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Item Open Access A business rescue model for unincorporated business entities in South Africa(University of the Free State, 2022) Mpofu, Kudzai; Moolman, H. J.; Snyman-Van Deventer, E.The significance of small and medium enterprises in promoting economic growth has received sufficient academic and legislative attention. However, little attention has been paid towards promoting and promulgating legislation that oversees the recovery of small enterprises in financial distress. The study compares business rescue schemes applicable to sole proprietorships and partnerships to draw lessons for the legislature and policymakers in South Africa. The current legislation on business rescue and debt review intentionally exclude sole proprietorships and partnerships mainly because of their legal personality. The Companies Act of 2008 only admits incorporated companies to business rescue. Furthermore, the National Credit Act 2005 excludes partnerships from debt review because the legislature classified them as juristic persons. For this reason, sole proprietorships and partnerships in financial distress cannot depend on the current legislation to facilitate restructuring proceedings. Therefore, the study identifies the key elements of an effective business rescue scheme which may apply to unincorporated business entities. Through a comparative assessment of different rescue regimes, it was concluded that an efficient rescue scheme must consist of an eligibility criterion, a procedural framework consisting of a step-by-step rescue process and an institutional framework with already pre-determined role players. The main conclusions from the study are that the eligibility criterion must only admit business debtors to the business rescue process. On that note, it was observed that it would be necessary to regulate the liability of sole proprietorships and partnerships during the rescue process. This may be achieved by recognising them (sole proprietorships and partnerships) as legal persons for purposes of business rescue. The study shows that the step-by-step procedure should include a commencement procedure that allows owners of sole proprietorships and partners in a partnership to apply for business rescue. As soon as the procedure commences, a moratorium on creditors' rights must be automatically activated. The stay should protect the business, the owners, and the codebtors. While the moratorium is the operation, the business rescue practitioner must prepare a business rescue plan that includes the treatment of secured and unsecured creditors. More so, consideration must be made on the possibility of selling parts of the business, merging the business with other successful businesses or incorporating the business. The study revealed that it may be necessary for the legislature to allow the debtor to continue borrowing during the business rescue process. However, the rescue process is terminated if the business rescue plan is fully implemented or the debtor faces unforeseen economic hardships. The effect of termination is that the debtor is discharged. The study indicates that the institutional structure should include the debtor, the business rescue practitioner and a specialised judge. The success of business rescue depends on the honesty and cooperation of the debtor. It was concluded that to reduce the cost of business, rescue the debtor may remain in control of its business but must be monitored regularly by appointing a state-sponsored business rescue practitioner who reports to the creditors. In the event that the creditors have reason to mistrust the debtor's honesty, they may choose to appoint and pay for a private business rescue practitioner jointly. In that case, the debtor must cooperate with the business rescue practitioner who oversees or monitors the rescue process. The business rescue practitioner must regularly report to the creditors and the court about the success or failures of the debtor. Since business rescue involves different areas of study, including business, law and financing, it was concluded that South Africa might need a specialised court system. Establishing an administrative institution akin to the Office of the official receiver would also be necessary to oversee the rescue process. Such an institution may be subsidised by the state to reduce the cost of business rescue. Generally, most of the observations made during the study were included in the recommendation to the legislature.Item Open Access Decent work for on-demand workers in the modern-day gig economy(University of the Free State, 2023) Stopforth, Grey; Smit, D. M.Radical technological development during the past two centuries has led to various enabling technologies changing the world of work on a global scale and, unfortunately, not always for the better. With one of the highest unemployment rates in the world, South Africa's reliance on informal forms of work is increasing, raising the question of how to ensure decent work in the modern world of work. This becomes even more troubling, seeing that millions of unemployed people are trying to enter the labour market. This is especially true for unemployed youth in South Africa, who are suited for these new forms of work due to technological advancements, the rise of complexities associated with the gig economy, and the skills required by jobs. Although the benefits of embracing the technological changes in the workplace are apparent, some technologies