CHAPTER EIGHT UNFAIR DISMISSAL AND UNFAIR LABOUR PRACTICE (ss 185-197B)

[Heading substituted by s. 39 of Act No. 12 of 2002.]

185. Right not to be unfairly dismissed or subjected to unfair labour practice
Every employee has the right not to be-

unfairly dismissed; and

subjected to unfair labour practice.

[S. 185 substituted by s. 40 of Act No. 12 of 2002.]

186. Meaning of dismissal and unfair labour practice

Dismissal" means that-

an employer has terminated employment with or without notice;

an employee employed in terms of a fixed term contract of employment reasonably expected the employer --

to renew a fixed term contract of employment on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it; or

to retain the employee in employment on an indefinite basis but otherwise on the same or similar terms as the fixed term contract, but the employer offered to retain the employee on less favourable terms, or did not offer to retain the employee.

an employer refused to allow an employee to resume work after she-

took maternity leave in terms of any law, collective agreement or her contract of employment; or

. . . . . .

[Sub-para. (ii) deleted by s. 95 (4) of Act No. 75 of 1997.]

an employer who dismissed a number of employees for the same or similar reasons has offered to re-employ one or more of them but has refused to re-employ another; or

an employee terminated employment with or without notice because the employer made continued employment intolerable for the employee; or

an employee terminated employment with or without notice because the new employer, after a transfer in terms of section 197 or section 197A, provided the employee with conditions or circumstances at work that are substantially less favourable to the employee than those provided by the old employer.

[Para. (f) added by s. 41 (b) of Act No. 12 of 2002.]

Unfair labour practice" means any unfair act or omission that arises between an employer and an employee involving-

unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee;

the unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee;

a failure or refusal by an employer to reinstate or re-employ a former employee in terms of any agreement; and

an occupational detriment, other than dismissal, in contravention of the Protected Disclosures Act, 2000 (Act No. 26 of 2000), on account of the employee having made a protected disclosure defined in that Act.

[S. 186 amended by s. 41 (a) of Act No. 12 of 2002. Sub-s. (2) added by s. 41 (c) of Act No. 12 of 2002.]

187. Automatically unfair dismissals.

A dismissal is automatically unfair if the employer, in dismissing the employee, acts contrary to section 5* or, if the reason for the dismissal is-

*Section 5 confers protections relating to the right to freedom of association and on members or workplace forums.

that the employee participated in or supported, or indicated an intention to participate in or support, a strike or protest action that complies with the provisions of Chapter IV*

*Chapter IV deals with industrial action and conduct in support of industrial action. Section 67 (4) and (5) provide-

"(4) An employer may not dismiss an employee for participating in a protected strike or for any conduct in contemplation or in furtherance of a protected strike.
(5) Subsection (4) does not preclude an employer from fairly dismissing an employee in compliance with the provisions of Chapter VIII for reason related to the employee's conduct during the strike, or for a reason based on the employer's operational requirements.
Section 77 (3) provides-
"a person who takes part in protest action or in any conduct in contemplation or in furtherance of protest action that complies with subsection (1), enjoys the protections conferred by section 67."

that the employee refused, or indicated an intention to refuse, to do any work normally done by an employee who at the time was taking part in a strike that complies with the provisions of Chapter IV or was locked out, unless that work is necessary to prevent an actual danger to life, personal safety or health;

a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer;

that the employee took action, or indicated an intention to take action, against the employer by-

exercising any right conferred by this Act; or

participating in any proceedings in terms of this Act;

the employee's pregnancy, intended pregnancy, or any reason related to her pregnancy;

that the employer unfairly discriminated against an employee, directly or indirectly, on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility;

a transfer, or a reason related to a transfer, contemplated in section 197 or 197A; or

[Para. (g) added by s. 42 of Act No. 12 of 2002.]

a contravention of the Protected Disclosures Act, 2000, by the employer, on account of an employee having made a protected disclosure defined in that Act.
[Para. (h) added by s. 42 of Act No. 12 of 2002.]

