May 26, 2023
Property Buyers: The Danger of Not Doing Your Financial Homework
“Look before you leap” (wise old proverb)
Don’t let the excitement of buying a property blind you to the necessity of doing your homework before you agree to anything. Look before you leap!
It’s not just a matter of buying the right property at the right price – make sure that your finances (and particularly your cash flow situation) won’t stop you from fulfilling the financial obligations your signature on the sale agreement binds you to.
Otherwise, you could find yourself in the same unenviable position as the property buyer recently ordered by the High Court to pay substantial damages after she couldn’t pay the required deposits.
Three sales, and the seller claims damages
- A trust sold a property to a buyer for R750,000.
- The buyer failed to pay the two required deposits totalling R280,000, the trust cancelled the sale and put the property up for resale.
- It resold the property for R500,000 and sued the buyer for its R250,000 loss on the sale, plus the estate agent’s commission of R22,500 it paid for the new sale.
- The buyer fought the claim on a variety of grounds, none of which found favour with the Court. It ordered the buyer to pay, in addition to legal costs on an attorney and client scale, a total in damages of R235,875. That’s a figure seemingly arrived at by the Court by taking into account an amount of R40,000 already paid in by the buyer, which presumably leaves the buyer down a total of just under R280k plus two sets of legal costs.
Important lessons for buyers and sellers
- Buyers: Before you sign…
Of course, the big lesson here for buyers is to make sure they can comply with the terms of the sale agreement they sign, with particular emphasis on their ability to make payments as and when due. - And sellers: Before you sign…
Sellers on the other hand will want to avoid all the risk, delay and cost that the trust in this case was put to by investigating upfront the financial position of all potential buyers before accepting any offer. Make sure also that the terms of your sale agreement protect you adequately in the event of any default by the buyer. - Seller: Mitigate your damages
Our law requires that if you want to sue for losses you incur as a result of someone else’s breach of contract (or wrongdoing), you must first take reasonable steps to minimise your losses.
As the Court put it: “… the mitigating rule is a rule where a breach of contract has occurred. The innocent party cannot merely sit back and allow their losses to accumulate; the party must take reasonable positive steps to prevent the occurrence or accumulation of losses. The rule does not require the innocent party to do anything more than a reasonable person could do under the same circumstances. Reasonable expenses incurred in carrying out the mitigation steps may be claimed as additional damage suffered. The onus of proving what steps could reasonably have been taken, or that the expenses incurred were unreasonable, rests on the party in breach.” (Emphasis added)
As the seller, therefore, be sure to actively seek alternative buyers, use professionals to assist only as reasonably necessary, and accept only a reasonable resale price. In this case the evidence had established that the trust had acted reasonably both in reselling the property at the price it did, and in using the services of an estate agent to do so.
As always, agree to nothing without professional advice!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 26, 2023
Understanding Your Legal Obligations as an Employer of Domestic Workers
South Africans employ an estimated 900,000 domestic workers. They assist us with a range of tasks that keep our homes running smoothly – from cleaning and gardening to cooking and childcare, their contributions are invaluable. However, as an employer, it is vital that you recognise and fulfill your legal obligations in order to establish a fair and lawful working relationship.
Compliance with these legal requirements has become increasingly important as law enforcement authorities become more and more vigilant in ensuring adherence, so without further ado let’s delve into the details of what the law expects from you.
Firstly, what do we mean by “domestic worker”?
In the context of this article, domestic workers refer to individuals who work in your home, including gardeners, cleaners, cooks, nannies, caregivers (to children, the aged, the sick, the frail or the disabled), au pairs, chauffeurs and the like. Excluded are farm workers and those working less than 24 hours a month for you.
5 key requirements
- Employment Contract: It is essential to sign a written employment contract with your domestic worker. This contract should specify important details, including full name and ID number, remuneration, working hours, overtime, leave (annual, sick, maternity, compassionate, family responsibility), and job description (list roles and responsibilities). Having a clearly defined contract protects both of you and ensures a fair working relationship to your mutual benefit.
- Minimum Wage: The current National Minimum Wage (NMW) for each “ordinary hour worked” is R25-42. Assuming a work month of 21 days x 8 hours per day, R25-42 per hour equates to R4,270-56 per month. The Living Wage calculator will help you check whether or not you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up to date).
