CRS Business Rescue
In-depth analysis of the business rescue provisions contained in Chapter 6 of the Companies Act No. 71 of 2008 and the Companies Amendment Act No. 3 of 2011

Section 144: Rights of employees

as amended by section 94 of the Companies Amendment Act No. 3 of 2011

(1) During a company’s business rescue proceedings any employees of the company who are—

(a) represented by a registered trade union may exercise any rights set out in this Chapter—

(i) collectively through their trade union; and

(ii) in accordance with applicable labour law; or

(b) not represented by a registered trade union may elect to exercise any rights set out in this Chapter either directly, or by proxy through an employee organisation or representative.

(2) To the extent that any remuneration, reimbursement for expenses or other amount of money relating to employment became due and payable by a company to an employee at any time before the beginning of the company’s business rescue proceedings, and had not been paid to that employee immediately before the beginning of those proceedings, the employee is a preferred unsecured creditor of the company for the purposes of this Chapter.

(3) During a company’s business rescue process, every registered trade union representing any employees of the company, and any employee who is not so represented, is entitled to—

(a) notice, which must be given in the prescribed manner and form to employees at their workplace, and served at the head office of the relevant trade union, of each court proceeding, decision, meeting or other relevant event concerning the business rescue proceedings;

(b) participate in any court proceedings arising during the business rescue proceedings;

(c) form a committee of employees’ representatives;

(d) be consulted by the practitioner during the development of the business rescue plan, and afforded sufficient opportunity to review any such plan and prepare a submission contemplated in section 152(1)(c);

(e) be present and make a submission to the meeting of the holders of voting interests before a vote is taken on any proposed business rescue plan, as contemplated in section 152(1)(c);

(f) vote with creditors on a motion to approve a proposed business plan, to the extent that the employee is a creditor, as contemplated in subsection (2); and

(g) if the proposed business rescue plan is rejected, to—

(i) propose the development of an alternative plan, in the manner contemplated in section 153; or

(ii) present an offer to acquire the interests of one or more affected persons, in the manner contemplated in section 153.

(4) A medical scheme, or a pension scheme including a provident scheme, for the benefit of the past or present employees of a company is an unsecured creditor of the company for the purposes of this Chapter to the extent of—

(a) any amount that was due and payable by the company to the trustees of the scheme at any time before the beginning of the company’s business rescue proceedings, and that had not been paid immediately before the beginning of those proceedings; and

(b) in the case of a defined benefit pension scheme, the present value at the commencement of the business rescue proceedings of any unfunded liability under that scheme.

(5) The rights set out in this section are in addition to any other rights arising or accruing in terms of any law, contract, collective agreement, shareholding, security or court order.


Business rescue legislation

Other legislation cited by Chapter 6


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Business rescue provisions in the Companies Acts and Regulations

Business rescue provisions in Chapter 6 of the Companies Act No. 71 of 2008 pdf (323k).

Ondernemingreddingbepalings in Hoofstuk 6 van die Maatskappywet No. 71 of 2008 pdf (333k).

Business rescue provisions in Chapter 6 of the Companies Amendment Act No. 3 of 2011 pdf (279k).

Business rescue provisions in Chapter 6 of the Companies Amendment Act No. 3 of 2011 (English/Afrikaans version) pdf (792k).

Business rescue provisions in Chapter 6 of the unofficial LexisNexis Consolidated Companies Act pdf (105k).

Business rescue provisions in Chapter 6 of the Companies Regulations, 2011 pdf (62k).

Companies Acts and Regulations

Companies Act No. 71 of 2008 pdf (829k).

Mastskappywet No. 71 of 2008 pdf (545k).

Companies Amendment Act No. 3 of 2011 pdf (2 000k).

Companies Amendment Act No. 3 of 2011 (English/Afrikaans version) pdf (5 920k).

Unofficial LexisNexis Consolidated Companies Act pdf (945k).

Companies Regulations, 2011 pdf (951k).