LABOUR LAW – LABL3541 – SCHOOL OF LAW – MERCANTILE LAW DEPARTMENT

QUESTION 1

VDM (Pty) Ltd is not making as much as it would like and elects to embark on a restructuring exercise in order to reduce costs and maximise profits. The company, acting on the advice of a team of consultants, decides to focus on its core business of manufacturing dairy products and to find ways to get other businesses to cater for the ‘ancillary’ services that it needs. The company therefore decides to introduce a scheme whereby certain of the company’s delivery truck drivers will resign and subsequently be assisted by VDM to establish their own companies which will then provide VDM with the delivery services that it requires. An understanding is reached in terms of which the close corporations will initially lease delivery truck(s) from VDM until they have generated enough capital to buy the trucks from dairy.

Once all of this administration has been taken care off, VDM proceeds to inform the employees remaining in the delivery truck that it no longer going to be performing the delivery function and that their positions are therefore redundant. They will be retrenched by VDM, but have the opportunity to go and work the company newly established by former delivery truck drivers, doing much as the same as they do at present. Thus it happens that all employees in the delivery truck division of VDM are dismissed due to the company’s operational requirements.

The newly established company is willing to take ex-employees of VDM into employment but on lessor terms and conditions than those that existed between those employees and VDM.

The recently retrenched workers from the delivery truck division are understandably upset. They allege that their dismissal were substantively and procedurally unfair and take the matter to the Labour Court. The Labour finds that the dismissal were procedurally and substantively unfair and makes an order of reinstatement.

VDM argue that the reinstatement order should not operate against them as there has been a transfer for the purposes of section 197 of the LRA. The employees argue that if they are to be reinstated with the new company they should be employed on the same terms and conditions as those that they enjoyed with VDM due to the operation of section 197 of the LRA.

You are requested to give opinion as to the legal position of the various parties involved. Your legal opinion should embody not less ten cases and articles, including textbooks.                                                                                   [20]

Note well, what is expected is high level legal analysis of the relevant legal principles and pertinent jurisprudence.  Without this high level legal analysis, it will be extremely unlikely that a student will achieve high marks.  Detailed analysis is needed for a good mar.

QUESTION 2 – CASE NOTE

Choose ONE of the following cases for Case Note Commentary:

Note well, what is expected is high level legal analysis of the relevant legal principles and pertinent jurisprudence.  Without this high level legal analysis it will be extremely unlikely that a student will achieve high marks.  Detailed analysis is needed for a good mark. 

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