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Aviation Union of South Africa obo Barnes & Others / SAA Pty Ltd & Others

The Labour Appeal Court held that s197 of the LRA applies to second generation outsourcing.

Q: What is second generation outsourcing?
A: A Company cancels an initial outsourcing agreement only to conclude another with a 3rd party.

Q: Must a second generation outsourcing contract comply with s 197 of the LRA?
A: Yes

Q: What is s 197 of the LRA about?
A: When an old employer transfers its business as a going concern to a new employer, the employees are automatically transferred on same or similar terms and conditions of employment.

Please be advised that a blunder on the part of the new or old employer in terms of a section 197 transfer could result in an award against both employers of two years’ compensation!


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