Despite subsection (1) ( f )-

a dismissal may be fair if the reason for dismissal is based on an inherent requirement of the particular job;

a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.

188. Other unfair dismissals.

A dismissal that is not automatically unfair, is unfair if the employer fails to prove-

that the reason for dismissal is a fair reason-

related to the employee's conduct or capacity; or

based on the employer's operational requirements; and

that the dismissal was effected in accordance with a fair procedure.

Any person considering whether or not the reason for dismissal is a fair reason or whether or not the dismissal was effected in accordance with a fair procedure must take into account any relevant code of good practice issued in terms of this Act.*

*See schedule 8, the Code of Good Practice: Dismissal

188A. Inquiry by arbitrator

An employer may, with the consent of the employee or in accordance with a collective agreement, request a council, an accredited agency or the Commission to appoint an arbitrator to conduct an inquiry into allegations about the conduct or capacity of that employee.

The request must be in the prescribed form.

The council, accredited agency or the Commission must appoint an arbitrator on receipt of-

payment by the employer of the prescribed fee; and

the employee's written consent to the inquiry.



An employee may only consent to an inquiry in terms of this section after the employee has been advised of the allegation referred to in subsection (1)

Despite any other provision in this Act, an employee earning more than the amount determined by the Minister in terms of section 6 (3) of the Basic Conditions of Employment Act at the time, may agree in a contract of employment to the holding of an inquiry in terms of this section.

In any inquiry in terms of this section a party to the dispute may appear in person or be represented only by-

a co-employee;

a director or employee, if the party is a juristic person;

an office bearer or official of that party's registered trade union or registered employers' organisation; or

a legal practitioner, on agreement between the parties or if permitted by the arbitrator in accordance with the rules regulating representation at an arbitration before the Commission..

Section 138, read with the changes required by the context, applies to any inquiry in terms of this section.

An arbitrator appointed in terms of this section has all the powers conferred on a commissioner by section 142 (1) (a) to (e), (2) and (7) to (9), read with the changes required by the context, and any reference in that section to the director for the purpose of this section, must be read as a reference to-

the secretary of the council, if the inquiry is held under the auspices of the council;

the director of the accredited agency, if the inquiry is held under the auspices of an accredited agency.

The ruling of the arbitrator in an inquiry has the same status as an arbitration award, and the provisions of sections 143 to 146 apply with the changes required by the context to any such ruling.

An arbitrator conducting an inquiry in terms of this section must, in the light of the evidence presented and by reference to the criteria of fairness in the Act, rule as to what action, if any, may be taken against the employee.

A private agency may only appoint an arbitrator to conduct an inquiry in terms of this section if it is accredited for arbitration by the Commission.

A council may only appoint an arbitrator to conduct an inquiry in terms of this section in respect of which the in respect of which the employer or the employee is not a party to the council, if the council has been accredited for arbitration by the Commission.

[S. 188A inserted by s. 43 of Act No. 12 of 2002.]

Despite subsection (1), if an employee alleges in good faith that the holding of an inquiry contravenes the Protected Disclosures Act, 2000 (Act No. 26 of 2000), that employee or the employer may require that an inquiry be conducted in terms of this section into allegations by the employer into the conduct or capacity of the employee.

The holding of an inquiry by a arbitrator in terms of this section and the suspension of an employee on full pay pending the outcome of such an inquiry do not constitute an occupational detriment as contemplated in the Protected Disclosures Act, 2000 (Act No. 26 of 2000).

189. Dismissals based on operational requirements.

When an employer contemplates dismissing one or more employees for reasons based on the employer's operational requirements, the employer must consult-

any person whom the employer is required to consult in terms of a collective agreement;

if there is no collective agreement that requires consultation-

a workplace forum, if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum; and

any registered trade union whose members are likely to be affected by the proposed dismissals;

if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals; or

if there is no such trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose.

