The Western Cape High Court has ordered the eviction of over 160 illegal occupiers from Transnet-owned land at Culemborg in Cape Town by 30 September 2026. Most notably the Court did not require the City of Cape Town to provide emergency housing for those evicted, for a unique combination of reasons, including that the unlawfully occupied land, largely occupied by undocumented foreign nationals, was being used as a base from which opportunistic criminal activity was conducted.

Those travelling into Cape Town city centre from the northern suburbs and western seaboard will know the site well. For over a decade, there has been an informal settlement on Transnet land, immediately adjacent to the highway entering the city centre. After a prolonged period, Transnet brought proceedings to evict the unlawful occupiers. The City of Cape Town municipality was added as a respondent, on the assumption that the municipality, as the relevant local authority, would be required to provide emergency / alternative housing to the unlawful occupants, once they were evicted.

The area in question is infamous for crime. Criminals use the busy highway and area of slow-moving traffic, adjacent to the high security risk area, to their advantage. The Court pointed out that there have been over 100 instances of common robbery, or robbery using a weapon or firearm. There were multiple thefts from and attacks of vehicles, and theft of personal possessions. Over a nine-month period straddling 2024 and 2025, over 100 cyclists were attacked and/or robbed, including, tragically, an elderly cyclist attacked with a bottle, who succumbed to his injuries. When one motorist was forced to stop on the side of the road after having collided with a barrier, criminals pounced, compounding the stricken motorist’s misery, by relieving him of his cellphone.

Dozens of arrests have been effected for a myriad of crimes, including dealing in and possession of drugs, possession of unlicensed firearms, weapons and stolen property, and for criminal conduct including assault (including on a police officer), intimidation and possession of house-breaking implements. In scenes that mimic Hollywood, there are tunnels connecting the properties that make up the area, which are alleged to be used to store drugs and stolen goods.

Security in the area is so bad that when the legal teams and Judge Wille (the presiding Judge) inspected the area, the security team that accompanied the group refused to take them into certain portions, as their safety could not be guaranteed.

Given the sheer breadth of criminal activity, it was perhaps understandable that the unlawful occupants could not put up a substantive contradiction of the allegations of criminality. Instead, much reliance was placed on general denials, and on an expectation that the municipality would be required to give the unlawful occupiers emergency housing, automatically upon their eviction. Judge Wille disagreed. Emergency housing is not for the taking but must instead be determined in accordance with a number of factors and circumstances.

The Court found that an eviction is not inherently unjust or inequitable simply because there is no emergency housing. The unlawful occupiers gave themselves preferential treatment by unlawfully seizing the land, contrary to the rule of law, where such self-help was not sustainable in terms of our Constitution. This, said the Court, deprived Transnet of its Constitutionally protected property rights.

The Court acknowledged that it could not ignore the fact that the unlawful occupation of the land served as a base for criminal activity, a fact that was not seriously refuted by the unlawful occupiers. The Court found that in some cases, the unlawful occupation of the property in question was deliberate and motivated by the desire to exploit its location for the purposes of criminal activity.

Importantly, the Court considered the complex burden placed on the municipality when assessing a multitude of factors to determine if there is any available land for the purposes of emergency housing, and the transparent and lawful management of such property resources, whilst bearing in mind the many people on long waiting lists for affordable property – it would be unfair for the unlawful occupiers to be allowed to jump the housing queue, at the expense of lawful affordable housing requests.

Budgetary constraints and shortages of resources matter: national funding for emergency housing has been severely restricted (only for declared disasters), meaning that the municipality bears the burden of funding emergency housing. The ability to meet previous levels of funding has been significantly constrained.

In what some might find uncomfortable, the Court found that legal status of the unlawful occupiers (i.e. whether they are in the country legally or illegally) is a relevant factor when assessing whether emergency housing is just and equitable. Crucially, the Court found that there is no legal basis to contend that a person who has no entitlement to be in South Africa, is entitled to emergency housing assistance, as this would violate the rule of law. Home Affairs (whose engagement with the legal proceedings was, said the Court, “disappointing and regrettable”) is under a legal duty to intervene when emergency housing is sought by such persons.

Given the ‘departure’ from what many believed were principles that automatically applied to evictions, one gets the sense that the Judgment is likely to be appealed. However, the details of this particular case might make any attempt at an appeal, an uphill task.

The Judgment is bold, and its reasoning may well resonate with the majority of the public, who are likely to view the Judgment as a victory for common sense that is based on reasoned and sustainable legal principles. However, whether or not the Judgment survives subsequent evaluation by an appeals Court, remains to be seen.

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Dr Eric Levenstein unpacks the legal significance of recent successes in the business rescue space and explains why successful business rescues are an important contributor to the South African economy and where recent outcomes positively reflect the maturity of the South African business rescue framework.

Recent statistics published by StatsSA show that 225 companies were placed into liquidation in May 2026. In 2026 alone, 1116 companies have had their businesses terminated by the filing for liquidation, with the knock on effect of job losses and the closure of what were historically (for some years) sustainable and viable trading entities.

Many of these companies would have been financially distressed/insolvent for a significant period of time and where the possible rescue and restructuring of historical debt and the businesses of these companies were just left too late, and where a possible business rescue mechanism was just not considered early enough in the distressed time line of the company. The default position in these instances would be liquidation.

Liquidation unfortunately remains a very negative outcome for distressed companies in South Africa, and where we at Werksmans continue to advocate for the restructuring alternative of business rescue as a viable and workable alternative to the liquidation process.

It is vitally important that we speak (at every opportunity) about notable successes in the business rescue space and in order to ensure that we bolster and retain confidence in the business rescue mechanism which can allow for positive outcomes; namely to facilitate the rehabilitation and restructuring of a company in a manner that allows it to continue operating on a solvent basis, or failing that; to achieve a better return for creditors than what would be available in the event of the immediate liquidation of the company.

