Section 133 of the Companies Act of 2008 places a general moratorium or suspension on all legal proceedings against a company currently under business rescue.
The Courts have confirmed that the moratorium is applicable to employment related disputes that are referred to the CCMA and the Labour Court. However, it is important to note that this Section in no way extinguishes the right that employees or their trade union may have to institute claims against the company.
It merely suspends any claims pending the rescue process of the company. It is also considered in the best interest of the employees to allow the company to see through the rescue process so that they may still remain economically active in society by retaining their jobs and not having the company immediately liquidated.
Another implication of this situation is that the business rescue practitioner will have to provide his written consent that the unfair dismissal proceedings may be commenced. Should a business rescue practitioner not agree to the Arbitration proceedings, one would have to approach the High Court for an Application to uplift the moratorium.
