The status of employees transferred in terms of section 197 of the labour relations act
When a business is sold as a going concern, the Labour Relations Act (“The LRA”) provides that a contract of employment transfers automatically from the old to the new employer. The dual purpose of section 197 of the LRA is to facilitate commercial transactions and protect the security of employment of employees in the process. However, it is important to note that the new employer has an exercisable discretion to accept or…