Werksmans Attorneys has been involved in two very high profile business rescue successes both of which were finalised last week and where the positive outcomes flowing from these rescues have no doubt reflected the effectiveness of the South Africa’s business rescue framework. So after 15 years since we first got our Business Rescue legislation in 2011, one needs to pause and take stock and ask oneself the important question –

Is South Africa’s business rescue framework finally coming of age?

Last week saw two significant milestones in South African business rescue. Murray & Roberts reached a major implementation milestone with the completion of its R1.27 billion Differential Capital transaction, securing approximately 2,600 jobs and preserving critical mining services businesses. At the same time, Group Five formally concluded its business rescue process after more than six years, with all secured, preferent and concurrent creditors paid in full or fully provided for, while preserving the vast majority of jobs and potentially even delivering a return to shareholders.

Together, these outcomes raise important questions about how business rescue is evolving in South Africa. Do these outcomes demonstrate that the business rescue regime is achieving what it was intended to do? What lessons can other distressed companies, lenders and investors draw from these restructurings? And what do these successes mean for confidence in South Africa’s corporate restructuring environment?

In principle, business rescue, if embraced and used at an early stage of distress, is a powerful and necessary tool for struggling companies. In many cases, by the time business rescue is considered, unfortunately, the business is no longer capable of being rescued. It is a mechanism built for intervention – not reaction –  business rescue is designed to operate at the point of financial distress, not financial collapse.

Rather than face the inevitable collapse into liquidation, if stakeholders support the business rescue practitioner and his/her efforts to restructure the debt, the companies’ workforce and its contracts in a manner that makes the business more effective and more profitable, there is no reason why the company cannot exit from its business rescue process with a credible, practical and workable plan, and where outcomes can be really good for all stakeholders. Either the company is restructured in a way that allows it to continue trading, or there is a wind down/sell off of the businesses/subsidiaries of the company to third parties which supports a financial distribution to creditors, and in some instances to shareholders, far better than one would ever have seen in a liquidation.

For the business rescue practitioner, he/she must carefully consider the requirement of the “reasonable prospect of rescue”. It requires a credible, supportable basis on which the company can be rehabilitated, whether through operational restructuring, the introduction of new capital, or a compromise with creditors. It is not satisfied by the mere hope that conditions might improve. It is up to the business rescue practitioner to persuade all stakeholders that if all parties work together, and where the business rescue plan is supported,  companies can be saved.

Looking at the outcome in Murray & Roberts and Group 5, the results speak for themselves.

Murray & Roberts

In one of the most significant corporate restructurings in recent South African history, Differential Capital Proprietary Limited and its consortium of investors, working with the company’s business rescue practitioners (Metis Strategic Advisors), concluded a transaction resulting in the acquisition of the equity of the mining division of Murray & Roberts Limited (in business rescue) for R1.27 billion.

The adopted business rescue plan gained 100% creditor approval in April 2026 and the transaction, which completed on 25 June 2026, secured the transfer of numerous local and foreign subsidiaries (in South Africa, Canada, Australia, Portugal, Chile and numerous other jurisdictions) to the Differential Capital-led consortium. The sale enables the business rescue practitioners to settle all secured debt and funding obligations. Importantly, the transaction preserves approximately 2,600 jobs and safeguards vital mining capabilities that will continue to contribute meaningfully to the South African economy.

Group 5  

In Group 5, the business rescue practitioners (Metis Strategic Advisors) of Group Five Limited and Group Five Construction Proprietary Limited (“Group Five“), announced last week the substantial implementation of their respective business rescue plans and which has now concluded their business rescue proceedings.

In March 2019, Group Five collapsed into business rescue with approximately R7 billion in creditor and contingent exposures, more than 2300 individual creditors, 119 active construction projects and close to 6000 employees employed in approximately 180 companies across 38 countries. At the time, it was estimated that an immediate liquidation of Group Five would result in secured creditors receiving as little as 65 cents in the Rand, and concurrent creditors no more than 3.4 cents in the Rand, not to mention the devastating impact that a liquidation would have on employment and the construction industry generally. At that time, there was no prospect for any shareholder recovery.

Group Five’s business rescue proceedings took the form of a structured wind down, with projects being completed, debtors being recovered, and key subsidiaries such as Intertoll Europe and Everite, being sold as going concerns. Over 60 entities and asset sales were completed within the business rescue process, and where a substantial number of jobs were retained.

As Dave Lake from Metis put it: “the process has over-achieved in its primary objectives:  maximising recoveries for creditors and lenders, saving jobs, and business entities, settling tax obligations, unlocking some value for shareholders, while stabilising and restructuring a highly complex group in an orderly manner“.

Various issues in the administration of the business rescue proceedings were dealt with, including resolution of litigation with certain shareholders, resolution of various creditors’ claims, as well as attending to other commercial aspects, which included the conclusion of financing agreements, and the disposal of Group Five’s subsidiaries and/or businesses.

In what is an incredible success story for business rescue in South Africa, not only have all creditors, including concurrent creditors, been paid in full (100 cents in the Rand), but it is expected that a surplus return will be delivered to shareholders as well. This is an exceptional outcome for a business rescue process.

In summary

The value of business rescue as a mechanism in South Africa cannot be ignored. Where it is used as the statute intended, it remains a workable option for a proactive and well-considered restructuring strategy. Business rescue remains one of the most effective mechanisms for preserving value in the South African economy and provides a structured framework within which businesses can reorganise, negotiate with stakeholders and, where necessary, compromise debts and gain access to new capital.

So, as we have seen in the Murray & Roberts and Group 5 examples, business rescue can work – it is a robust and effective mechanism focused on saving South African companies from complete financial and operational collapse.