The employer and the other consulting parties must in the consultation envisaged by subsections (1) and (3) engage in a meaningful joint consensus-seeking process and attempt to reach consensus on-

appropriate measures-

to avoid the dismissals;

to minimise the number of dismissals;

to change the timing of the dismissals; and

to mitigate the adverse effects of the dismissals;

the method for selecting the employees to be dismissed; and

the severance pay for dismissed employees.

The employer must issue a written notice inviting the other consulting party to consult with it and disclose in writing all relevant information, including, but not limited to-

the reasons for the proposed dismissals;

the alternatives that the employer considered before proposing the dismissals, and the reasons for rejecting each of those alternatives;

the number of employees likely to be affected and the job categories in which they are employed;

the proposed method for selecting which employees to dismiss;

the time when, or the period during which, the dismissals are likely to take effect;

the severance pay proposed;

any assistance that the employer proposes to offer to the employees likely to be dismissed;

the possibility of the future re-employment of the employees who are dismissed;

the number of employees employed by the employer; and

the number of employees that the employer has dismissed for reasons based on its operational requirements in the preceding 12 months.

The provisions of section 16 apply, read with the changes required by the context, to the disclosure of information in terms of subsection (3).

In any dispute in which an arbitrator or the Labour Court is required to decide whether or not any information is relevant, the onus is on the employer to prove that any information that it has refused to disclose is not relevant for the purposes for which it is sought.

The employer must allow the other consulting party an opportunity during consultation to make representations about any matter dealt with in subsections (2), (3) and (4) as well as any other matter relating to the proposed dismissals.



The employer must consider and respond to the representations made by the other consulting party and, if the employer does not agree with them, the employer must state the reasons for disagreeing.

If any representation is made in writing the employer must respond in writing.

The employer must select the employees to be dismissed according to selection criteria-

that have been agreed to by the consulting parties; or

if no criteria have been agreed, criteria that are fair and objective.

[S. 189 substituted by s. 44 of Act No. 12 of 2002.]

189A. Dismissals based on operational requirements by employers with more than 50 employees

This section applies to employers employing more than 50 employees if-

the employer contemplates dismissing by reason of the employer's operational requirements, at least-

10 employees, if the employer employs up to 200 employees;

20 employees, if the employer employs more than 200, but not more than 300, employees;

30 employees, if the employer employs more than 300, but not more than 400, employees;

40 employees, if the employer employs more than 400, but not more than 500, employees; or

50 employees, if the employer employs more than 500 employees; or

the number of employees that the employer contemplates dismissing together with the number of employees that have been dismissed by reason of the employer's operational requirements in the 12 months prior to the employer issuing a notice in terms of section 189 (3), is equal to or exceeds the relevant number specified in paragraph (a).

In respect of any dismissal covered by this section-

an employer must give notice of termination of employment in accordance with the provisions of this section;

despite section 65 (1) (c), an employee may participate in a strike and an employer may lock out in accordance with the provisions of this section;

the consulting parties may agree to vary the time periods for facilitation or consultation.

a consulting party may not unreasonably refuse to extend the period for consultation if such an extension is required to ensure meaningful consultation.

The Commission must appoint a facilitator in terms of any regulations made under subsection (6) to assist the parties engaged in consultations if-

the employer has in its notice in terms of section 189 (3) requested facilitation; or

consulting parties representing the majority of employees whom the employer contemplates dismissing have requested facilitation and have notified the Commission within 15 days of the notice.

This section does not prevent an agreement to appoint a facilitator in circumstances not contemplated in subsection (3).

If a facilitator is appointed in terms of subsection (3) or (4) the facilitation must be conducted in terms of any regulations made by the Minister under subsection (6) for the conduct of such facilitations.

The Minister, after consulting NEDLAC and the Commission, may make regulations relating to-

the time period, and the variation of time periods, for facilitation;

the powers and duties of facilitators;

the circumstances in which the Commission may charge a fee for appointing a facilitator and the amount of the fee; and

any other matter necessary for the conduct of facilitations.

