Labour Law

A Company Has Gone into Business Rescue: What Are the Employee’s Rights?

South Africa’s Labour Law is very liberal and open to interpretation regarding employment and contractual obligations. Therefore, if you find yourself in a labour dispute as an employee, it is pivotal to have a Labour Law specialist on your side. With COVID-19 spoiling the entire 2020, many businesses were forced to enter Business Rescue – a state of rehabilitation for a company that is financially stressed. During this period, employees are unsure about their legal rights, as some actions from their employers might seem illegal or unjust. This is where our services can help you better understand your position as an employee and your legal rights on which you can stand.

What Are My Rights During Business Rescue?

Regarding the general position for an employee at a company that has entered business rescue, we refer to Section 136 of the Companies Act 71 of 2008 that deals with the effect of business rescue on employees and their contractual agreements. This section states that before a company’s business rescue proceedings start, employees of the company will continue to be employed on the same terms and agreements of their current contract, except when changes occur in the ordinary course of attrition or the employees and the company agree to different terms and conditions in accordance with applicable labour laws. It also states that any retrenchment of employees that are contemplated during business rescue is subject to sections 189 and 189A of the Labour Relations Act of 1995, as well as other applicable employment-related legislations.

If you are an employee for a business that has entered business rescue, and you are unsure about your legal rights as an employee, Allardyce & Partners Attorneys offers Labour Law specialists to assist you with any legal services and enquiries. By having an expert on your side, you can make informed decisions on pursuing any legal disputes and if your employer’s actions are legal in accordance with South Africa’s labour laws. Please contact us on 011 234 2125 or email us at enquiries@allardyce.co.za for more information today.