It is hoped that in time to come, we will see more and more companies exit from business rescue on a similar basis, with job preservation being key and where companies (either as restructured or with new owners) can continue to contribute to the South African economy in a positive and meaningfully way.

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1. Introduction

1.1. For much of the past two decades, the conversation in South Africa’s private equity (“PE”) market has centred on primary fundraising, deal origination, and exits. The secondary market, involving the trading of existing interests in PE funds and the restructuring of fund portfolios, has largely remained an afterthought, a niche mechanism rarely discussed in public forums and even more rarely executed in practice.

1.2. That is beginning to change. And the global trajectory suggests South Africa would do well to pay close attention.

2. What are Secondaries?

2.1. The private equity secondary market encompasses transactions in which investors (limited partners, or (“LPs”) sell their existing interests in PE funds to third-party buyers before those funds reach their natural end of life or where fund managers (general partners, or (“GPs”) restructure their funds by transferring assets into a new vehicle, offering existing investors a choice between cashing out or rolling into the new structure.

2.2. These two broad categories, LP-led secondaries and GP-led secondaries, have very different origins and serve very different purposes, but both have become increasingly indispensable tools in the modern PE toolkit.

2.3. LP-led transactions are driven by investors seeking liquidity, like a pension fund that needs to rebalance its portfolio, an insurer facing regulatory capital constraints, or a finance institution seeking to recycle capital into new mandates. In these transactions, the LP sells its fund interest (often at a discount to the fund’s net asset value (NAV)) to a secondary market buyer, who acquires exposure to a more mature, de-risked portfolio of investments.

2.4. GP-led transactions are initiated by the fund manager itself. The most common structure is the continuation fund (or continuation vehicle) where the GP creates a new fund specifically to acquire one or more assets from an older fund, giving existing LPs the option to either cash out at current fair value or roll their interests into the new vehicle and participate in the asset’s further upside. This mechanism has become a vital exit pathway in environments where traditional routes such as stock exchange listings, trade sales, or secondary buyouts are constrained or unavailable, as has often been the case in South Africa.

2.5. A further variant, which we have advised on, and which is gaining traction globally is the locked box structure, where a sub-portfolio of assets within a fund is ring-fenced for a defined group of investors, effectively creating a bespoke investment vehicle within the broader fund architecture.

3. From Niche to Mainstream

3.1. The secondary market was once viewed with stigma, as a mechanism of last resort for funds in distress. That perception has largely been dismantled. What was once a backdoor exit has become one of the most sophisticated and actively growing segments of global private capital markets.

3.2. The numbers tell a compelling story. Global secondary market transaction volumes reached a record $162 billion in 2024, and volumes exceeded $200 billion in 2025 which is a trajectory that has confounded even optimistic projections from just a few years ago. By the first half of 2025 alone, global transaction volume had already reached $103 billion, representing a 51% increase on the same period in 2024.

3.3. On the fundraising side, capital commitments to dedicated secondary funds has seen exponential growth and the world’s largest ever private equity secondaries fund, Ardian’s Secondary Fund IX, closed on $30 billion in 2025 alone.

3.4. GP-led transactions have been a particular engine of growth.. Continuation vehicles now represent the dominant transaction type within GP-led deal flow, driven by a recognition among GPs and their investors alike that the continuation fund has become, a permanent fixture in the private markets landscape.

3.5. In the United Kingdom, historically the most active and sophisticated PE market in Europe, the secondary market has matured rapidly over the past decade. UK and European GPs have embraced continuation vehicles as a legitimate and increasingly preferred mechanism to retain high-quality assets beyond the life of an original fund, particularly where public market conditions are unfavourable for listing. Regulatory clarity, institutional secondary buyers, and a culture of transparency around fund governance have also made the London secondary market a reference point for global best practice.

4. The Future of South Africa’s Secondary Market

4.1. South Africa has one of the most mature and institutionalised PE industries on the African continent yet the infrastructure for secondary market activity remains underdeveloped. Most PE fund agreements have historically been drafted without contemplating the secondary market as an active tool of fund management. Institutional LPs have had limited options when seeking mid-life liquidity and GPs have had few established mechanisms to extend the life of their best assets without forcing a premature exit. However, the structural conditions for a more active South African secondary market are increasingly more favourable.

4.2. Several converging dynamics make South Africa a compelling candidate for secondary market growth in the years ahead. Many South African PE funds raised in the 2013–2018 years are now approaching or have exceeded their natural life cycles. GPs face pressure to return capital to LPs, yet public market conditions and the pace of M&A activity have generally not cooperated. The secondary market, both LP-led disposals and GP-led continuation structures, offers a credible and increasingly accepted solution.

4.3. South Africa’s institutional LP base, anchored by large pension funds, insurance companies and development finance institutions, is growing in sophistication. As these LPs mature in their private markets allocations, portfolio management tools such as secondary sales will become increasingly relevant. Regulatory requirements around capital allocation and liquidity management will only accelerate this trend.

4.4. For GPs managing high-quality assets who simply need more time, the continuation fund offers a compelling alternative to a forced or premature exit. Internationally, continuation vehicles have proven that GPs can retain their best assets, provide liquidity optionality to existing LPs, and attract new capital, all within a single, well-structured transaction. South African GPs with strong track records and quality portfolios are well placed to explore this structure.

4.5. Global secondary funds are increasingly looking beyond North America and Western Europe for deal flow. African markets, particularly South Africa, are on the radar of sophisticated secondary buyers who recognise the quality of assets and the opportunity for differentiated returns. A mature secondary market in South Africa would not only recycle capital more efficiently but would meaningfully improve the overall attractiveness of the asset class to both domestic and international investors.

5. Structuring Secondaries Transactions

5.1. The growth of secondary activity, in particular GP-led continuation funds, raises important legal and governance questions for South African legal practitioners.

