Lra Section 197

The act in section 197 thereof deals with the transfer of a contract of employment and defines.

Lra section 197. The effect of section 197 if a business or part thereof is transferred to another entity or person as a going concern the employees of the business being transferred must be taken over by the purchaser the new employer. In terms of section 197 of the labour relations act the lra the sale of a business as a going concern takes place subject to the provisions of the lra. The sale of a business as a going concern takes place subject to the provisions of the lra.

It is clear that should the factors discussed in this judgment be met a transfer of a going concern can be said to occur in outsourcing arrangements. This case reiterates and reasserts the nature and scope of application of section 197 of the lra. In the absence of any agreement concluded under section 197 6 of the lra the new employer will be automatically substituted into the place of the old employer making the new employer liable and bound by all employment agreements verbal or otherwise in existence immediately before the transfer.

Section 197 of the labour relations act deals with the transfer of a business and the rights of employees affected by such a transaction. The lra provides for the disclosure of certain information by the employer on matters relevant to the consultation. Section 197 of the labour relations act no 66 of 1995 lra was enacted to change the common law position with the effect that an automatic transfer of contracts of employment from the transferring employer previous employer to the acquiring employer new employer now takes place in the event that the whole or part of any business trade undertaking or service is transferred from the previous employer to the new employer as a going concern.

Section 197 of the labour relations act lra places heavy responsibilities on the employer who takes over the business or part thereof of another employer as a going concern. Section 197 of the lra states that the contracts of employment of the existing employees are automatically transferred to the new employer subject to the provisions of the section. Section 197 of the labour relations act deals with the transfer of a business and the rights of employees affected by such a transaction.