- Pay Slips: Every month, you must provide your domestic worker with a written pay slip. The pay slip should include your and your employee’s details, the ordinary and overtime hours worked during the payment period, the applicable rate of remuneration, and any deductions made by you. This document ensures transparency and accountability in the payment process.
- UIF Registration: You must register your domestic worker for UIF (Unemployment Insurance Fund) and make monthly contributions. This will provide short-term relief to your employee during periods of unemployment, maternity leave, or illness. Both of you must contribute 1% of wages each month (i.e., 2% in total). Failure to comply is not only unfair to your employee, but it also exposes you to penalties and other legal consequences.
- COIDA Registration: Under COIDA (the Compensation for Occupational Injuries and Diseases Act), you must register your domestic worker with the Compensation Commissioner to ensure that your worker (or dependants) is eligible for compensation in case of injuries, disabilities, or illnesses sustained while on duty.
It is crucial to understand that non-compliance with these obligations can lead to severe consequences for you, with the risk of legal disputes, referrals to the CCMA (Commission for Conciliation, Mediation and Arbitration), Labour Court fights, and so on.
Familiarise yourself with your obligations, seek professional guidance if needed (dismissals and retrenchments are particular minefields here!) and prioritise the well-being of your domestic workers to maintain a positive and lawful working relationship.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 26, 2023
Maintenance Claims and Life Partners
More and more couples are opting to live together as permanent life partners rather than enter into a formal marriage. The risk for such couples is that whilst our law is steadily (if slowly and cautiously) extending many of the protections of formal marriage to unmarried life partners, that process is not by any means complete yet.
A recent High Court decision, refusing a life partner’s claim for interim maintenance after her relationship broke down, illustrates.
A “permanent romantic relationship” and a failed maintenance claim
- An opposite-sex couple had lived together in a “romantic” relationship for 8 or 9 years, having three young children and splitting when one partner left the common home.
- That partner then sued her ex-partner for (amongst other things) personal maintenance for herself for ten years or until her “death or remarriage”. She based that claim on her request for a declaration that she and her partner had lived as “partners in a permanent opposite-sex life-partnership in which the partners had undertaken reciprocal duties of support”. That main action is being defended by the ex-partner and is yet to come to trial.
- In the meantime, having successfully obtained interim maintenance orders for her children, she then asked the High Court to likewise order interim maintenance for herself as well. She asked for R56,000 per month plus payment of medical, motor and other expenses, together with a R1m initial contribution to costs.
- The Court dismissed this interim application, and whilst its analysis of our current law on the subject, with all the constitutional law ramifications, will be of great use and interest to lawyers, the practical result is what life partners should take note of.
What you must prove to get a maintenance order
Holding that “a ‘permanent romantic relationship’ is not synonymous with a permanent life partnership wherein the parties undertook reciprocal duties of support to one another within the context of a familial setting”, the Court found that the applicant “must first prove facts establishing that the duty of support existed, and that it existed in a familial setting.” (Emphasis added)
She could prove all that, said the Court, in the pending court case. For the moment she must live on her own means, without interim maintenance, until her main action comes to trial.
Practically, if you find yourself in a similar situation you have four choices if you want to claim personal maintenance for yourself (note that maintenance for children is an entirely separate issue, not subject to these limitations) –
- As regards interim maintenance, you can hope that a court will assist you despite the outcome in this case, the Court here stating that “In reaching these conclusions we make it clear that they pertain only to the particular case presented to us by the applicant. Our conclusions are most certainly not intended to be of some broader implication or consequence. It thus of course remains open to anyone to approach court for declaratory relief of the nature which the applicant has sought in this matter and it is hoped that, should that occur, this judgment may provide assistance as to the manner in which such an approach should be made.”; or
- You can try to prove at the full trial that your relationship was more than a “permanent romantic relationship” and was in fact a permanent life partnership with an undertaking of mutual support; or
- You can hope for a change in the law creating an automatic duty of support between you. New legislation on the matter has been pending for many years but appears to be currently stalled. In addition, if this particular case proceeds to trial it may be that something further will emerge from that; or
- Clearly the safest solution – you can put the matter beyond all doubt by signing a full “cohabitation agreement” as soon as your relationship becomes a permanent one.
What should be in your cohabitation agreement?