5.2. We recently advised a major South African private equity fund on a complex GP-led follow-on transaction, in which a general partner sought to restructure assets across two encommandite partnership funds, effectively transitioning the investment portfolio from a first-generation fund into a continuation vehicle, while preserving the economic interests of existing limited partners and ensuring governance integrity throughout.

5.3. The transaction raised a range of issues that are likely to arise in any South African secondary or continuation fund context:

5.4. Where the same management team oversees both the transferring fund and the continuation vehicle, the transfer of assets is, in substance, a related-party transaction. This requires careful management, including independent valuation, full and specific disclosure to all affected limited partners, and the obtaining of informed consent. Disclosure alone is insufficient; affected investors must be placed in a position to give fully informed approval to both the terms of the transaction and the conflicts inherent in it.

5.5. In a related-party context, valuations conducted by the GP itself are unlikely to be regarded as sufficiently independent, regardless of the broad discretion typically afforded to GPs under partnership agreements. Best practice, and, we would argue, the applicable standard in any South African secondary transaction, requires an independent third-party valuation or fairness opinion confirming that the transfer price reflects fair market value and that the terms of the transaction are fair to existing limited partners.

5.6. Where fund structures incorporate locked box arrangements, the protections afforded to locked box limited partners are significant. No step which adversely affects their rights may be taken without their vote and, typically, a 75% supermajority approval. Any continuation fund or secondary transaction touching locked box assets must be structured to comply with these requirements as well.

5.7. Existing investors must be offered a meaningful choice between the option to roll over into the new vehicle and participate in future upside, or to exit at fair value and receive their cash proceeds. The information package provided to investors in connection with this election must be comprehensive, covering the rationale for the restructuring, the terms of the new fund, changes in economic terms (including fees, carry, and duration), the independent valuation and the valuation methodology, and include a full conflicts memorandum.

5.8. Where a fund’s governing documents do not contemplate an advisory committee (as is the case with a number of South African partnership agreements), consideration should be given to constituting an independent transaction committee of respected industry professionals, retired auditors, or former LP representatives to oversee the process, review the valuation, and confirm the fairness of the transaction. The committee’s report should accompany the election materials sent to investors.

5.9. These are not merely technical considerations and, in our experience, getting this right is what distinguishes a well-executed continuation fund from a contentious and reputationally damaging one.

6. Conclusion

6.1. South Africa is a market to watch. It has a sophisticated PE industry, a growing institutional investor base, a developed legal framework for limited partnership structures, and an increasing awareness, among both GPs and LPs. Of the importance of the secondary market.

6.2. The global experience is unambiguous: secondary markets deepen, mature and ultimately strengthen primary PE ecosystems. They improve capital efficiency, enhance LP liquidity, provide GPs with greater flexibility to maximise value, and attract new investors. They are not a sign of market stress but a sign of market maturity.

6.3. South Africa’s PE market is ready. What is needed now is the confidence to execute, the legal and governance rigour to do so properly, and the institutional knowledge to guide the market forward.

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A multi-billion dollar revolution in global private capital could arrive in South Africa.

South Africa’s private equity industry has long had a quiet problem: getting capital out can be harder than getting it in. Exits depend on a cooperative stock exchange, willing trade buyers and investors patient enough to wait out a fund’s full life. When none of those conditions are met, options run thin.

The secondary market is changing that — and the numbers behind it are extraordinary.

Global secondary transaction volumes reportedly hit a record $162 billion in 2024 and exceeded $200 billion in 2025. By mid-2025, volumes were already up 51% year-on-year. The world’s largest-ever fund established to invest exclusively in private equity secondaries, raised by French-founded Ardian (Ardian’s Secondary Fund IX), closed on $30 billion last year alone, showing that this is no longer a niche area but one of the fastest-growing areas in global finance.

Investor-led or manager-led

The secondary market takes two main forms, either investor led or fund manager led transactions.

When investor-led, an investor — such as a pension fund, that is rebalancing sells its fund interest to a third-party buyer before the fund reaches the end of its life. The buyer acquires a mature, de-risked asset. The seller acquires liquidity.

The second form is more impactful. A fund manager creates a continuation vehicle — a new fund designed to acquire assets from an older fund approaching the end of its life. Existing investors choose either to cash out at fair value, or to roll into the new structure and keep participating. There is no forced sale or forced premature exit and it allows more time for quality assets to reach their potential.

Once viewed with suspicion as a sign of distress, continuation funds have been rehabilitated. In the UK and across Europe, they are now often a preferred tool for sophisticated managers who are looking to hold winning assets for longer. The stigma is largely gone and been replaced by a market worth hundreds of billions of dollars annually.

South Africa’s opportunity

South Africa has one of the continent’s most mature PE industries. What it has lacked is exactly what the secondary market provides: an efficient mechanism to recycle capital and manage fund lifecycle flexibly.

The conditions for change are converging now. Many South African funds raised between 2013 and 2018 are at or beyond their natural end-of-life. Managers face pressure to return capital, yet listings are difficult, M&A is slow, and traditional exit routes remain constrained. The secondary market — both investor-led sales and GP-led continuation structures — offers a credible, proven answer.

South Africa’s institutional base is also maturing. Pension funds, insurers, and development finance institutions are growing in private markets sophistication. As they do, secondary sales will shift from an optional to an essential portfolio management tool. Meanwhile, global secondary buyers are actively hunting deal flow beyond North America and Europe. South Africa will be on their radar.

Careful implementation

Secondary transactions involve complex issues and require careful implementation.

GP-led continuation funds involve genuine conflicts: the same manager oversees both the fund selling the assets and the fund buying them. That demands independent valuation, real investor choice, and comprehensive disclosure — not just disclosure of transaction terms, but disclosure of fee changes, conflicts, and valuation methodology. Investors must be able to give truly informed consent and not merely rubber-stamp a process.