continue to disrupt the traditional employment model to the extent that many are excluded from labour and social protections. One of the emerging sectors brought about by the technological changes, especially the use of mobile applications, is the gig economy. The gig economy is an economy that involves the exchange of labour for payment between companies or individuals via a digital platform. The concept 'gig economy' is used interchangeably with other types of economies that are linked to platform work. This includes economies such as the digital economy, collaborative economy, sharing economy, platform economy, and on-demand economy. The gig economic model leans more towards emerging economic activities coupled with the platform economy, which is divided into two forms of platform work, crowdwork and on-demand work. In addition, platform work is characterised by irregular work arrangements, additional costs on workers providing the service, work that is paid for tasks completed, and accessibility of work facilitated by various platforms. Research suggests that non-standard forms of work continue to feature in the gig economy, and that classification of platform workers as independent contractors remains a major concern. International perspectives and research conducted on on-demand work in foreign jurisdictions is instrumental to finding best practices for advocating decent on-demand work. Although the ILO has yet to reach an agreement on a universal approach to regulating on-demand work, it has taken progressive steps to achieve decent work for, and extend basic labour and social protection to, those working in the gig economy. However, a solution for the universal regulation of the modern-day gig economy and on-demand work remains elusive. In the absence of such, it is found that on-demand workers are rendered vulnerable in respect of basic conditions of employment, having little to no control over unilateral changes to the contractual terms that regulate their relationship. On-demand workers also lack protection at the level of both individual and collective labour rights; therefore, they experience unfair deactivation, discrimination by both clients and the platform, and poor collective bargaining power. Taking this into account, the question needs to be asked if South Africa sufficiently advocates for decent on-demand work. The rights of on-demand workers warrant urgent regulatory intervention that could take the form of proactive steps from a platform company in the form of policy considerations from the platform company. A workable solution to the decent work deficit in the on-demand sector can therefore be proposed by either the legislator by way of legal reform, or by the platform company by means of policy measures and/or revised terms and conditions.Item Open Access 'n Regsvergelykende studie aangaande die leerstuk lig van die korporatiewe sluier(University of the Free State, 2013-02) Keuler, Anel; Snyman-Van Deventer, E.English: Lifting of the corporate veil as an exception to the rule of limited liability surely is one of the most litigated issues in corporate law worldwide. The reason being the lack in predictability and sturdy rules that can be used as guidelines when setting aside the corporate veil. The common approach of courts is to determine each case on its own merits which left the doctrine of lifting the corporate veil enveloped in the mist of metaphor, unpredictable and vague. As an answer to the need for sturdy guidelines section 20(9) was implemented in die 2008 Companies Act stating that the separateness of a legal person can be set aside if an unconscionable misuse of the corporate personality has taken place. Section 20(9) however does not state what exactly will be deemed as an unconscionable misuse. The interpretation of unconscionable misuse is there for left to the courts discretion. The aim of this study is to find answers to this vagueness and uncertainty by identifying possible grounds or guidelines for lifting of the corporate veil. During this comparative study attention is also given to the legal state of matters regarding lifting of the corporate veil in Australia, the United States of America and Canada to identify useful guidelines and principles which will assist the South-African courts in setting aside the corporate veil. The Australians considers the proceeding of business under insolvent circumstances as a statutory ground for lifting the veil. The American courts also show support for fraud as a ground for lifting the corporate veil. A solid Canadian ground for lifting the corporate veil is in the family context where one party would unjustly suffer a loss if the other parties company is treated as a separate entity. The Canadians also considers tax evasion and not adding the suffix “Ltd” to the company name as grounds for lifting the corporate veil. These mentioned grounds for lifting the corporate veil can surely be adopted by the South-African courts as part of a sturdy set of guidelines.Item Open Access The world trade organisation general agreement on trade in services: deregulating trade in Banking servlces in developing countries(University of the Free State, 2013-01) Acho Kum, Victorine Sirri; Snyman-van Deventer, E.English: This thesis has investigated the deregulation of trade in Banking Services in developing countries. It has investigated the deregulation of trade in banking services by an analysis of trade in banking services under the European Union, the United