Although everyone’s own situation and needs will be unique, make sure that your cohabitation agreement (also sometimes called a “domestic partnership agreement”) sets out clearly your respective legal rights and financial arrangements both during your relationship and in the event of separation.
Cover questions such as –
- How will your various assets be divided?
- Do you undertake a reciprocal duty of support and on separation will each or both of you be entitled to personal maintenance and other financial support?
- What provisions are made for your children’s support and maintenance?
- Will there be any financial adjustment between you? What happens for example if only one of you works? Or if you paid for an extension to your life partner’s house or have been paying the bond? Or if one of you brought more into the relationship than the other?
- Who will take over ongoing liabilities and contracts such as leases, bonds, medical and life policies, monthly accounts and so on?
- What else that will need to be regulated in your particular circumstances?
Also make wills!
Supplement your cohabitation agreement with a valid will (“Last Will and Testament”) or perhaps a joint will. That’s the document that will count when you die and it’s the only safe way of ensuring that your last wishes are carried out, and that the loved ones you leave behind are properly looked after once you’re gone. Your cohabitation agreement and your wills are separate and essential documents, so have your lawyer draw them all for you at the same time.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 26, 2023
Ponzi Schemes: Another MTI Judgment, Risks and Red Flags
“MTl’s business clearly amounted to an unlawful ponzi-scheme, i.e. a fraudulent investing scam promising high rates of return to investors and generating returns for earlier investors with investments taken from later investors.” (Extract from judgment below)
In times of economic turmoil, the promise of “easy money” can be incredibly enticing. Unfortunately, this allure often leads people into the clutches of fraudsters who operate ponzi and pyramid schemes.
But why are these scams so successful at fooling even the most astute investors? The answer lies in several factors. First, the promise of quick and substantial profits taps into our desire for financial security and independence. Second, scammers often prey on our emotions and exploit our fear of missing out on lucrative opportunities. Third, they employ persuasive tactics, such as using testimonials and social proof, to gain our trust.
The latest High Court judgment in the MTI (Mirror Trading International) liquidation saga highlights yet again the dangers for investors who get sucked into these schemes.
“An illegal and unlawful scheme”
- MTI was founded in 2019, promising high returns to investors (members of “My MTI Club”), pooling bitcoin for trading “on the global cryptocurrency market”. In 2020, referral bonuses for introducing new members were implemented.
- This latest judgment is part of an extensive saga of litigation involving liquidators, investors/members, creditors and directors (who still steadfastly deny any wrongdoing). In this matter the liquidators applied to the High Court for a series of declarations aimed at facilitating their claims against investors and others.
- The liquidators succeeded in obtaining declarations that –
- MTI’s business model is “an illegal and unlawful scheme”, and
- “All agreements concluded between MTI and its investors in respect of thetrading/management/investment of bitcoin for the purported benefit of the investors, are declared unlawful and void ab initio [void from the beginning]”.
- They failed in their attempts to have MTI declared “factually insolvent” (i.e., its liabilities exceeded its assets) from 2019, nor did they obtain declarations that payments made by MTI to investors/members, commission earners and others amounted to “dispositions” recoverable by the liquidators. Both would have made it easier for them to recover from anyone who ever received any form of payout from MTI, but that is unlikely to deter the liquidators from pursuing these claims.
In any event both sides will presumably appeal this latest judgment, and for now at least it seems that investors/members, whether “winners” (those who got payouts exceeding their investments) or “losers” (presumably the vast majority of investors/members as is invariably the case with ponzi schemes), must remain concerned that not only will their claims turn out to be valueless, they may also have to pay back into the liquidation everything they were ever paid out if the declarations of illegality and voidness are confirmed on appeal
Even if their claims are eventually allowed and proved, they must wonder what if anything they’ll be awarded in light of a R931m preferent claim proved by SARS.
The red flags to share with friends, family, colleagues and employees
The bottom line is that, when a ponzi or pyramid scheme inevitably collapses, investors risk losing everything.
To protect ourselves and others, it’s essential to be aware of the warning signs. Keep in mind at all times that “if it looks too good to be true, it probably is” and be alert to key “red flags” such as guarantees of high returns with little or no risk, complex investing and compensation structures, and an emphasis on recruitment rather than product sales.
Sharing this information with friends, family, and colleagues is crucial in preventing more people from falling victim to these schemes. Employers, in particular, should educate their staff about the dangers and provide resources to help them avoid becoming victims.