If a facilitator is appointed in terms of subsection (3) or (4), and 60 days have elapsed from the date on which notice was given in terms of section 189 (3)-

the employer may give notice to terminate the contracts of employment in accordance with section 37 (1) of the Basic Conditions of Employment Act; and

a registered trade union or the employees who have received notice of termination may either-

give notice of a strike in terms of section 64 (1) (b) or (d); or

refer a dispute concerning whether there is a fair reason for the dismissal to the Labour Court in terms of section 191 (11).

If a facilitator is not appointed-

a party may not refer a dispute to a council or the Commission unless a period of 30 days has lapsed from the date on which notice was given in terms of section 189 (3); and

once the periods mentioned in section 64 (1 ) (a) have elapsed-

the employer may give notice to terminate the contracts of employment in accordance with section 37 (1) of the Basic Conditions of Employment Act; and

a registered trade union or the employees who have received notice of termination may-

(aa) give notice of a strike in terms of section 64 (1) (b) or (d); or
(bb) refer a dispute concerning whether there is a fair reason for the dismissal to the Labour Court in terms of section 191 (11).

Notice of the commencement of a strike may be given if the employer dismisses or gives notice of dismissal before the expiry of the periods referred to in subsections (7) (a) or (8) (b) (i).

A consulting party may not-

give notice of a strike in terms of this section in respect of a dismissal, if it has referred a dispute concerning whether there is a fair reason for that dismissal to the Labour Court;

refer a dispute about whether there is a fair reason for a dismissal to the Labour Court, if it has given notice of a strike in terms of this section in respect of that dismissal.

If a trade union gives notice of a strike in terms of this section-

no member of that trade union, and no employee to whom a collective agreement concluded by that trade union dealing with consultation or facilitation in respect of dismissals by reason of the employers' operational requirements has been extended in terms of section 23 (1) (d), may refer a dispute concerning whether there is a fair reason for dismissal to the Labour Court;

any referral to the Labour Court contemplated by subparagraph (i) that has been made, is deemed to be withdrawn.

The following provisions of Chapter IV apply to any strike or lock-out in terms of this section:

Section 64 (1) and (3) (a) to (d), except that-

section 64 (1) (a) does not apply if a facilitator is appointed in terms of this section;

an employer may only lock out in respect of a dispute in which a strike notice has been issued;

subsection (2) (a), section 65 (1) and (3);

section 66 except that written notice of any proposed secondary strike must be given at least 14 days prior to the commencement of the strike;

sections 67, 68, 69 and 76.

During the 14-day period referred to in subsection (11) (c), the director must, if requested by an employer who has received notice of any intended secondary strike, appoint a commissioner to attempt to resolve any dispute, between the employer and the party who gave the notice, through conciliation.

A request to appoint a commissioner or the appointment of a commissioner in terms of paragraph (a) does not affect the right of employees to strike on the expiry of the 14-day period.

If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application for an order-

compelling the employer to comply with a fair procedure;

interdicting or restraining the employer from dismissing an employee prior to complying with a fair procedure;

directing the employer to reinstate an employee until it has complied with a fair procedure;

make an award of compensation, if an order in terms of paragraphs (a) to (c) is not appropriate.

Subject to this section, the Labour Court may make any appropriate order referred to in section 158 (1) (a).

An award of compensation made to an employee in terms of subsection (14) must comply with section 194.

The Labour Court may not make an order in respect of any matter concerning the disclosure of information in terms of section 189 (4) that has been the subject of an arbitration award in terms of section 16.



An application in terms of subsection (13) must be brought not later than 30 days after the employer has given notice to terminate the employee's services or, if notice is not given, the date on which the employees are dismissed.

The Labour Court may, on good cause shown condone a failure to comply with the time limit mentioned in paragraph (a).