States of America, China and South Africa. The objective was to analyse the liberation process that has taken place in these countries and evaluate it in the context of negotiations on multilateral liberalisation of banking services within the World Trade Organisation framework. In particular, has the path adopted by these countries represented the best case of successful extensive deregulation in the banking services industries of developing countries? It is worth understanding whether this route could represent a blueprint for opening up markets in developing countries. Hence the sequence of deregulation and problems faced by these countries in deregulating their markets are here studied in order to provide insight in the areas that are likely to be most difficult to open internationally and are expected to lift impediments to multilateral negotiations. The thesis cover the traditional services provided by banks, such as acceptance of money transmission services. The thesis also focus on the principles for regulating the liberalisation provision of trade in banking services because of the unique character of such services and because, despite the increasing liberalisation of trade in banking services, national regulatory systems still differ substantially. Attempts made by the Basel Committee with its Core Principles for effective banking regulation and supervision was discussed to see whether or not this attempt has assisted toward ensuring that all banks are supervised according to common principles. It has been established that harmonisation of prudential and supervisory regulations are warranted where entry is restricted by differences among national regulations. However this should be done without preventing the host state from retaining the right to regulate foreign banks' activities in the host state only to the extent that such regulation is necessary for the protection of public interest. The host state may also intervene in those matters expressly reserve to it, notably liquidity, monetary and advertising. Lastly, an in-depth examination of the World Trade Organisation legal text was done in an attempt to extract the legal principle relevant to the deregulation of trade in banking services in developing countries. It was attempted to determine the most common issues between host countries and home countries, and to compare it. Their usual plea is for international harmonisation of national regulatory regimes, so as to coordinate their efforts, create a level playing field, and prevents a competitive race to the bottom among national regulators that ultimately harm the participants in these markets and the reluctance of the World Trade Organisation to prevent this.Item Open Access Mental health and the world of work: a comparative analysis of the legal frameworks governing categories of mental health conditions(University of the Free State, 2016-07) Viviers, Damian John; Smit, D. M.; Pretorius, J. L.English: Mental health conditions such as depression are common in the world of work. Despite having been a significant concern for centuries already, these conditions are becoming particularly prevalent in modern society and workplaces across the globe. Although they affect the legal realm in many different areas, mental health conditions are often misunderstood and inappropriately dealt with from a legal perspective. Inevitably, this will give rise to concerns in the employment environment. Depression appears to be the most prevalent of all the categories of mental health conditions, with the most noteworthy impact on employment. Its symptoms are debilitating and impair sufferers’ ability to fulfil the inherent requirements of their jobs. In addition, the medication used to treat and manage mental health conditions, such as antidepressants, also leads to various debilitating side effects, which may further affect the person’s ability to function efficiently at work. The United Nations (UN) Disability Convention has set the international benchmark for all jurisdictions in addressing mental disabilities, discrimination based on mental health as well as reasonable accommodation for these conditions. The convention displays support for the social model of disability and a substantive approach to equality. The International Labour Organisation (ILO) has in turn also played a significant role in offering guidance for domestic legal frameworks to address mental health concerns in the workplace. Against the backdrop of international instruments such as those of the UN and the ILO, this study takes an in-depth look at the approach to mental health conditions in employment in the jurisdictions of South Africa, the United States (USA) and the United Kingdom (UK). More specifically, the research analyses the various jurisdictions’ take on mental health conditions as disabilities under the law, the disputability of workplace discrimination based on mental health, and the procedures and measures to provide reasonable accommodation for employees with mental health conditions. Across the jurisdictions, depression in particular and mental health conditions in general may amount to legally recognisable disabilities if they can satisfy the elements of the specific disability definition used. In South Africa, the USA and the UK, these definitions and elements differ. These three jurisdictions’ legal frameworks do however acknowledge that in order for a mental health condition to attract disability status, the condition must be recognisable