Outsourced – Let’s chat about S197 of the Labour Relations Act

When a portion of a business is transferred or outsourced ‘as a going concern’ to a new owner, the employees’ rights are always a primary concern. Outsourcing must be commercially sensible but it must also protect employment and our fragile job markets.

Essentially, when a company takes over or buys out an existing company or division as a going concern, the rights the employees  and the obligations of the old employers are transferred to the new employer. “This includes but is not limited to length of service,” says Russell Milella of The Nimble Group  – who have successfully implemented  s197  transfers on many occasions when implementing its BPO solutions with its clients.

Legally speaking, the new employer is responsible for all the obligations related to the employees who are transferred from their existing employers.

S197 applies if the following 3 criteria are met:

  1. There is a transfer of an entity from one party to another.
  2. The transferred entity must be the whole or a part of a business.
  3. The business must be transferred as a going concern.

“The process is neither difficult nor daunting,” says Milella.  “Businesses considering this type of transfer should not be unduly concerned about the future of their staff as it is very uncomplicated and caters fully for all affected employees.”

A few things to consider when contemplating the Transfers:

  • Agreements with unions
  • Number of employees to be transferred
  • Pension Fund, Provident Fund and Medical Aid
  • Any outstanding labour disputes and their monetary value
  • All leave entitlements and records up to date

Proud to be a substantial job creator

Nimble touches the lives of many people daily. With over 2 000 employees across the Nimble Group, substantial clients and extensive engagement with a large proportion of the population through our large processing centre activities – the very essence of our business makes us people orientated.

“When core activities are people dependent, the onus is firmly on the business and its management to be deeply people centric,” says CEO Rowan Gordon. Nimble’s responsibility to conduct itself as a good corporate citizen in the jurisdictions within which it operates, and to positively impact its stakeholders: customers, employees, management, shareholders and civil society – is a responsibility we are very earnest about.”

When it comes to BPO, Nimble will guide you every step of the way to ensure an easy transition while creating continuity of employment for your staff.

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