Employee protection during business rescue proceedings in South Africa : a comparative perspective

Includes bibliographical references.The Companies Act 71 of 2008 (hereafter ‘the Companies Act 2008’) came into force in 2011, bringing with it a corporate rescue regime called ‘business rescue’. If a business is placed under business rescue there are a multitude of legal consequences that follow. A thorough reading of the business rescue provisions reveals that employees are granted a large number of important rights and protections when their employer is placed under business rescue. This dissertation consolidates the company law and labour law aspects of this area of law in order to gain comprehensive understanding of the protection given to employees during business rescue. It is important for lawyers, employees, employers and business rescue practitioners to understand what rights employees have during business rescue in order for those rights to be enforced and utilised effectively. While the protection of employees is undeniably an important objective, it has been argued that the amount of protection afforded to employees in chapter 6 is worrying in that their over-protection could potentially be detrimental to the overall success of the business rescue proceedings. This may ultimately have a negative effect on employees as it is in the best interests of the employees for the business rescue proceedings to be successful. The focus of this dissertation is therefore on whether employees in South Africa are afforded too much protection during business rescue proceedings and, if so, which provisions are problematic