Section 197 Lra
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Section 197 of the labour relations act deals with the transfer of a business and the rights of employees affected by such a transaction.
Section 197 lra. The act in section 197 thereof deals with the transfer of a contract of employment and defines. To hold otherwise would allow for an abuse of section 197 of the lra. 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 respondent had become the employer of the employees previously employed in its emergency services department. Section 197 of the labour relations act deals with the transfer of a business and the rights of employees affected by such a transaction. 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.
The scope of section 197 has been the subject of extensive case law due to the harsh penalties attached to the dismissal of an employee just before during or after a section 197 transfer of business. Importance of the case this case reiterates and reasserts the nature and scope of application of section 197 of the lra. Business to include the whole or part of any business trade undertaking or service.
Section 197 6 read with sub section 2 and 7 of the lra however gives the new and old employer scope to enter into a termination agreement or no fault termination agreement with the existing employees. 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. This section forces the new employer to take over all the labour related obligations of the old employer.
The sale of a business as a going concern takes place subject to the provisions of the lra.
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