1 December 2010 by

The new company law dispensation

"Nothing is impossible for the man who doesn't have to do it himself." - Weiler's Law

The myriad of Labour Legislation that has been passed since 1994 has entrenched the rights of employees and ensured that employees are offered protection, which is consistent with international labour standards.

The protection and enhancement of employees' rights have been also entrenched in "non-employment law legislation", for example the Competition Act No. 89 of 1998. The introduction of the Companies Act 71 of 2008 (the Act) is illustrative of the importance that the legislature has placed on the rights of employees and registered trade unions. This publication seeks to illustrate the protection and enhancement of employees' rights in a piece of legislation which traditionally has not regulated the obligations and/or rights of employees and/or trade unions.

What is the reason for this change? We are of the view that one of the reasons is to ensure that the activities of companies are more transparent. It further empowers employees and registered trade unions to keep a watchful eye on the activities of directors and the company. An example of this is the ability of an employee or a registered trade union to apply to Court to have a director either declared delinquent or to be placed under probation.

The powers granted to employees and registered trade unions under the business rescue provisions, are there to protect the interest of workers. Arguably, these provisions may be seen as an extension of the provisions of Section 189 of the Labour Relations Act 66 of 1995, which deals with the responsibilities that an employer has towards its employees during a retrenchment exercise.

We trust that this publication will enlighten you on the new role that employees and registered trade unions will play under the new Company Law dispensation.

Aadil Patel, Director

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