Automated Summary
Key Facts
The application sought a declaratory order that Metsweding District Municipality became the employer of Nokeng's EMS staff from 1 April 2003. Nokeng terminated its EMS due to financial constraints, transferring assets to the Province, but Metsweding denied being the employer. The court dismissed the application, finding no agreement for a transfer of the EMS as a going concern under s 197 of the LRA.
Issues
Whether there has been a transfer of the Emergency Medical Services (EMS) as a going concern as contemplated in section 197 of the Labour Relations Act (LRA), including whether a written agreement was required and whether the transfer met the criteria of asset, staff, and operational continuity.
Holdings
- The court determined that the termination of Nokeng's EMS on 1 April 2003 did not constitute a transfer under the Labour Relations Act. The lack of a formal agreement, absence of operational continuity by Metsweding, and no staff integration were critical factors. The decision also addressed cost implications, noting disputes over reserved costs due to procedural issues.
- The court ruled that Metsweding District Municipality did not become the employer of Nokeng's EMS staff, as the transfer of the service as a going concern was not established. The judge highlighted the absence of a contractual agreement, operational EMS activity by Metsweding, and staff retention. Costs followed the result, with no order for the third and fourth respondents.
- The court dismissed the application for a declaratory order, finding that there was no transfer of the Emergency Medical Services (EMS) from Nokeng Municipality to Metsweding District Municipality as a going concern under section 197 of the Labour Relations Act. The court emphasized that no formal agreement existed, Metsweding did not operationalize the EMS, and there was no integration of assets or staff. Costs were awarded to the applicants, including reserved costs.
Remedies
- The application was dismissed with costs, including the reserved costs.
- No cost order was made regarding the third and fourth respondents.
Legal Principles
The court applied the principle of 'substance over form' in determining whether a transfer of the Emergency Medical Services (EMS) as a going concern occurred under section 197 of the Labour Relations Act. This principle emphasizes evaluating the actual circumstances and integration of the service, rather than relying solely on contractual agreements or formalities. The judgment references the Constitutional Court's interpretation in NEHAWU v University of Cape Town and the EC Business Transfers Directive, highlighting that a transfer must be assessed objectively based on factors like asset transfer, staff integration, and continuity of operations.
Precedent Name
- Oy LjikenneAB v Liskojarvi and Juntunen
- Viggosdottir v Islandspostur H F
- National Education Health and Workers Union v University of Cape Town and Others
- National Education Health Allied Workers Union v University of Cape Town and Others
Cited Statute
- Constitution of the Republic of South Africa
- Labour Relations Act
- Health Act
Judge Name
A A Landman
Passage Text
- The Constitutional Court ... held that 'the phrase 'going concern' is not defined in the LRA. It must therefore be given its ordinary meaning unless the context indicates otherwise. What is transferred must be a business in operation 'so that the business remains the same but in different hands.' Whether that has occurred is a matter of fact which must be determined objectively in the light of the circumstances of each transaction.'
- The facts set out above do not show that there has been a transfer of the EMS to Metsweding as a going concern. The assets have not been transferred to Metsweding. Metsweding is not conducting a fully operational EMS although it might contemplate doing so. Metsweding does not wish to employ Nokeng's EMS staff. There has been no integration of Nokeng's EMS with that of Metsweding (of whatever scale). On 1 April 2003 the EMS which was operated by Nokeng came to an end without there being a transfer of this service. The result is that Metsweding remains the employer of its EMS staff.
- In these judgments, the Court has set out criteria for determining whether there is a transfer within the meaning of Article 1(1) of the Directive. According to that case law, it is necessary to consider all the facts characterising the transaction in question, including the type of undertaking or business concerned, whether or not tangible assets, such as buildings and moveable property, or intangible assets such as patents or know-how are transferred, the value of the assets at the time of the transfer, whether or not most of the personnel is kept on by the new employer, whether or not customers are transferred, the degree of similarity between the activities carried out before and after the transfer and the period of any suspension of those activities.