Labour Law
Section 197 Transfer
When a business (or part of it) is transferred as a going concern, Section 197 of the LRA protects employees — their employment transfers automatically on the same or better terms.
Legal Definition
Section 197 of the Labour Relations Act 66 of 1995: when a business is transferred as a going concern, employees transfer automatically to the new employer on terms no less favourable than before. The new employer is jointly and severally liable with the old employer for pre-transfer obligations.
📖 Constitutional / Statutory Basis: Section 23, Constitution of the Republic of South Africa, 1996; Labour Relations Act 66 of 1995 s197
Practical Example
A cleaning company loses its contract to a new service provider. Under s197, employees of the old cleaning company must be taken on by the new provider on the same terms — they cannot be dismissed to create new posts.
Frequently Asked Questions
What is a "transfer as a going concern"?
A transfer where the business (or part) is sold or transferred with its assets, contracts, and workforce as a functional entity — not just asset sales.
Can I agree to different terms when transferred?
Only if the new employer's terms are not less favourable overall. Any term that reduces employment conditions requires agreement and justification.
What if the new employer refuses to take me on under s197?
This constitutes an unfair dismissal by the old employer. You can refer to the CCMA against the old employer, old and new employer jointly, or the new employer.
Related Terms
Know the law. Know what to say.
Get the free South African rights checklist — 10 real scenarios, exact words to use, constitutional references. No card needed.