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Labour Relations Act, 1995 (Act No. 66 of 1995)


Bargaining Council for the Hairdressing, Cosmetology, Beauty and Skincare Industry (Pretoria)

Main Collective Agreement

42A. Transfer of Contract of Employment in Circumstances of Insolvency



(1) This clause applies to a transfer of a business—
(a) if the employer is insolvent; or
(b) if a scheme of arrangement or compromise is being entered into to avoid winding-up or sequestration for reasons of insolvency.


(2) If a transfer of a business takes place in the circumstances contemplated in sub-clause (1), unless otherwise agreed in terms of clause 42 (6)—
(a) the new employer is automatically substituted in the place of the old employer in all contracts of employment in existence immediately before the old employer's provisional winding-up or sequestration;
(b) all the rights and obligations between the old employer and each employee at the time of the transfer remain rights and obligations between the old employer and each employee;
(c) anything done before the transfer by the old employer in respect of each employee is considered to have been done by the old employer;
(d) the transfer does not interrupt the employee's continuity of employment and the employee's contract of employment continues with the new employer as if with the old employer.


(3) Clause 42(3), (4), (5) and (10) applies to a transfer in terms of this clause and any reference to an agreement in that clause must be read as a reference to an agreement contemplated in clause 42(6).


(4) Clause 42(5) applies to a collective agreement or arbitration binding on the employer immediately before the employer's provisional winding-up or sequestration.


(5) Clause 42(7), (8) and (9) does not apply to a transfer in accordance with this clause.