Where fund agreements lack a formal advisory committee, best practice is to appoint an independent transaction committee to oversee the process and confirm fairness. The difference between a clean transaction and a contentious one almost always comes down to process rigour and the quality of investor communication.

The bottom line

Secondary markets emerge from maturity. Major PE centres with developed secondary markets have benefitted greatly from, increased liquidity and have managed to attract new capital as a result.

South Africa’s market is well placed and institutional sophistication is building. What remains is the confidence to act.

Secondaries are ready to make a big impact.

The author advises on private equity fund structuring, secondary transactions, and continuation vehicles.

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Business rescue has become a cornerstone of South African corporate insolvency law. Introduced by Chapter 6 of the Companies Act 71 of 2008 (“the Act”), it seeks to rehabilitate financially distressed companies while preserving value for creditors, employees and shareholders. For creditors seeking to place a company under supervision, boards of distressed entities may try to obstruct the process, which runs the risk of undermining the purpose of business rescue proceedings.

A recent judgment of the North West Division of the High Court provides important guidance on two deceptively simple but significant questions: when does voluntary business rescue actually commence, and can a voluntary business rescue be used to thwart a pending compulsory business rescue application? The judgment provides welcome certainty for creditors and reinforce the integrity of South Africa’s business rescue framework.

Zizwe Open Cast Mining Proprietary Limited (“Zizwe“) rendered contract mining services to Lethabo Minerals Proprietary Limited (“Lethabo“), a holder of a mining right over a chrome mine near Rustenburg. Following the termination of their commercial relationship, Lethabo acknowledged that there was a substantial debt owing to Zizwe that remained unpaid. Zizwe instituted an urgent compulsory business rescue application under section 131(1) of the Act.

Lethabo filed an answering affidavit that was conspicuously limited in scope. The answering affidavit failed to dispute either the indebtedness or its quantum and produced no financial information demonstrating solvency or a viable path to recovery. Furthermore, Lethabo did not (at that stage) take issue with either the qualifications or the independence of the business rescue practitioner nominated by Zizwe.

Shortly before the hearing, Lethabo informed both Zizwe and the Court that Lethabo’s board had adopted a written resolution two days prior to the hearing voluntarily commencing business rescue proceedings. Lethabo stated that the requisite CoR123.1 form had been lodged with the Companies and Intellectual property Commission (“CIPC“), thereby commencing business rescue proceedings by operation of law and rendering Zizwe’s application moot.

Section 129 of the Act permits a company’s board to resolve to commence voluntary business rescue where the company is financially distressed and there is a reasonable prospect of rescuing it. The resolution must, however, be filed with the CIPC, together with the prescribed notices and supporting documentation.

First mover advantage

The first substantive issue before the Court was whether the mere electronic submission of documents to the CIPC constitutes “filing” for purposes of section 129 of the Act. At the time of the commencement of the hearing, Lethabo had uploaded the relevant documents electronically, but the CIPC had not yet reviewed, accepted or confirmed the filing. Formal confirmation from the CIPC was only issued during the course of the hearing.

In terms of section 132(1) of the Act, business rescue proceedings commence either when (1) a company files a resolution to place itself under supervision in terms of section 129(3) of the Act or (2) an affected person applies to court for an order placing the company under supervision in terms of section 131(1). In relation to the latter instance, previous court decisions have held that in order for a compulsory business rescue application to be made, the application must be issued by the Registrar, served on the company and CIPC, and that affected persons are notified.

Zizwe’s counsel argued that Chapter 6 of the Act prohibits a board from passing a voluntary business rescue resolution as contemplated in terms of section 129 once a compulsory application is made. While the Court did not agree with this contention, it did accept that the Act does not permit parallel business rescue processes. Instead, the commencement date of business rescue proceedings is critical because it informs the date of inception of the moratorium, the practitioner’s authority and the rights of creditors.

Section 129(2)(b) of the Act sets out that a board resolution to commence business rescue is of no force and effect until it has been filed with the CIPC. In this regard, CIPC Practice Note 3 of 2021 was issued in terms of regulation 4 of the Regulations to the Act, which confirms that the date of filing of business rescue will be the date that the relevant information is confirmed as correct by a member of the CIPC team. Furthermore, a confirmation letter from the CIPC is required before a voluntary business rescue resolution can be considered filed, within the meaning of section 129(2)(b). In this case, the CIPC certificate of confirmation was only forthcoming during the hearing, and clearly indicated a commencement date subsequent to the date on which Zizwe’s compulsory business rescue application was made.

Tactical or abusive?

The Court considered whether the manner in which Lethabo’s board acted constituted an abuse of the business rescue procedure. In circumstances where Lethabo’s board had been aware of the pending business rescue application for at least two weeks prior to the hearing, and where Lethabo’s answering affidavit did not mention any intention to pursue voluntary business rescue or an objection to Zizwe’s nominated practitioner, the Court was unsurprisingly critical of Lethabo’s conduct.

The Court found this conduct constituted an abuse of process: the resolution was adopted not in genuine pursuit of rehabilitation, but as a tactical manoeuvre to retain control over the identity of the business rescue practitioner and to derail the court-driven proceedings. As such, the Court held that it was just and equitable to set aside the resolution commencing the business rescue proceedings.

Conclusion

The judgment has several practical implications. First, boards of directors creditors should not assume that a board resolution or proof of electronic submission is sufficient to commence business rescue proceedings. They should verify that the CIPC has formally accepted and confirmed the filing. Second, boards seeking to secure a tactical advantage by adopting a resolution to thwart a compulsory business rescue application must understand that this is a high risk and low reward strategy. Third, the judgment confirms that Chapter 6 is not a tactical instrument: directors who invoke it for purposes other than genuine rehabilitation expose themselves to adverse findings.

Ultimately, this decision reinforces the procedural integrity of business rescue, while providing much-needed certainty for creditors, companies and practitioners alike.

