Summarise in simple english:

Question

In the case of holding companies, the Tribunal regrettably seemed to defer
uncritically to the Commission and thus failed to take account of the fact that a holding
company and a subsidiary are distinct corporate entities. The mere fact that the
holding company owns the shares of a subsidiary does not establish a case against
the former. Indeed, the only basis by which the Tribunal could come to this conclusion
was by way of reference to s 59 (3)(A) of the Act; that is that the Tribunal’s finding of
liability for contravention of s4 of the Act was not the only basis for the joinder of a
holding company because the latter could also be joined on the basis that the
Commission sought an administrative penalty in terms of s 59(3)A of the Act.
Regrettably this is an extremely ill-considered justification for such a decision in that
this section was only introduced with effect from 12 July 2019, that is after the referral.
It was clear that the section does not operate retrospectively. Besides, no suggestion
was made by the Commission in the referral affidavit that the purported joinder of the
holding companies concerned was pursuant to the provisions of s 59(3)(A) of the Act.
In the case of holding companies, the Tribunal regrettably seemed to defer
uncritically to the Commission and thus failed to take account of the fact that a holding
company and a subsidiary are distinct corporate entities. The mere fact that the
holding company owns the shares of a subsidiary does not establish a case against
the former. Indeed, the only basis by which the Tribunal could come to this conclusion
was by way of reference to s 59 (3)(A) of the Act; that is that the Tribunal’s finding of
liability for contravention of s4 of the Act was not the only basis for the joinder of a
holding company because the latter could also be joined on the basis that the
Commission sought an administrative penalty in terms of s 59(3)A of the Act.
Regrettably this is an extremely ill-considered justification for such a decision in that
this section was only introduced with effect from 12 July 2019, that is after the referral.
It was clear that the section does not operate retrospectively. Besides, no suggestion
was made by the Commission in the referral affidavit that the purported joinder of the
holding companies concerned was pursuant to the provisions of s 59(3)(A) of the Act.
This finding disposes of the case brought against first respondent, the twenty
fourth respondent and twenty sixth respondent. Furthermore, the fact that the sixth
respondent clearly stated on affidavit that neither Katz nor Friedman was employed
by it but in fact were employed by the twenty eighth respondent and that this had been
clear from the papers before this Court justifies a similar conclusion that there was no
basis for the joinder of the sixth respondent. The Commission, knowing these facts
and knowing therefore that it was the twenty eighth respondent who employed the said
Katz and Friedman, should have desisted from attempting to join the sixth respondent.

Answer 1

In this case, the Tribunal wrongly accepted the Commission's arguments without questioning them. They didn’t recognize that a holding company and its subsidiary are separate companies. Just because a holding company owns shares in a subsidiary does not mean it is automatically responsible for any wrongdoing by that subsidiary. The Tribunal based its decision on a section of the law, s 59 (3)(A), which only came into effect after the case had started, and this section does not apply to past cases. Additionally, the Commission did not claim that they were including the holding companies based on this new law in their documents.

Because of this, the conclusions made against some of the companies in the case are no longer valid. Also, it was clear from the evidence that the sixth respondent did not employ the people in question (Katz and Friedman); they worked for another company (the twenty-eighth respondent). The Commission should not have included the sixth respondent in the case since they knew who really employed Katz and Friedman.