A Comparative Assessment of Employee Rights within South African, United Kingdom and Australian Corporate Rescue Legislation

Abstract

Many countries, including South Africa, have begun implementing legislative measures which encourage the rescue and recovery of financially distressed companies, rather than bringing the company’s existence to a close in a liquidation process. The underlying logic of business rescue is that a company experiencing financial difficulty can be turned around, and in the long run save jobs and be worth more as a going concern, as opposed to simply chopping it up and distributing the remaining assets to the creditors. In the short run however, the company’s lack of financial resources ensures that business rescue plays itself out in a context of tension between the competing interests of employees, employers and creditors, with the process intersecting matters of labour law, company law and insolvency law. Shifting societal attitudes around issues of fairness and ethics have led internationally and locally to enhanced employee protections in labour, corporate and insolvency law. The focus of this study is to assess and compare South African employee rights in the business rescue regime with similar regimes in the United Kingdom and Australia, along with making recommendations for improvement in a number of key areas.