Court hears of possible retrenchment of Putco drivers

2015-07-02 13:45


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Johannesburg - There was a good chance the Putco employees who had not been transferred to other parts of the business would be retrenched if Autopax did not incorporate them into their own business, the Labour Court in Johannesburg heard on Thursday.

Submissions by Putco and Autopax's legal representatives differed on whether the latter could be obliged to employ all affected Putco employees, since it did not involve a take-over, but rather Putco giving up certain routes.

The court heard 235 drivers had been affected by Putco's decision to cancel three of its contracts - in Tshwane, Sedibeng and Ekurhuleni municipalities - which affected commuters using the Mamelodi, Meyerton and Kathorus routes.

Only 141 of them had been transferred to other Putco operations. Prasa subsidiary Autopax stepped in to replace Putco on the affected routes and has hired 58 of the affected Putco drivers.

The future of the outstanding 94 depended on the court's judgment on whether or not Autopax was legally obligated to employ them.

Autopax legal representative Puke Maserumule told the court the company was not obligated to hire Putco's employees.

'An exercise in futility'

Based on the available facts, Putco had terminated its contract and it was not a contractual transfer of services "in the true sense of the word".

"There isn't a transfer, because Putco retains its primary business. Giving up a few routes doesn't change that; the business of Putco is still carrying on."

Maserumule said their submission was that the court should not concern itself [with this matter], as "it is an exercise in futility".

"There is no transfer, because the contract doesn't exist, so we dismiss the issue."

He said Putco had voluntarily surrendered its route permits, because they were no longer profitable.

"Putco has given up the contract, it is not being taken over," he told the court.

'We may not have sufficient drivers'

"Autopax is not a company that seeks to take over service without its own key assets. It has the necessary and required number of buses to run the service.

"We may not have sufficient drivers and may need to hire some of the Putco drivers," he said.

Anton Myburgh, representing Putco and the SA Transport and Allied Workers Union (Satawu), argued that Autopax would be gaining intangible assets including the company's bus timetables, fare structure, eight routes and 25 000 customers, as well as three depots, including the Mamelodi one with fuel tank facilities.

"Components of Putco's business have found their way into Autopax's business.

"Was Putco's operation an autonomous economic entity? Yes. Is it continuing in the same way? Yes," Myburgh said.

Maserumule argued the 25 000 commuters were not obliged to use their buses and could possibly use other modes of transport.

"Buses are but part of a broader  transport structure [available to commuters]," he said.

The bus routes, fare structures and timetables were not a Putco-owned asset, but subject to consumer trends and demand, he said.

Judgment was reserved.

Read more on:    autopax  |  putco  |  johannesburg  |  transport

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