Employee rights in business transfers

Under Section 197 of the Labour Relations Act (LRA), when a business is sold as a going concern, employees' contracts transfer automatically to the new employer, preserving rights, obligations, and continuity of service. The Labour Appeal Court case of Africa Online Operations v Scanlon (2024) reaffirmed these protections, even in cases of liquidation, provided business operations continue. Employers cannot alter terms without agreement, ensuring employees' rights remain safeguarded.