The Labour Court may not adjudicate a dispute about the procedural fairness of a dismissal based on the employer's operational requirements in any dispute referred to it in terms of section 191 (5) (b) (ii).

. . .

For the purposes of this section, an "employer" in the public service is the executing authority of a national department, provincial administration, provincial department or organisational component contemplated in section 7 (2) of the Public Service Act, 1994 (promulgated by Proclamation No. 103 of 1994).

[S. 189A inserted by s. 45 of Act No. 12 of 2002.]

190. Date of dismissal

The date of dismissal is the earlier of--

the date on which the contract of employment terminated; or

the date on which the employee left the service of the employer.

Despite subsection (1)-

if an employer has offered to renew on less favourable terms, or has failed to renew a fixed-term contract of employment, the date of dismissal is the date on which the employer offered the less favourable terms or the date the employer notified the employee of the intention not to renew the contract;

if the employer refused to allow an employee to resume work, the date of dismissal is the date on which the employer first refused to allow the employee to resume work;

if an employer refused to re-instate or re-employ the employee, the date of dismissal is the date on which the employer first refused to re-instate or re-employ that employee.

if an employer terminates an employee's employment on notice, the date of dismissal is the date on which the notice expires or, if it is an earlier date, the date on which the employee is paid all outstanding salary.

191. Disputes about unfair dismissals and unfair labour practices*
*See flow diagram Nos. 10, 11, 12 and 13 in Schedule 4.

If there is a dispute about the fairness of a dismissal, or a dispute about an unfair labour practice, the dismissed employee or the employee alleging the unfair labour practice may refer the dispute in writing to-

a council, if the parties to the dispute fall within the registered scope of that council; or

the Commission, if no council has jurisdiction.

A referral in terms of paragraph (a) must be made within-

30 days of the date of a dismissal or, if it is a later date, within 30 days of the employer making a final decision to dismiss or uphold the dismissal;

90 days of the date of the act or omission which allegedly constitutes the unfair labour practice or, if it is a later date, within 90 days of the date on which the employee became aware of the act or occurrence.

[Sub-s. (1) substituted by s. 46 (b) of Act 12 of 2002.]

If the employee shows good cause at any time, the council or the Commission may permit the employee to refer the dispute after the relevant time limit in subsection (1) has expired.

[Sub-s. (2) substituted by s. 46 (c) of Act 12 of 2002.]

2A. Subject to subsections (1) and (2), an employee whose contract of employment is terminated by notice, may refer the dispute to the council or the Commission once the employee has received that notice.

[Sub-s. (2A) inserted by s. 46 (d) of Act 12 of 2002.]

The employee must satisfy the council or the Commission that a copy of the referral has been served on the employer.

The council or the Commission must attempt to resolve the dispute through conciliation.

If a council or a commissioner has certified that the dispute remains unresolved, or if 30 days or any further period as agreed between the parties have expired since the council or the Commission received the referral and the dispute remains unresolved-

the council or the Commission must arbitrate the dispute at the request of the employee if-

the employee has alleged that the reason for dismissal is related to the employee's conduct or capacity, unless paragraph (b) (iii) applies;

the employee has alleged that the reason for dismissal is that the employer made continued employment intolerable or the employer provided the employee with substantially less favourable conditions or circumstances at work after a transfer in terms of section 197 or 197A, unless the employee alleges that the contract of employment was terminated for a reason contemplated in section 187;

[Sub-para. (ii) substituted by s. 46 (e) of Act 12 of 2002.]

the employee does not know the reason for dismissal; or

the dispute concerns an unfair labour practice; or

[Sub-para. (iv) added by s. 46 (f) of Act No. 12 of 2002.]

the employee may refer the dispute to the Labour Court for adjudication if the employee has alleged that the reason for dismissal is-

automatically unfair;

based on the employer's operational requirements;

the employees participation in a strike that does not comply with the provisions of Chapter IV; or

because the employee refused to join, was refused membership of or was expelled from a trade union party to a closed shop agreement.