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Constructive dismissal remains one of the more difficult claims to prove in South African labour law. Employees must do far more than demonstrate that the workplace was unpleasant or that their relationship with management had deteriorated. The legal threshold is a demanding one: the employer must have made continued employment objectively intolerable.

The recent CCMA decision in Ramugondo v Rand Water provides an important reminder that employers can cross that threshold not only through active misconduct, but also through a failure to intervene when workplace bullying is allowed to flourish.
The employee had initially enjoyed a positive working relationship with her manager. She was selected to attend executive meetings, received praise from senior leadership and appeared to have a promising future within the organisation. That changed dramatically within a matter of months.

The commissioner accepted evidence that the employee was systematically undermined by her line manager. Work was taken away from her and allocated to her graduate. She was excluded from meetings, publicly criticised in front of colleagues and clients, labelled incompetent and repeatedly humiliated. Her manager bypassed her entirely, communicated through her subordinate and created situations where she was deliberately set up to fail. The evidence painted a picture of sustained psychological erosion rather than isolated incidents of poor management.
Importantly, this was not simply a personality clash.  The employee attempted to resolve matters internally. She raised concerns directly, lodged a formal grievance and participated in the employer’s internal processes. However, those processes moved slowly. Meetings were delayed, prescribed timeframes were not met and the conduct complained of continued unabated while the grievance remained unresolved. By the time the employer eventually escalated the matter, the employee had already resigned.  This proved decisive.

Relying on the Constitutional Court’s decision in Strategic Liquor Services v Mvumbi NO, the commissioner reaffirmed that the test for constructive dismissal is not whether resignation was literally the employee’s only option. Rather, the question is whether the employer made continued employment objectively intolerable. That assessment requires consideration of the employer’s conduct as a whole, viewed reasonably and objectively.

The commissioner had little difficulty concluding that the manager’s conduct was ‘belittling, humiliating, degrading, cruel, uncalled for and completely unbecoming of a senior manager’. Significantly, the employer was aware of the employee’s complaints and the deteriorating working environment but failed to respond with sufficient urgency. In the commissioner’s view, it was this combination of persistent managerial misconduct and organisational inaction that ultimately destroyed the trust relationship between employer and employee.

One aspect of the award is particularly noteworthy.  Employers frequently defend constructive dismissal claims by arguing that employees resigned before internal procedures had been completed. Rand Water advanced precisely that argument, pointing out that another employee who had lodged a similar grievance was eventually transferred to another department.  The commissioner was unpersuaded.
By the time the grievance eventually reached its final stage, the employee had already reached her breaking point. The employer’s own delays had contributed to that outcome. An employee who has exhausted the remedies reasonably available to them cannot be expected to endure ongoing abuse indefinitely while waiting for a process that shows little sign of reaching a conclusion. Internal grievance procedures remain important, but they cannot become an excuse for organisational paralysis.

The remedy is equally significant. Rather than awarding compensation, the commissioner ordered reinstatement. Although constructive dismissal cases often result in compensation because the employment relationship has irretrievably broken down, the commissioner found that the real source of the intolerable conditions was the employee’s manager rather than the employer itself. Since another employee had already been transferred away from the problematic reporting line, there was no reason the applicant could not similarly be placed elsewhere within the organisation. Reinstatement was therefore both practical and appropriate.

For employers, the lessons are clear.  Workplace bullying is not merely an interpersonal issue or a leadership challenge. Left unchecked, it can expose an organisation to significant legal risk. More importantly, employers cannot rely on the existence of grievance procedures if those procedures are allowed to stagnate while the complained-of conduct continues. Policies do not protect employers; prompt, effective intervention does.

The message from Ramugondo is a simple but important one. Constructive dismissal is rarely established by a single incident. It is often the cumulative effect of persistent misconduct, organisational indifference and delayed intervention. When employers know that an employee is being subjected to ongoing humiliation and fail to act decisively, silence itself can become part of the intolerable working environment.

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The Labour Court in Nxele v Chairperson of the Disciplinary Hearing: Mudau NO and others considered yet another chapter in the protracted dispute between Mr Nxele and the Department of Correctional Services (“DCS“). The matter arose after the applicant challenged the extension of his precautionary suspension and sought to halt an internal disciplinary hearing following his invocation of section 188A(11) of the Labour Relations Act 66 of 1995 (“LRA“).

While the Court dismissed the challenge to the extension of the suspension on jurisdictional grounds, the judgment is noteworthy for its detailed consideration of section 188A(11), particularly in light of recent Labour Appeal Court (“LAC“) judgments concerning whistleblower protection under the Protected Disclosures Act 26 of 2000 (“PDA“).

The Court rejected the applicant’s challenge to the extension of his suspension, holding that he had failed to establish a proper jurisdictional basis for the Labour Court to grant the declaratory relief sought. The Court reiterated that its jurisdiction is limited by statute and that it does not possess a general supervisory power over all employment-related disputes. It further held that the Public Service Precautionary Suspension Guide is a policy instrument incapable of founding a contractual claim and that, in any event, the relevant regulatory framework authorised the chairperson to determine whether a suspension should continue beyond the prescribed 60-day period.

Section 188A(11) of the Labour Relations Act 66 of 1995

The more significant aspect of the judgment concerns the Court’s treatment of section 188A(11) of the LRA. The provision allows an employee or employer to require a pre-dismissal arbitration where the employee alleges in good faith that the holding of an internal disciplinary inquiry contravenes the PDA.

In considering the effect of a section 188A(11) request, the Court revisited its earlier decision in Nxele I. In that case, the Labour Court held that once an employee invokes section 188A(11), the request is effectively peremptory. The employer is obliged to institute a pre-dismissal arbitration, and any pending internal disciplinary proceedings must cease. The Court emphasised that the provision serves an important protective function by safeguarding employees who make protected disclosures and by avoiding parallel litigation.

