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New LAC decision: employers take note!
Labour Bulletin | 22 October, 2009 | Hot Topics:
Dear Reader
The LAC pronounces on second generation outsourcing
The Labour Appeal Court (LAC) has decided that Section 197 of the Labour Relations Act (LRA) can apply where the original employer either takes back a previously outsourced service or passes it on to a new service provider.
On 9 October 2009, the LAC supported an interpretation linked to the purpose of Section 197(as opposed to a literal interpretation of the words) in its decision in Aviation Union of SA v South African Airways and others.
The Court said the Constitutional Court’s view (on the purposes of Section 197) states the common denominator between both is the continuation of employment of employees involved in the business (or service) that’s transferred as a going concern. Neither of those purposes covered job losses or prevented those employees from continuing to work (when they moved with the work) when their employer outsourced the work.
In the case above, SAA previously outsourced its infrastructure and support services departments to LGM. It then terminated its contract with LGM. The employees who moved from SAA to LGM would either transfer back to SAA or to another service provider the company might contract in the future.
This decision has far-reaching implications for employers!
If you engage in outsourcing, you’ll have to reassess your strategy if you wish to cancel your contract with one service provider in favour of another.
Until next month...
Susan Stelzner
Editor-in-chief
Labour Law for Managers Practical Handbook
Editors note
SarahJane Bosch
Labour Bulletin Editor
The Labour Bulletin team speaks to subscribers every week on landmark labour events and offer valuable and practical information from the Handbook, from questions and answers and from our experts that subscribers can use now to benefit their business.