5A. Despite any other provision in the Act, the council or Commission must commence the arbitration immediately after certifying that the dispute remains unresolved if the dispute concerns-

the dismissal of an employee for any reason relating to probation;

any unfair labour practice relating to probation;

any other dispute contemplated in subsection (5) (a) in respect of which no party has objected to the matter being dealt with in terms of this subsection.

[Sub-s. (5A) inserted by s. 46 (g) of Act 12 of 2002.]

Despite subsection (5) (a) or (5A), the director must refer the dispute to the Labour Court, if the director decides, on application by any party to the dispute, that to be appropriate after considering-

the reason for dismissal;

whether there are questions of law raised by the dispute;

the complexity of the dispute;

whether there are conflicting arbitration awards that need to be resolved;

the public interest.

[Sub-s. (6) substituted by s. 46 (h) of Act 12 of 2002.]

When considering whether the dispute should be referred to the Labour Court, the director must give the parties to the dispute and the commissioner who attempted to conciliate the dispute, an opportunity to make representations

The director must notify the parties of the decision and refer the dispute-

to the Commission for arbitration; or

to the Labour Court for adjudication.

The director's decision is final and binding.

No person may apply to any court of law to review the director's decision until the dispute has been arbitrated or adjudicated, as the case may be.

The referral, in terms of subsection (5) (b), of a dispute to the Labour Court for adjudication, must be made within 90 days after the council or (as the case may be) the commissioner has certified that the dispute remains unresolved.

However, the Labour Court may condone non-observance of that time-frame on good cause shown.

[Sub-s. (11) added by s. 25 of Act No. 127 of 1998.]

An employee who is dismissed by reason of the employer's operational requirements may elect to refer the dispute either to arbitration or to the Labour Court if -

the employer followed a consultation procedure that applied to that employee only, irrespective of whether that procedure complied with section 189;

the employer's operational requirements lead to the dismissal of that employee only; or

the employer employs less than ten employees, irrespective of the number of employees who are dismissed.

[Sub-s. (12) added by s. 46 (i) of Act No. 12 of 2002.]

An employee may refer a dispute concerning an alleged unfair labour practice to the Labour Court for adjudication if the employee has alleged that the employee has been subjected to an occupational detriment by the employer in contravention of section 3 of the Protected Disclosures Act, 2000, for having made a protected disclosure defined in that Act.

A referral in terms of paragraph (a) is deemed to be made in terms of subsection (5) (b).

[S. 191 amended by s. 46 (a) of Act 12 of 2002. Sub-s. (13) added by s. 46 (i) of Act No. 12 of 2002.]

192. Onus in dismissal disputes

In any proceedings concerning any dismissal, the employee must establish the existence of the dismissal.

If the existence of the dismissal is established, the employer must prove that the dismissal is fair.

193. Remedies for unfair dismissal and unfair labour practice

If the Labour Court or an arbitrator appointed in terms of this Act finds that a dismissal is unfair, the Court or the arbitrator may-

order the employer to re-instate the employee from any date not earlier than the date of dismissal;

order the employer to re-employ the employee, either in the work in which the employee was employed before the dismissal or in other reasonably suitable work on any terms and from any date not earlier than the date of dismissal; or

order the employer to pay compensation to the employee.

The Labour Court or the arbitrator must require the employer to re-instate or re-employ the employee unless-

the employee does not wish to be re-instated or re-employed;

the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable;

it is not reasonably practicable for the employer to re-instate or re-employ the employee; or

the dismissal is unfair only because the employer did not follow a fair procedure.

If a dismissal is automatically unfair or, if a dismissal based on the employer's operational requirements is found to be unfair, the Labour Court in addition may make any other order that it considers appropriate in the circumstances.*

*The Court, for example, in the case of a dismissal that constitutes an act of discrimination may wish to issue an interdict obliging the employer to stop the discriminatory practice in addition to one of the other remedies it may grant.

