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Unlawful deductions


Talk about opening a can of worms….

More often that not employers deduct monies from the salaries of employees without first obtaining their consent or even consulting with them on this issue. Recently, I have been involved in another usual unlawful deduction dispute relating to S&T allowances. Well, what seemed to be normal turned out to be an immensely technical and complicated matter, and could very well have shed some light on the reason this practice is applied within the employment relationship.

It is a well known fact the CCMA do not assume jurisdiction on a dispute relating to deductions as this lies firmly in the hands of  the Department of Labour as well as that of the Labour and Civil Courts.

But have you ever stopped to wonder why? Especially considering an issue of this nature is one that goes to the heart of the employment relationship as at the end of the day remuneration is the reason why we all work.

Deciding to do some research on the matter and also expecting to find a simple answer I was initially confused to say the least especially after referring to the relevant labour legislation. When everything is put into perspective though it does eventually start to make sense. The Basic Conditions of Employment Act (BCEA) clearly stipulate that:
“The Labour Court has concurrent jurisdiction with the civil courts to hear and determine any matter concerning a contract of employment, irrespective of whether any basic condition of employment constitutes a term of that contract.” This excerpt speaks for itself but is not what we are looking for. The same law then continues by stating: “If an employee institutes proceedings for unfair dismissal, the Labour Court or the arbitrator hearing the matter may also determine any claim for an amount that is owing to that employee in terms of this Act if (a) the claim is referred in compliance with section 191 of the Labour Relations Act, 1995;” The inference drawn from the above, in essence, is that the CCMA can adjudicate a dispute concerning unfair deductions on condition that this forms part of an unfair dismissal dispute that has been referred to them.

However in most cases relating to deductions, the issues are almost addressed immediately and thus this avenue will not hold any water for the simple reason that a dismissal is not even on the cards.

Yet, when considering the grounds on which a person refers a matter to the CCMA, two of these grounds immediately comes to mind i.e:

  • Unilateral changes to terms and conditions of employment and,
  • Unfair labour practice

In my specific matter one would assume that S&T obviously forms part of the remuneration package of the Pilot and as such constitutes a condition of employment. However, a unilateral change to this term and condition of employment would mean that the S&T system is taken away completely or reduced by the company without consulting with or notifying the Pilot. Thus this argument would not succeed.

On the other hand the Labour Relations Act (LRA) defines an unfair labour practice as the following:
“Unfair labour practice” means any unfair act or omission that arises between an employer and an employee involving - (a) unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee;”

Since S&T would in any event be regarded as a benefit it would seem appropriate to refer such dispute to the CCMA under this category. But again, the CCMA proved to be one step ahead. This time previous case law dictates that although it may adjudicate a matter relating to unfair labour practice, it once again does not have the jurisdiction to determine any claim for an amount. In support of this Commissioner Myhill gave the following reasoning in the Arbitration award between Mbumbi and Sinqobile Security Services (GA26278-04):

“30. According to s.74 of the BCEA, however, I only have jurisdiction to determine any claim for an amount that is owing to an employee in terms of the BCEA if the dispute referred to the CCMA is an unfair dismissal dispute. This is an unfair labour practice dispute so I cannot determine this particular issue. The applicant may refer this issue to the Department of Labour.

31. I do, however, find that the applicant has proved that the respondent committed unfair labour practices as defined in s.186(2)(b) i.e. "... any other unfair disciplinary action short of dismissal in respect of an employee." 

32. In terms of s.193(4) of the Labour Relations Act 66 of 1995 (LRA) I may determine any unfair labour practice dispute on terms that I consider reasonable which may include ordering reinstatement, re-employment or compensation.”

What we have then is that the CCMA does not have jurisdiction to deal with deduction disputes per se. Similarly when referring a dispute about unfair labour practice to the Commission, they are not entitled to determine any amount that is owed to you. However when a unfair dismissal dispute is referred to them they can determine how much money is owed to a person. But that is only in cases of dismissal. When considering everything discussed thus far, it is not difficult to determine that up until now we have not reached anything.

In the end, the answer to this crows nest seemed to be very simple. Only the labour and civil courts can determine claims for an amount owed to a party. A classic example will be what happens to you when you fail to pay accounts or vehicle installments. This also poses new problems since one would have to approach an Attorney, thus legal costs are now involved. Also, should one decide to pursue with the Labour Court avenue it may take up to three years before your matter will be heard.

Is the complexity of the odd deduction matter then the reason why employers deliberately pursue with such deductions without obtaining any form of consent from employees. We all understand that running a business in the current recession are testing times indeed and that the odd deduction here and there sounds like a good idea as a cost saving initiative. But then again would there be any business if there weren’t any employees?

LRA Amendments

Attached please find an article on the new LRA from Jacques Lemmer - May 2012.

pdfLRA May 12.pdf210.24 KB

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