Employees' rights are strongly enshrined in South African legislation.
In the past, before the amendment of section 197 of the Labour Relations Act (the “Act”), employees were left with little to nothing as a result of their dismissal due to the business being transferred as a going concern. As a result, these employees would find themselves in a position of unemployment.
Subsequent thereto, the amended section 197(2) of the Act, from its promulgation in 2002, now provides that if a transfer of a business (including the whole or a part of any business, trade, undertaking or service) by one employer (‘the old employer') to another employer ('the new employer') as a going concern takes place:
- the new employer will automatically be substituted in the place of the old employer in respect of all contracts of employment in existence immediately before the date of transfer; and
- all the rights and obligations between the old employer and an employee at the time of the transfer continue in force as if there had been rights and obligations between the new employer and the employee.
With that said, in curbing unemployment in South Africa, a dismissal, according to section 187(1)(g) of the Act, will automatically be unfair if a dismissal transpired due to a business transfer, or a reason related to a business transfer, as contemplated in section 197 of the Act, as mentioned above.