An arbitrator appointed in terms of this Act may determine any unfair labour practice dispute referred to the arbitrator, on terms that the arbitrator deems reasonable, which may include ordering reinstatement, re-employment or compensation.

[S. 193 amended by s. 47 (a) of Act No. 12 of 2002. Sub-s. (4) inserted by s. 47 (b) of Act No. 12 of 2002.]

194. Limits on compensation.

The compensation awarded to an employee whose dismissal is found to be unfair either because the employer did not prove that the reason for dismissal was a fair reason relating to the employee's conduct or capacity or the employer's operational requirements or the employer did not follow a fair procedure, or both, must be just and equitable in all the circumstances, but may not be more than the equivalent of 12 months' remuneration calculated at the employee's rate of remuneration on the date of dismissal.

[Sub-s (1) substituted by s. 48 (a) of Act No. 12 of 2002.]

  . . . . . .

[Sub-s (2) deleted by s. 48 (b) of Act No. 12 of 2002.]

The compensation awarded to an employee whose dismissal is automatically unfair must be just and equitable in all the circumstances, but not more than the equivalent of 24 months' remuneration calculated at the employee's rate of remuneration on the date of dismissal.

The compensation awarded to an employee in respect of an unfair labour practice must be just and equitable in all the circumstances, but not more than the equivalent of 12 months remuneration.

[Sub-s (4) added by s. 48 (c) of Act No. 12 of 2002.]

195. Compensation is in addition to any other amount
An order or award of compensation made in terms of this Chapter is in addition to, and not a substitute for, any other amount to which the employee is entitled in terms of any law, collective agreement or contract of employment.

196. Severance pay
[S. 196 repealed by s. 95 (5) of Act No. 75 of 1997.]

197. Transfer of contract of employment.

In this section and in section 197A-

"business" includes the whole or a part of any business, trade, undertaking or service; and

"transfer" means the transfer of a business by one employer ("the old employer") to another employer ("the new employer") as a going concern.

If a transfer of a business takes place, unless otherwise agreed in terms of subsection (6)-

the new employer is automatically substituted in the place of the old employer in respect of all contracts of employment in existence immediately before the date of transfer;

all the rights and obligations between the old employer and an employee at the time of the transfer continue in force as if they had been rights and obligations between the new employer and the employee;

anything done before the transfer by or in relation to the old employer, including the dismissal of an employee or the commission of an unfair labour practice or act liof unfair discrimination, is considered to have been done by or in relation to the new employer; and
the transfer does not interrupt an employee's continuity of employment, and an employee's contract of employment continues with the new employer as if with the old employer.

The new employer complies with subsection (2) if that employer employs transferred employees on terms and conditions that are on the whole not less favourable to the employees than those on which they were employed by the old employer.

Paragraph (a) does not apply to employees if any of their conditions of employment are determined by a collective agreement.

Subsection (2) does not prevent an employee from being transferred to a pension, provident, retirement or similar fund other than the fund to which the employee belonged prior to the transfer, if the criteria in section 14 (1) (c) of the Pension Funds Act, 1956 (Act No. 24 of 1956), are satisfied.*

*Section 14(1)(c) of the Pensions Fund Act requires the registrar to be satisfied that any scheme to amalgamate or transfer funds is reasonable and equitable, and accords full recognition to the rights and reasonable benefit expectations of the persons concerned in terms of the fund rules, and to additional benefits which have become established practice.

For the purposes of this subsection, the collective agreements and arbitration awards referred to in paragraph (b) are agreements and awards that bound the old employer in respect of the employees to be transferred, immediately before the date of transfer.

Unless otherwise agreed in terms of subsection (6), the new employer is bound by-

any arbitration award made in terms of this Act, the common law or any other law;

any collective agreement binding in terms of section 23; and

any collective agreement binding in terms of section 32 unless a commissioner acting in terms of section 62 decides otherwise.

