When the Deal Closes: Your Rights as a South African Employee

South Africa employee rights business sale

South Africa is rich in natural resources, which means there are a lot of jobs out there. But, like anything else, jobs can be complicated. Businesses change hands, sometimes they struggle and need rescuing, and other times they get sold to new owners. If your company gets sold, it can be confusing. You might wonder, ‘What happens to my job? What are my rights?’ This article is here to break it down for you. We’ll explain what your options are when your company is sold to someone else, so you know what to expect and what you can do.

Where a business is sold as a going concern (a business that is assumed will meet its financial obligations when they fall due), said business will be transferred from one employer to another. This would encompass a complete transfer of all the aspects of the business, including the transfer of the employees to the new owner/ employer. As a result, the employer takes over all employees’ employment contracts and steps into the same employment conditions as held with the previous employer. However, the terms and conditions must be transferred as a whole and not merely a part thereof. An advantage of this is that the employees can transfer their years of service with the previous employer to the new employer. This allows for the benefits due to employees, as a result of their years of service to the previous employer, to remain in place instead of falling away.

Employees, subject to the sale of the business they are employed by, are not required to accept the new employer. They have the option to continue their employment relationship with the business or elect to terminate their employment relationship. Additionally, the employer may decide to restructure the business, which may result in the retrenchment of certain members of staff. However, the employer may not buy the business to retrench staff members. Should this occur, the advantages of section 197 of the Labour Relations Act will not be available to either party.

Another aspect which should be noted is that the employer has to take over all ongoing or existing disputes between the employees and the previous employer. This would include ongoing negotiations with parties such as trade unions. This is another advantageous aspect as matters would proceed more efficiently instead of starting afresh.

Should you be an employer considering the sale of your business or an employee subject to the sale of a business, please do not hesitate to contact us. We can assist you no matter what side of the sale you are on.

 

Saeedah Salie
saeedah@bbplaw.attorney
Associate

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