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Saturday, 16 September 2017 12:43

Personal Finance reports that employees whose income is “garnisheed” to pay off their debts can breathe easier thanks to new legislation that was assented to recently.  On 31 July, President Jacob Zuma signed into law the Courts of Law Amendment Act, which amends the Magistrates’ Courts Act. (This article does not indicated when the Amendment Act will come into operation). The gazetted Act can be read at http://www.justice.gov.za/legislation/acts/2017-007.pdf

The results of a Constitutional Court ruling, the amendments provide South Africans with greater protection against emoluments attachment orders (EAOs), the issuing and management of which have been poorly regulated in the past.

An EAO is an order issued via the courts by a creditor on an indebted worker’s employer, known as the “garnishee”.  It compels the employer to deduct money from the worker’s salary or wage to pay the creditor.  Previously, EAOs were authorised by the clerk of the court, regardless of where employees worked or lived, or whether they were present to defend themselves.  Any number of creditors could demand such orders, without well-defined limitations.

“This lack of control gave credit providers extensive power to garnish workers’ salaries or wages, with little consideration for their ability to survive or their constitutional right to justice.  The new law affords employees the opportunity to defend themselves and relieves the economic burden imposed on them,” says Arlene Leggat, a director of the SA Payroll Association.  “

The law imposes a limit on the total amount that may be deducted, which can be no more than 25% of a worker’s salary or wage, regardless of the number of active EAOs against them.  Leggat indicated:  “Before, there was no limit and I’ve personally seen workers go home penniless, because their entire income was attached to debts.  While everyone has a responsibility to pay their creditors, the situation was unsustainable.”

The legislation does not apply retrospectively, meaning that EAOs already in place are not affected.  The 25% limit applies to basic income and excludes additional remuneration for overtime or other allowances, meaning that such additional remuneration cannot be garnished.  Further, an EAO must be authorised by a magistrate – not the clerk of the court – at a court that has jurisdiction.

Before approving the order, the magistrate must consider whether the order is just and equitable, taking into account factors such as the size of the debt, the worker’s income and necessary expenses, and any existing EAOs.

Another protective mechanism is a clause that prohibits anyone from requiring a credit applicant to consent to a judgment, instalment order or EAO prior to the granting of a loan.  Those doing so may be fined or imprisoned for up to three years.  The same penalty applies to anyone who fraudulently obtains or issues a judgment, instalment order or EAO.

Payroll practitioners need to familiarise themselves with all the amendments, Leggat says.  “It has a major impact on how they manage EAOs and their service to employees.  Employers who are legally obliged to enforce garnishments orders will also benefit from their administrator’s understanding of the law and how it can be applied to relive their burden.”

The original of this report is on page 19 of Saturday Star of 16 September 2017

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Thursday, 14 September 2017 15:56

In our Thursday roundup, see summaries
of our selection of South African labour-
related stories that have appeared since
midday on Wednesday, 13 September 2017.

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Wednesday, 13 September 2017 15:47

In our Wednesday roundup, see summaries
of our selection of South African labour-
related stories that have appeared since
midday on Tuesday, 12 September 2017.

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Tuesday, 12 September 2017 17:58

In our Tuesday roundup, see summaries
of our selection of South African labour-
related stories that have appeared since
midday on Monday, 11 September 2017.

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Monday, 11 September 2017 11:39

Saturday Star reports that former SA Broadcasting Corporation (SABC) boss Hlaudi Motsoeneng faces a R3 million lawsuit from the so-called SABC 8 journalists, but he has vowed to fight them “until the end”.

After the Labour Court costs ruling on Friday, Solidarity, which represented Foeta Krige, the late Suna Venter, Krivani Pillay and Jacques Steenkamp, said they would now make a legal claim of R1 million against Motsoeneng.

The Broadcasting, Electronic, Media and Allied Workers’ Union (Bemawu), which represented Busisiwe Ntuli, Lukhanyo Calata and Thandeka Gqubule-Mbeki would sue for R2 million.

On Friday, Judge David Gush of the Labour Court in Johannesburg held Motsoeneng liable for costs of the legal application lodged by the SABC 8 against their dismissals.

Solidarity spokesperson Anton van der Bijl said they would lodge their legal claim against Motsoeneng as he had been responsible for the SABC banning the showing and broadcast of violent scenes on all the public broadcaster’s platforms.  “He was a decision-maker,” said Van der Bijl.

Bemawu president, Hannes du Buisson, appeared more cautious, saying their legal claim would be lodged against the SABC, Motsoeneng and chief executive of news and current affairs Simon Tebele.

But Motsoeneng said: “It is the beginning of the battle against me. This was a politically motivated case.”

Initially, in July last year, the SABC 8 journalists were represented by two sets of trade unions, Solidarity and Bemawu, but the court consolidated them into one on 24 February this year.

Solidarity and Bemawu successfully lodged an application to make costs claims against the SABC, Motsoeneng and Tebele on 28 March.

The arguments for costs were heard last Wednesday after the initial hearing on 15 August was postponed following the SABC’s decision to fire their lawyers.

During the costs hearing, Motsoeneng was confident he would be absolved from the claims on the grounds that he did not initiate disciplinary charges against the journalists.

He also said he was not cited in all previous hearings involving the journalists and SABC, but the ruling yesterday also placed him at the centre of the dispute.

Motsoeneng, the SABC and Tebele were ordered to pay the costs since the first application in July last year until Friday on an attorney and client scale, including the costs of “two counsel, jointly and severally the one to pay the others to be absolved”.

Gush did not give reasons for his ruling, which irked Motsoeneng and his supporters.

“I respect the judge and the ruling. I am going to ask my lawyers to oppose the ruling. It is not the end.”

This report by Baldwin Ndaba is on page 5 of Saturday Star of 9 September 2017

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