Should s 197 of the LRA be amended to automatically protect employees when labour intensive services are outsourced or when a new service provider is appointed?

Authors Ian Davis

ISSN: 2413-9874
Affiliations: None
Source: Industrial Law Journal, Volume 37 Issue 4, 2016, p. 45 – 61


It is common practice for private or public employers to enter into arrangements with service providers in terms of which the employer outsources, to the service provider, certain labour intensive services, such as catering, cleaning, gardening or security. These services may previously have been performed by employees of the outsourcing organisation, or they may have been contracted out to another service provider and the outsourcing organisation is now seeking to change providers or to bring the services back in-house. Although the intention of s 197 of the LRA is to provide protection to employees when a business is transferred as a going concern, the extent to which the definitional elements of s 197 apply when labour intensive services are outsourced, particularly for a second time, or are insourced, is uncertain. Accordingly, labour intensive service workers may be exposed to uncertainty and potential abuse. This article proposes, in light of developments in the UK, including the provisions in the Transfer of Undertakings (Protection of Employment Regulations) of 2006, amending s 197 to apply automatically in circumstances in which labour intensive services are outsourced.