and must have a particular impact on the life or employment potential of the employee or job applicant within a particular timeline. Although the Constitution of the Republic of South Africa, 1996, requires a substantive approach to equality and, thus, the consideration that mental health conditions such as depression may amount to legally recognisable disabilities, South African disability law has been slow to give effect to this, lagging slightly behind the USA and UK in this regard. Consequently, the South African legal position on mental disabilities is underdeveloped and ambiguous. Due to the significant stigma and prejudice associated with mental health conditions, they often form the basis for discrimination in both society and the workplace. Discrimination based on a person’s mental health status impairs the individual’s right to dignity, equality and non-discrimination, and may potentially even aggravate existing mental health conditions. In the USA, UK and South Africa, discrimination based on mental health may be challenged on the protected ground of disability, provided that the condition in question satisfies the legal requirements to constitute a mental disability. The UN Disability Convention along with disability-specific legislation in the USA and UK extensively governs this consideration. South Africa, on the other hand, does not have any legislation giving effect to the UN Disability Convention. Yet, the Constitution and the Employment Equity Act do enable victims to challenge discrimination based on mental health on either the protected ground of disability, or as an unlisted analogous or arbitrary ground of unfair discrimination. The latter does appear more viable in light of the disadvantage suffered by these persons because of their conditions. Under the South African legal framework, reasonable accommodation for mental health conditions is based on two primary foundations: Firstly, reasonable accommodation is available to people with mental disabilities as an affirmative action measure; secondly, reasonable accommodation may possibly also be available to persons with mental health conditions in general, since it essentially constitutes a nondiscrimination principle. Reasonable accommodation in the comparative jurisdictions of the USA and the UK, on the other hand, flows primarily from their respective disability-specific legislation. To provide effective reasonable accommodation on the basis of mental health, several factors need to be considered in an interactive process between employer and employee. These include occupational health and safety, the intersection between reasonable accommodation and incapacity, the disproportionate-burden threshold, and the various forms of reasonable accommodation that may best suit the mental health condition in question, given its specific symptoms and diagnostic features. This study emphasises the importance of adequate and effective consideration of mental health conditions under the legal frameworks of jurisdictions worldwide due to the global prevalence of these conditions, their devastating effects, and the disadvantage experienced by those who suffer from these conditions. Based on the comparison with the USA and the UK, it is concluded that the South African legal framework in relation to mental health conditions needs to be urgently developed in order to promote clarity and certainty regarding the official legal position on these conditions, as well as to safeguard the rights and interests of employees with mental health conditions in the workplace. As an added, more practical contribution, the study concludes with a proposed draft code of good practice on the handling of mental health conditions in the workplace, a draft set of interpretative guidelines for the South African judiciary, Department of Labour, employers and employees in dealing with these conditions in the world of work, as well as a draft workplace policy on mental health conditions for potential adoption by employers.Item Open Access Die vertrouensverpligtinge van ondernemingsreddingspraktisyns: ’n regsvergelykende studie(University of the Free State, 2015-07) Jacobs, Lezelle Marianne; Henning, J.; Snyman-van Deventer, E.English: When the Companies Act 71 of 2008 came into effect it brought about a new era of corporate rescue for South African companies. Chapter 6 of the Act provides for a new corporate rescue scheme, known as business rescue. Business rescue replaces the previous South African rescue model, judicial management, contained in the Companies Act 61 of 1973. The key role player in the rescue scheme is, however, the business rescue practitioner. The practitioner is afforded with extensive powers and rights. He takes over control of the management of the company and the duty to rescue the company rests on his shoulders. It is, however, possible that the purposes of chapter 6 to protect the interests of all stakeholders can be frustrated through the incompetence, partiality and carelessness of the practitioner. The practitioner is placed in a position of confidence with a number of stakeholders including the company, shareholders, employees and creditors of the company. Section 140(3)(b) of the Act states that the practitioner has the responsibilities, duties and liabilities of a director of the company for the duration of the rescue proceedings. The responsibilities, duties and liabilities of directors are set out in sections 75, 76 and 77. These sections contain the quasi-codified