What happens to employees when a business is sold?
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GUEST – Kagiso Lebethe - Senior Employee Relations Specialist
In the event that a company/business is sold as a ‘going concern’, section 197 of the Labour Relations Act becomes applicable. Section 197 of the Labour Relations Act regulates the transfer of a business and the rights of all employees affected by the transfer. In terms of section 197, a ‘business’ includes the whole or a part of any business, trade, undertaking or service, while ‘transfer’ means the transfer of a business by one employer (‘the old employer’) to another employer (‘the new employer’) as a going concern, which can also be referred to as the business changing hands.
In the event that a company/business is sold as a ‘going concern’, section 197 of the Labour Relations Act becomes applicable. Section 197 of the Labour Relations Act regulates the transfer of a business and the rights of all employees affected by the transfer. In terms of section 197, a ‘business’ includes the whole or a part of any business, trade, undertaking or service, while ‘transfer’ means the transfer of a business by one employer (‘the old employer’) to another employer (‘the new employer’) as a going concern, which can also be referred to as the business changing hands.