Abstract:
South Africa’s recently enacted Companies Act introduces a new business rescue
mechanism. Corporate rescue has the aim of resuscitating faltering companies. The
legal disciplines of labour, insolvency and corporate law interact during business
rescue proceedings. In this contribution the question is posed whether an
appropriate balance is being struck between employees’ and creditors’ interests in
this business rescue mechanism. The investigation is done against the background
of ILO and EU standards and South Africa’s labour and insolvency law
frameworks. The conclusion is drawn that the potential success that this rescue
mechanism may hold could be eroded due to the over-protection of employees in the
model adopted by South Africa.