fiduciary duties of directors and therefore make them applicable to the practitioner. The practitioner is therefore a fiduciary. There is, however, uncertainty regarding the legal position of the practitioner as fiduciary. For this reason it was necessary to establish the nature and extent of these duties. This study examined the practitioner’s duty to act with good faith as well as his duty to act with care and skill. In conclusion it is found that the practitioner is in a unique position and that his fiduciary duties are sui generis in nature. He owes his fiduciary duties to all the affected persons according to a ranking. It became clear that the protection of these parties’ interest will involve a careful balancing of interests. The study culminates in a code of conduct for South African business rescue practitioners. The code of conduct could act as a compass when the practitioner is confronted with a difficult ethical decision or dilemma.Item Open Access Bullying in the workplace : towards a uniform approach in South African labour law(University of the Free State, 2014-01) Smit, Dina Maria; Du Plessis, J. V.Bullying in the workplace is a kind of aggression that occurs where an individual or group intimidates, excludes, harasses, insults, mistreats or demeans another individual or group at work, either directly or indirectly. A complex power imbalance presents itself, in that the perpetrator uses formal or informal power over his or her victim to such an extent that the victim is almost powerless to defend him or herself. Bullying can occur from the top to the bottom, from the bottom to the top, or horizontally. Not all kinds of bullying give rise to illegal acts, but even if menial bullying continues over time, it can give rise to severe negative effects. Due to new digital developments in employment, the management of cyberbullying, as a form of workplace bullying, complicates the legal dilemma even further. Not only do bullied victims have to continue in a working relationship where the bullying took place, but depression, stress, anxiety, post-traumatic stress disorder and a plethora of physical illnesses also take their toll, as reflected in abnormally high turnover and absenteeism figures. If no timeous intervention occurs early during the bullying, severe psychological problems have been reported by bullied victims, which render them incapable to continue with work, or lead to summary resignations accompanied by claims for constructive dismissal. Low morale and negativity have been shown to be linked to workplace bullying and impact negatively on the organisation as a whole, and vicarious liability for the employer may follow. Due to the fact that there is no universally accepted definition for bullying and different jurisdictions place bullying on different continuums, it adds to the problem of regulating and preventing workplace bullying. The question has been asked whether there is a need to legislate employees into being “nice” to one another, but that merely shows the lack of knowledge about the notion and effects of workplace bullying. Sexual harassment is a form of human behaviour and is regulated extensively. With bullying four times more prevalent than sexual harassment, there is no reason why bullying should not be regulated also. Many countries, such as Sweden, Germany and France, have legislated bullying and there is a strong drive in the USA to have the Healthy Workplace Bill passed. Many states have introduced different versions thereof, but none have been passed. The USA treats bullying as a form of harassment, and no protection exists for employees who fall outside the scope of certain “classes”, unless, of course, the bullying amounts to criminal actions or tort action. The UK treats workplace bullying as a dignity violation and extensively uses antistalking law, in the form of the Protection from Harassment Act of 1997, to curb bullying. Australia views bullying from a health and safety perspective and, in South Australia, it is currently dealt with by means of Codes. There is a drive to eradicate bullying from the workplace on a national level through a new Code (dealing with workplace bullying), for which public commentary has recently closed. Little has however been done in South Africa to create awareness of, or deal with, this peril. The country is in dire need of a uniform approach to workplace bullying. It is not clear on which continuum bullying should be placed, but as our discrimination laws are not limited to certain “classes”, it is not suggested that separate legislation should be passed. The new Protection from Harassment Act could be used, as in the UK. Employers should embark on the creation and implementation of zero-tolerance policies in the workplace to deal with this pervasive problem. For too long the victims of workplace bullying have suffered silently at the hands of bullies.Item Open Access Legal comparison between the South African Close Corporation and the German "Gesellschaft mit beschränkter Haftung"(University of the Free State, 2006-05) Jaehne, Christoph; Henning, J. J.The GmbH and the close corporation within their respective legal contexts provide alternative legal options for small and medium sized business entities, giving them a simpler and less expensive legal form, thus satisfying the need for flexibility while guaranteeing liability limitations and continuity. While the maximum number of members in the GmbH is unlimited, the close corporation is restricted to ten