Subsequent decisions sought to confirm this approach. In Mtweta v Transnet Freight Rail and Operating Division of Transnet (SOC) Limited, relying on Mamodupi v Property Practitioners Regulatory Authority and Another, the Labour Court held that a mere allegation of a protected disclosure was insufficient. According to that approach, an employee was required to demonstrate, at least prima facie, that a protected disclosure had been made and that a causal link existed between the disclosure and the alleged occupational detriment. The Court further held that a disciplinary chairperson was obliged to halt proceedings only where the employee had already approached the CCMA, bargaining council or Labour Court for relief under the PDA.

The present judgment notes, however, that the LAC has since provided authoritative clarification in Nxele IV. The LAC confirmed that an employee invoking section 188A(11) bears no obligation to prove that the disciplinary proceedings in fact contravene the PDA. Rather, it is sufficient that the employee only allege, in good faith, that such a contravention exists. The threshold is therefore lower than that suggested in Mtweta. The focus is on the bona fides of the allegation rather than proof that an occupational detriment has occurred.’

The Court also considered the question of who determines whether the jurisdictional requirements for a section 188A(11) inquiry have been met. In Matlala v Foskor Proprietary Limited and Others, the Labour Court held that this determination fell to the arbitrator appointed under section 188A. However, the LAC’s subsequent decision in Industrial Development Corporation of South Africa v Modika clarified that the initial jurisdictional determination belongs to the CCMA or relevant bargaining council itself. The administrative body’s decision to accept or reject a section 188A(11) referral constitutes the relevant jurisdictional ruling and remains reviewable on ordinary review principles. Courts should therefore refrain from anticipating or usurping that determination.

Applying these principles, the Court held that the General Public Service Sectoral Bargaining Council (”GPSSBC”) had not yet made a decision on the applicant’s section 188A(11) request. At the time of the hearing, the bargaining council had merely acknowledged receipt of the referral. It was therefore inappropriate for the Court to compel the conversion of the disciplinary hearing into a section 188A(11) inquiry or to otherwise interfere with a determination that falls within the statutory competence of the GPSSBC.

The Court concluded that once a section 188A(11) referral has been lodged, internal disciplinary proceedings are, at the very least, paused pending the CCMA or bargaining council’s decision. Should the referral be accepted and enrolled, the internal disciplinary process falls away and is replaced by a pre-dismissal arbitration. If the referral is rejected, the employee may challenge that decision or submit to the disciplinary process. The applicant’s request for final interdictory relief was accordingly dismissed.

The judgment provides important guidance on the operation of section 188A(11) and the interaction between the LRA and the PDA. Most significantly, it confirms that an employee invoking section 188A(11) is not required to establish the merits of an alleged protected disclosure at the outset. Instead, the employee need only allege in good faith that the disciplinary process constitutes an occupational detriment. The judgment further clarifies that the CCMA or bargaining council, rather than the employer, disciplinary chairperson or Labour Court, is responsible for making the initial jurisdictional determination regarding the referral. In doing so, the Court reinforces the protective purpose of section 188A(11) while respecting the statutory functions assigned to dispute-resolution bodies.

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Section 197 of the Labour Relations Act has long been one of the most misunderstood and misapplied provisions in South African labour law. Employers frequently assume that because a new contractor introduces different technology, different management structures or new operational methods, the incoming business is fundamentally different from its predecessor. The Labour Appeal Court’s recent decision in Electro Hydro World (Pty) Ltd v Murray & Roberts Cementation (Pty) Ltd and Others serves as a timely reminder that the enquiry is far more practical than that.

The dispute arose after Sibanye terminated Murray & Roberts Cementation’s contract to operate and maintain a grout plant at one of its mining operations following a competitive tender process. Electro Hydro World secured the new contract and argued that it would be operating a substantially different business. It intended constructing two larger, more technologically advanced grout plants, implementing different shift structures, using fewer employees and supplying much of its own equipment.  On that basis, Electro Hydro maintained that section 197 was not triggered and that it had no obligation to take over the employment of the 63 employees previously engaged by Murray & Roberts.

Both the Labour Court and, on appeal, the Labour Appeal Court disagreed.  In dismissing the appeal, the Labour Appeal Court reaffirmed an important principle that has consistently emerged from section 197 jurisprudence: courts are concerned with substance rather than form.

The starting point remains the familiar three-stage enquiry. There must first be a transfer from one employer to another. Secondly, what is transferred must constitute a business or part of a business. Thirdly, that business must be transferred as a going concern. Whether those requirements are met is determined objectively by examining the reality of the transaction rather than the labels the parties choose to attach to it.

What made this judgment particularly significant was the court’s emphasis on identifying the true economic activity being performed.  Although Electro Hydro was introducing larger plants, updated technology and different operational processes, the essential commercial reality remained unchanged. Before the tender, Murray & Roberts operated grout plants that produced grout and pumped it underground for Sibanye’s mining operations. After the tender, Electro Hydro performed precisely the same economic activity for precisely the same client using the same utilities, raw materials and underground infrastructure provided by the mine.  The fact that the service would now be delivered more efficiently, or at greater scale, did not alter the underlying business.

Equally important was the court’s treatment of assets. Electro Hydro argued that many assets had not transferred, including computers, software, furniture, printers, tools and other equipment that it regarded as essential to its operations.  The Labour Appeal Court rejected that argument. Section 197 does not require every asset used by an outgoing contractor to pass to the incoming contractor. The relevant question is whether the assets necessary to continue the business transferred. Here, the core operational infrastructure belonged to Sibanye and remained available to the incoming contractor. The office equipment retained by Murray & Roberts was peripheral rather than fundamental to the continuation of the business.

