A landmark judgement given in the Labour Appeal Court fundamentally changes the law relating to the employment consequences of outsourced services when a business is transferred to a new entity.
In its decision on AUSA obo Barnes & others / South African Airways
(Pty) Limited, the Labour Appeal Court ruled in favour of "second
generation" outsourcing. It found that Section 197 of the Labour
Relations Act (LRA) contemplates not only first generation outsourcing
- where the business is transferred by the old employer to the new
employer - but also so-called second generation outsourcing.