members. Membership in the GmbH is open to natural and juristic persons alike. The close corporation is, generally speaking, only open to natural persons. Membership as such is expressed through shares in the GmbH and members' interests in the close corporation. The transfer of a share and a member’s interest is allowed. The regulations for transfer and restrictions vary. In both entities the members as such are the highest decision making organ. Regarding organs, the GmbH is more formally structured and has, as mandatory organs, the managing director and the shareholders' meeting. Such a strict distinction is not embodied in the CCA; and while the GmbH-members must appoint a managing director to represent the GmbH, the close corporation uses the partnership principle of mutua praepositio. Each member of the close corporation has the right to participate in the management of the affairs of the corporation. While for the GmbH articles of association are compulsory, in the close corporation it is up to the members whether they conclude an association agreement or refrain from doing so. The applicable legislative measures provide differently for the protection of the financial well-being of the entities. The GmbH as 'Kapitalgesellschaft' requires strict compliance with specific obligations imposed by its members regarding their share capital contribution, while for the close corporation various aspects of liability and external relations are equally important. The innovative liability solution found in the CCA is remarkable. Concerning transparency of financial matters the close corporation requires the position of an accounting officer, and through this achieves some kind of control with regard to the financial matters, which are otherwise an internal affair of the corporation. The GmbH is 'forced' to make its financial matters more transparent. Subject to specific conditions, companies are required to have their financial results audited and approved by a certified public accountant. In the African context it is noteworthy that the principal objectives of the African Union aim at accelerating political and socio-economic integration. Given the success of the close corporation this legal form, a Societas Africaea, utilized for smaller entrepreneurs, can play a role in achieving these goals. The reform process initiated through the SA DTI must take into account that the creation of wealth in South Africa is achieved by companies in which the close corporation plays an important part. Necessary reforms must therefore be pursued with precaution. A possible one-Act approach for South African company law is to be viewed critically as the differentiation between various types of enterprises should not easily be put aside. It will be interesting to see how the GmbH takes on the challenge of the new legal forms within Germany and the competition with similar foreign business forms now entering the German market as a consequence of the ECJ’s recent judgements and how the close corporation will develop within the context of a company law in the process of reform. It is also of relevance for the South African reform process to follow the developments in Britain. The close corporation has been commented on positively not only within South Africa. The recent discussion in the USA on the close corporation approach and its legal structure is of relevance here.Item Open Access Verteenwoordiging in 'n Suid-Afrikaanse maatskappyregtelike verband: 'n regshistoriese en regsvergelykende ondersoek(University of the Free State, 2008-09) Rabie, Pierre Jacques; HENNING, J. J.English: The general principles of the law of agency form the basis of representation in South African company law. A unique set of agency principles have however developed in company law as a result of specific needs that arose from the application of certain company law doctrines (for example the doctrine of constructive notice, ultra vires doctrine, doctrine of disclosure and the Turquand rule) in this field of study. An attempt is made to elucidate the contiguity of these doctrines. The common law position regarding agency was originally regulated by the Roman Dutch principle of direct agency. This was coupled with extensive regulations regarding the relationship between principal and agent. These regulations have not provided a solution to the questions regarding agency in a modern society. A very strong need for the development of South African agency law arose as a result of this. English law provided the source for the development of the South African law of agency. The result of the development is that the law of agency in South Africa has a Roman Dutch base, but is strongly influenced by English law principles in this regard. The hybridisation of the South African legal position has provided some solutions. It must however be noted that this process has also created numerous problems. The question can be posed whether the game is worth the candle. If the position regarding agency is considered in other jurisdictions as well as in the law of close corporations it is clear that the only solution seems to be that the legislature has to remedy the situation. This has however not been done in South Africa. The South African law of agency in a company context is plagued by many difficulties. Possible solutions for these problems are provided. The research has been done on a comparative basis. The legal positions in Australia, England and the USA have been selected for this purpose.