, Global Business Solutions

Section 197

Whilst most businesses are by now familiar with the provisions of section 197 of the LRA, their focus is frequently only on the applicability of section 197 and the most basic consequences thereof: the preservation of the existing terms and conditions of employment. This results in the automatic transfer of employees to new employers under the exact same terms and conditions as before, which in practice can have very negative consequences on the internal parity of the new employer.​

In practice, the process of determining what the new terms and conditions of employees to be transferred, should be ensuring that these terms and conditions are on the whole not less favourable, is an exercise involving various specialised disciplines (such as remuneration, tax and labour law experts) frequently referred to as an “equalisation”. Global Business Solutions has significant experience in this field and offers a variety of services to support and ensure legally compliant transfers in terms of section 197 of the LRA, including:​

  • Human Resources Due Diligence (including assessment of payroll and remuneration structures)​
  • Devising solutions for equalisations (with a focus on maintaining internal parity at the new employer)​
  • Facilitating employee consultations on transfer (ensuring a smooth transfer)​
  • Project Management of all of the above processes​
  • General advice on S197 transfers​

For more information and assistance, please contact us here