Deductions from employees’ remuneration: seeking clarity in the law

Abstract

Sectoral Determination 9,1 Wholesale and Retail Sector echoes the wording found in the Basic Conditions of Employment Act2 when it comes to the section pertaining to deductions from employees’ remuneration. It is unclear how an employer may lawfully make a deduction (other than those required by law) from an employee’s remuneration in order to recover costs such as till shortages, stock losses and improper notice. Loss and damages are common problems faced not only by retailers but by all employers, yet the two governing bodies, that is, the Department of Labour and the CCMA, fail to offer any assistance to the employer in this regard. The law is unfairly biased against the employer, who may be financially unable to recover from losses caused by an employee and may face closure should it be unable to recover losses suffered. The two remedies available to the employer are civil action and criminal action against the employee. However, both have proven to be inadequate for recovering losses incurred. Furthermore, the employer will have already incurred losses and therefore can ill afford the money or the time to pursue these options. The Small Claims Court does offer some relief to a smaller employer wanting to claim to a maximum of R7000, but companies are excluded from this mechanism as the rules of the Small Claims Court specifically exclude them from using this forum. In this study, I will look at the common law principle of offset to see whether it can be applied to employers making deductions against employees for loss or damage. Notice is a quantifiable amount and is a legal debt; therefore. it should be able to be applied as an offset. Two subsections deal with deductions; after looking carefully at the wording of theses subsections I will try to determine whether the one is alternate to the other, or whether the narrow interpretation that the Department of Labour gives to the statute is accurate. A narrow interpretation of the law states that the employee must sign an acknowledgement of debt. However, employees often refuse to sign an acknowledgement of debt, thereby frustrating the law. Could this possibly have been the intentions of the drafters? Surely not, yet the Department of Labour, by having a narrow interpretation of the law, see it as such and as a result the employer is left out of pocket. In this mini-thesis, I will look at the way the law should be interpreted and the way it should be applied in practice. 1 Sectoral Determination 9: Wholesale and Retail Sector, Government Gazette No. 24207 2 The Basic Conditions of Employment Act 75 of 1997 What problems does this ambiguity create? Some problems could include a higher case load for the Department of Labour, demotivated employees, increased tension in the workplace and frustrated employers. I also consider comparative labour law to see if other countries faced with similar situations have made any allowances for such circumstances. Aims of this mini-thesis: 1. To highlight the problems and ambiguities in the interpretation and application of section 34 of the Basic Conditions of Employment Act (BCEA)3 and section 8 of the Sectoral Determination 9(SD9)4 2. To recommend, propose and encourage a practical solution for employers to implement in the workplace 3. To improve the situation for employers under the current structure. 4. To lead the legislature drafters to amend or redraft these sections