and that "a narrative entitled 'War and No Peace' could be compiled based on the litigation history of the parties." The Court expressed its view that the points in limine raised by RTMC were "meritless" and "quite unnecessary," burdening both Tasima and the Court with lengthy arguments on urgent basis. The Court noted it was "unfortunate that the RTMC adopted this approach rather than deal with the merits of this application." The Court found it "astonishing" and "remarkable" that RTMC left unchallenged Tasima's allegation that RTMC had presented to various courts and Parliament that section 197 applies, only to later run a diametrically opposed version. The Court described RTMC's response regarding financial statements as "bizarre." The Court commented that "the end is unfortunately not yet in sight" regarding the litigation between the parties. On costs, the Court noted that while the rule that costs follow the result does not apply in labour matters, courts should strike a fair balance between not unduly discouraging parties from approaching the Labour Court and not allowing parties to bring cases that should not have been brought. The Court considered RTMC's conduct in reneging on its acceptance of section 197's applicability and raising meritless points in limine as relevant factors in awarding costs.

This case is significant for its application of section 18 of the Superior Courts Act in the labour law context, particularly in enforcing transfer of business orders under section 197 of the LRA pending appeal. It demonstrates the courts' willingness to enforce section 197 transfers where the new employer has previously acknowledged the applicability of the section and later attempted to resile from that position. The case provides guidance on what constitutes 'exceptional circumstances' under section 18, particularly where employees' livelihoods are at stake and the old employer is a special purpose vehicle with no continuing business or income. It reinforces that affordability is irrelevant when section 197 applies and that self-financing operations provide sufficient means to pay transferred employees. The case also clarifies the proper procedure for challenging authority to litigate (Rule 7) and confirms that old employers may litigate on behalf of transferred employees in section 197 cases where employees lack financial means.