If you are the new employer in the case of a section 197 transfer you will take over the employment relationship from the previous employer lock, stock and barrel. If not, these T&Cs must be substantially similar to these. This means that the terms and conditions you give the employees coming from the transferred entity must be the same as what they had. In other words, it must be a going concern.Įmployees who are being transferred must not be given new terms and conditions of employment that are on the whole less favourable than the previous ones. For a business to be successfully transferred, it must be still functioning.A portion of the business, trade, undertaking or service can be transferred. A business doesn’t have to be whole when it is transferred.Most importantly you need to understand them. Must-Know Section 197 Transfer Definitionsīefore you start worrying about whether or not you, as an employer, will be liable under section 197 of the LRAA, there are two fundamental definitions that you need to know. This article will give you a bit more insight into what your obligations are in terms of this section of the LRAA. This was done to, among others, protect the employment of people in companies which are, for example, being sold or transferred. The Labour Relations Amendment Act (LRAA) 127 of 1998 introduced the concept of Section 197 transfer.
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