This aspect of the judgment is likely to have broader implications across outsourced services and mining contracts.  Businesses frequently redesign operations when taking over contracts. Technology improves. Staffing models evolve. Automation increases. None of these developments necessarily prevent section 197 from applying.  The real enquiry remains whether the underlying economic entity continues to exist despite those changes.

For employers, that distinction matters.  Winning a tender does not automatically mean that a contractor starts with a clean slate from an employment perspective. Equally, simply changing the way work is performed will not necessarily avoid the automatic transfer provisions contained in section 197.

The judgment reinforces that courts will adopt a practical, commercially realistic approach. They will examine what business is actually being carried on before and after the transaction, identify its essential operational characteristics and determine whether those characteristics have remained intact. If they have, section 197 is likely to follow, regardless of new technology, different equipment or revised organisational structures.

For organisations involved in outsourcing, insourcing or competitive tender processes, Electro Hydro World is a valuable reminder that section 197 cannot be avoided through careful drafting or operational redesign alone. If the same business continues in different hands, and similar assets are used to perform the business activity, the law is likely to recognise exactly that.

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By its very nature, death is tragic. The death of a loved one evokes deep feelings of grief. These feelings may be exponentially compounded by other feelings – such as anger, frustration, and despair – where the circumstances surrounding or leading up to the death of a loved one are unclear. To obtain the required clarity, it may sometimes be necessary to initiate inquest proceedings.

Such will be the case in September 2026, when inquest proceedings into the death of Anele Tembe are expected to commence in the Cape Town Magistrates Court (following a postponement of the proceedings on 13 July 2026).

Ms Tembe died in April 2021 after falling from a hotel room (on the 10th floor) that she shared with her now-deceased fiancé, Kiernan “AKA” Forbes, a well-known rapper who was subsequently murdered in February 2023. Following Ms Tembe’s death, questions arose about whether her death was the result of suicide or murder. Seeking clarity about the circumstances of her death, Ms Tembe’s family approached the authorities, who eventually initiated the anticipated inquest proceedings.

But what is an inquest and how does it differ from other legal proceedings?

When a person dies from unnatural causes, the police are required to investigate such a death to determine whether it was caused by the commission of a crime. Once they have concluded their investigation, the police must submit a report and any supporting documents (such as witness statements and any forensic reports) to the National Prosecuting Authority (NPA) which must then decide whether there is a prosecutable criminal case in relation to the death. If the NPA elects not to prosecute, the report must then be submitted to a magistrate. If the magistrate, after reviewing the report, determines that a death has occurred and is not due to natural causes, inquest proceedings must be initiated (subject to any directions from the Minister of Justice).

Inquests are judicial proceedings in which the court is tasked with investigating the circumstances and cause of the death of a person where it appears that such death was not due to natural causes. The courts have stated that the purpose of holding an inquest is to investigate the circumstances of death seemingly occurring from unnatural causes, where the NPA has declined to prosecute. The courts have also stated that inquest proceedings are intended to promote public confidence and to reassure the public that all deaths from unnatural causes will receive proper attention and investigation so that, where necessary, appropriate measures can be taken to prevent similar occurrences and so that persons responsible for such deaths may, as far as possible, be brought to justice.

Unlike civil law or criminal law proceedings – and because of their inherently investigative function – inquest proceedings are usually conducted in an inquisitorial manner, with the presiding officer playing an active role in questioning witnesses. Although inquest proceedings differ from the other types of proceedings, the courts have stated that they should be conducted more in line with criminal proceedings than civil proceedings. However, unlike criminal proceedings, the aim of inquests is not to determine any person’s guilt beyond a reasonable doubt, nor is it to enforce a person’s rights and obligations on a balance of probabilities, as in civil law proceedings.

The nature of the witnesses that may be required in inquest proceedings will differ depending on the unique circumstances of each case. Generally, however, potential witnesses may include relatives of the deceased, eyewitnesses, expert witnesses (e.g. forensic specialists), investigating officers (from the police), and any other person/s with knowledge about the circumstances of the death.

The Inquests Act 58 of 1959 provides that once all the evidence has been heard and evaluated, the presiding officer must make a finding on the following facts, which must be explicitly recorded in the inquest judgment: (a) the identity of the deceased person; (b) the cause or likely cause of death; (c) the date of death; and (d) whether the death was caused by any act or omission seemingly involving a crime by any person. Notably, if the presiding officer is unable to make a finding on any of these facts after having considered all the evidence, they must record that in their judgment. Lastly, the Inquests Act also provides that the judgment and transcribed record of the inquest proceedings must be submitted to the NPA, which must then consider whether any individual/s should be prosecuted in criminal proceedings.

While the inquest into the death of Ms Tembe has yet to commence, an inquest into the deaths of 21 youths, who died at a tavern in KuGompo City (formerly East London) on 26 June 2022 has recently concluded. On 10 July 2026, the KuGompo City Regional Court (sitting in Mdantsane) handed down judgment in inquest proceedings intended to provide clarity about the cause and circumstances of the youths’ deaths. As required by the Inquests Act, the court established the identities of the deceased youths, the cause/s of their deaths (i.e. crush asphyxiation), the date of their deaths, and the acts and omissions that led to their deaths (including the people who committed them). The court found that there was prima facie evidence that several individuals – including the tavern owners, a former bouncer at the tavern, a police officer, and an official of the Eastern Cape Liquor Board – collectively caused or contributed to the occurrence of the deaths. Consequently, the court referred the findings to the NPA, which must now decide whether to prosecute the responsible individuals.

Ultimately, inquest proceedings cannot undo the tragedy (and associated grief) of deaths occurring by unnatural causes. What inquests can do, however, is to help families, the public, and the justice system make sense of the circumstances surrounding unnatural deaths and whether any individual/s should be held accountable. In this way, it is hoped that grieving families might begin to find some semblance of closure.

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