It often happens that for some reason or another, an employee becomes indebted to his or her employer.
It often happens that for some reason or another, an employee becomes indebted to his or her employer.
The question to be asked in these circumstances is what remedy does an employer have to recover money owed to the employer. Can an employer simply deduct the amount owed by an employee from the employee's salary in order to settle the employee's debt?
In this regard, the employment law' sposition differs from what happens in civil law in that it is statutorily regulated by The Basic Conditions of Employment Act.
In terms of Section 34 of the Basic Conditions of Employment Act, before an employer may deduct money against an employee's salary, the employee must consent to such a deduction or the deduction must be required or permitted in terms of a law, collective agreement, court order or arbitration award.
The employee's consent to the deduction is, however, not required where the deduction is made to reimburse the employer for loss or damage suffered by the employer as a result of the employee's fault.
Such loss or damage must have occurred in the course of employment and the employer must, prior to the deduction, follow a fair procedure and give the employee a reasonable opportunity to show why the deduction should not be made. The total amount of the debt must not exceed the actual amount of loss or damage.
In United Transport and Allied Trade Union on behalf of Harris and others versus Promat, a division of Transnet, the court held that where an employer is also at fault, losses should be apportioned between the employer and the employee in proportion to their respective fault(s). Another condition of importance to such deduction is that the deduction must not exceed one-quarter of the employee's salary.
In the situation where the employee does not consent to the deduction and the deduction sought is not in respect of a loss or damage to the employer as a result of the employee's fault, the employer's remedy would be to institute legal proceedings against the employee for the recovery of the outstanding amounts.
If the employer unlawfully deducts from the employee's salary, the employee may approach the Labour Court to interdict the employer from doing so.
In the Independent Municipal and Allied Trade Union on behalf of members versus Ekurhuleni Metropolitan Municipality the employees owed the municipality an amount of about R20million for outstanding rates and taxes.
To recover the outstanding amounts, the municipality deducted money from the employees' salaries. The court held that though the employees owed the money, employers are barred from unilaterally deducting any amount of money from their employees' salaries. The municipality was prohibited from deducting money from the employees' salaries unless the employees had authorised them to do so. - By Lavery Modise, a director, and Lebogang Kutumela, an associate, at Routledge Modise in association with Eversheds.
How should you pay the boss back?
It often happens that for some reason or another, an employee becomes indebted to his or her employer.
It often happens that for some reason or another, an employee becomes indebted to his or her employer.
The question to be asked in these circumstances is what remedy does an employer have to recover money owed to the employer. Can an employer simply deduct the amount owed by an employee from the employee's salary in order to settle the employee's debt?
In this regard, the employment law' sposition differs from what happens in civil law in that it is statutorily regulated by The Basic Conditions of Employment Act.
In terms of Section 34 of the Basic Conditions of Employment Act, before an employer may deduct money against an employee's salary, the employee must consent to such a deduction or the deduction must be required or permitted in terms of a law, collective agreement, court order or arbitration award.
The employee's consent to the deduction is, however, not required where the deduction is made to reimburse the employer for loss or damage suffered by the employer as a result of the employee's fault.
Such loss or damage must have occurred in the course of employment and the employer must, prior to the deduction, follow a fair procedure and give the employee a reasonable opportunity to show why the deduction should not be made. The total amount of the debt must not exceed the actual amount of loss or damage.
In United Transport and Allied Trade Union on behalf of Harris and others versus Promat, a division of Transnet, the court held that where an employer is also at fault, losses should be apportioned between the employer and the employee in proportion to their respective fault(s). Another condition of importance to such deduction is that the deduction must not exceed one-quarter of the employee's salary.
In the situation where the employee does not consent to the deduction and the deduction sought is not in respect of a loss or damage to the employer as a result of the employee's fault, the employer's remedy would be to institute legal proceedings against the employee for the recovery of the outstanding amounts.
If the employer unlawfully deducts from the employee's salary, the employee may approach the Labour Court to interdict the employer from doing so.
In the Independent Municipal and Allied Trade Union on behalf of members versus Ekurhuleni Metropolitan Municipality the employees owed the municipality an amount of about R20million for outstanding rates and taxes.
To recover the outstanding amounts, the municipality deducted money from the employees' salaries. The court held that though the employees owed the money, employers are barred from unilaterally deducting any amount of money from their employees' salaries. The municipality was prohibited from deducting money from the employees' salaries unless the employees had authorised them to do so. - By Lavery Modise, a director, and Lebogang Kutumela, an associate, at Routledge Modise in association with Eversheds.