Court upholds decision that it would be procedurally unfair to retrench workers without a published business rescue plan.
The Labour Court has upheld its ruling that business rescue practitioners cannot issue a notice to retrench workers without first publishing a business rescue plan, which South African Airways administrators had sought to appeal.
They argued that Section 136 does not provide additional rights to employees, and that employee rights would have to be balanced with the rights of an employer trying to ensure a reasonable rescue of a financially-distressed business.At the time the BRPs launched their appeal of the Labour Court ruling, they had not published a final rescue plan.
“The primary aim of a corporate rescue procedure is not merely to rescue a company or potentially successful parts of a business,” said Phatshoane, saying that the process aims to ensure the preservation of the entire entity, including jobs. “To interpret Section 136 in the manner contended would do violence to the language of the section,” said Phatshoane.
“There is nothing in the interpretation that I have given to Section 136 of the Companies Act that is at war with that spirit, purport, and objects of the Constitution,” she said.
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