ARE THE RIGHTS OF BUSINESS EMPLOYEES PREFERRED MORE THAN THE RIGHTS OF DOMESTIC EMPLOYEES? Gungudoo v Hannover Reinsurance Group (Pty) Ltd (585/11) [2012] ZASCA 83 (30 May 2012) Revisited

Abstract

This case note examines, inter alia, the effect of a sequestration order on the debtor and relevant stakeholders such as creditors, shareholders and other interested parties. The case note further discusses certain requirements for the application of a sequestration order in South Africa in light of the judgment in Gungudoo v Hannover Reinsurance Group Africa ((585/11) [2012] ZASCA 83 (30 May 2012). This case raised some pertinent questions regarding the application and serving of a sequestration order on the debtor, in terms of the Insolvency Act. For instance, such questions include first, whether the creditors’ or respondents’ application for compulsory sequestration was instituted or disputed on reasonable grounds, and secondly, whether the creditors or respondents had properly notified the debtors’ or appellants’ employees of the sequestration proceedings in accordance with the Insolvency Act. In light of this, the case note explores whether the appellants or debtors’ domestic employees were also entitled to be served with a sequestration order. This is done to expose the legislative flaws and other constitutional challenges associated with the judgment in the Gungudoo case. To this end, the relevant legislation (such as the Employment Equity Act 55 of 1998 (Employment Equity Act), the Basic Conditions of Employment Act 75 of 1997 as amended (Basic Conditions of Employment Act), and the Labour Relations Act 66 of 1995 as amended (Labour Relations Act)) as well as other related recent cases will be briefly analysed in this article.