An agreement contemplated in subsection (2) must be in writing and concluded between-

either the old employer, the new employer, or the old and new employers acting jointly, on the one hand; and

the appropriate person or body referred to in section 189 (1), on the other.

In any negotiations to conclude an agreement contemplated by paragraph (a), the employer or employers contemplated in subparagraph (i), must disclose to the person or body contemplated in subparagraph (ii), all relevant information that will allow it to engage effectively in the negotiations.

Section 16 (4) to (14) applies, read with the changes required by the context, to the disclosure of information in terms of paragraph (b).

The old employer must-

agree with the new employer to a valuation as at the date of transfer of-

the leave pay accrued to the transferred employees of the old employer;

the severance pay that would have been payable to the transferred employees of the old employer in the event of a dismissal by reason of the employer's operational requirements; and

any other payments that have accrued to the transferred employees but have not been paid to employees of the old employer;

conclude a written agreement that specifies-

which employer is liable for paying any amount referred to in paragraph (a), and in the case of the apportionment of liability between them, the terms of that apportionment; and

what provision has been made for any payment contemplated in paragraph (a) if any employee becomes entitled to receive a payment;

disclose the terms of the agreement contemplated in paragraph (b) to each employee who after the transfer becomes employed by the new employer; and

take any other measure that may be reasonable in the circumstances to ensure that adequate provision is made for any obligation on the new employer that may arise in literms of paragraph (a).

For a period of 12 months after the date of the transfer, the old employer is jointly and severally liable with the new employer to any employee who becomes entitled to receive a payment contemplated in subsection (7) (a) as a result of the employee's dismissal for a reason relating to the employer's operational requirements or the employer's liquidation or sequestration, unless the old employer is able to show that it has complied with the provisions of this section.

The old and new employer are jointly and severally liable in respect of any claim concerning any term or condition of employment that arose prior to the transfer.

This section does not affect the liability of any person to be prosecuted for, convicted of, and sentenced for, any offence.

[S. 197 substituted by s. 49 of Act No. 12 of 2002.]

197A. Transfer of contract of employment in circumstances of insolvency.

This section applies to a transfer of a business-

if the old employer is insolvent; or

if a scheme of arrangement or compromise is being entered into to avoid winding-up or sequestration for reasons of insolvency.

Despite the Insolvency Act, 1936 (Act No. 24 of 1936), if a transfer of a business takes place in the circumstances contemplated in subsection (1), unless otherwise agreed in terms of section 197 (6)-

the new employer is automatically substituted in the place of the old employer in all contracts of employment in existence immediately before the old employer's provisional winding-up or sequestration;

all the rights and obligations between the old employer and each employee at the time of the transfer remain rights and obligations between the old employer and each employee;

anything done before the transfer by the old employer in respect of each employee is considered to have been done by the old employer;

the transfer does not interrupt the employee's continuity of employment and the employee's contract of employment continues with the new employer as if with the old employer.

Section 197 (3), (4), (5) and (10) applies to a transfer in terms of this section and any reference to an agreement in that section must be read as a reference to an agreement contemplated in section 197 (6).

Section 197 (5) applies to a collective agreement or arbitration binding on the employer immediately before the employer's provisional winding-up or sequestration.

Section 197 (7), (8) and (9) does not apply to a transfer in accordance with this section.

[S. 197A inserted by s. 50 of Act No. 12 of 2002.]

197B. Disclosure of information concerning insolvency

An employer that is facing financial difficulties that may reasonably result in the winding-up or sequestration of the employer, must advise a consulting party contemplated in section 189 (1).

An employer that applies to be wound up or sequestrated, whether in terms of the Insolvency Act, 1936, or any other law, must at the time of making application, provide a consulting party contemplated in section 189 (1) with a copy of the application.

An employer that receives an application for its winding-up or sequestration must supply a copy of the application to any consulting party contemplated in section 189 (1), within two days of receipt, or if the proceedings are urgent, within 12 hours.

[S. 197B inserted by s. 50 of Act No. 12 of 2002.]