Stay informed, be vigilant, and protect yourself, your employees and others from the siren call of “easy money.”
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 16, 2023
KVV | May 2023 News
On Friday I read the weather forecast and saw that it was snowing in Lesotho and the surrounding mountain ranges, I told my husband that this meant that there was some cold weather heading our way (I live in Krugersdorp). My words were not even cold yet (pun intended) when the cold hit us on Saturday night. Saturday night brought rain and Mother’s Day was frosty and windy. Do what you will but there was no denying it. Winter was truly and finally here.
We as South Africans seem to be largely divided into people that love summer and loathe winter, and of course, people that love their seasons the other way around. I form part of the latter. I like winter. I always thought that the main reason why this was is because, as a redhead, I prefer the sun in winter when its intensity is just dialed down a tad. However, recently I have come to realise there is more to it than that.
There is an enchantment to winter that summer simply does not have. Outdoor braais give way to cosy indoor dinners with bobotie, curries, biryanis or whatever hearty meal your Ouma used to make during cold snaps. And then the soups, I mean who does not like a warm fresh butternut soup with added chilli flakes and a pinch too much nutmeg, steaming from the crockpot with a freshly baked ciabatta.
Winter does not just bring a change in the food we prefer though, there is something enchanting about being able to draw the curtains on a cold winter night and cuddle up with a loved one on the couch under a blanket, each with a steaming milo in hand and a tub of butter popcorn to watch some silly movie you both have watched 10 times already. Or having a sit down dinner with friends, each with his or her warm water bottle on the lap and a glass of sherry to warm the belly.
This winter I want to challenge all that are reading this newsletter to host a dinner, a proper winter dinner with spicy warm foods, wine or sherry and warm water bottles or blankets a plenty (not much of a challenge I hear you saying). But the challenge is this, I want you to specifically think of someone, that might not be experiencing the same warmth I described above regarding winter. We all know someone for which winter is lonely, cold and unpleasant and this is the person I want to challenge you to invite to your dinner party.
Seneca, one of the great stoic philosophers, once said that nothing is pleasant to possess without people to share it with. The same goes for our warm winter feeling. Go ahead South Africa, lets share some love this winter and make sure that everyone out there has something that is pleasant to possess because it is shared. Stay warm this winter.
Regards
Ianthe Biggs | Conveyancer
May 16, 2023
Losing Your Property to Acquisitive Prescription
“… a person shall by prescription become the owner of a thing which he has possessed openly and as if he were the owner thereof for an uninterrupted period of 30 years or for a period which, together with any periods for which such thing was so possessed by his predecessors in title, constitutes an uninterrupted period of 30 years.” (Prescription Act)
Here’s another warning to be vigilant when it comes to someone else occupying any part of your property for 30 years or more – you could wake up one day to find you’ve lost your ownership altogether. With not a cent’s purchase price to show for it.
And whilst 30 years may seem like a long time, judging by the cases that come before our courts it does regularly take property owners by surprise.
A feature of our law since Roman times, “acquisitive prescription” is a legal process that allows a person to acquire ownership of a property through long-term occupation.
The requirements for acquisitive prescription
To succeed in such a claim under our Prescription Act, the possessor must prove at least 30 years of continuous “possession” both openly, and as if the owner. “Possession” in this context refers to “civil possession”, a concept which (to put it as simply as possible) means physical possession with the intention of owning the property. Whether or not you think you are the true owner or know that you aren’t, is irrelevant here.
Somewhat more colourfully, you may also come across the Latin phrase (beloved in legal circles) “Nec vi, nec clam, nec precario” – meaning in essence that your possession must be “without force, without secrecy, without permission.”
Let’s have a look at a recent and illustrative case in which a property owning company’s attempts to retain ownership of a piece of its land came to nought.
The buyers who didn’t notice a nursery and park on their land – for 31 years
- In 1993, two individuals bought a property-owning company and were appointed directors. Their plan was to develop and sell the thirty-nine plots owned by the company.
- Unknown to them, a neighbour had since 1990 occupied a portion of the (then undeveloped) property. The possessor had at her own cost transformed the land into a nursery and community park, using water and electricity from other neighbours and reimbursing them.
- The directors had never noticed the nursery and park as they drove past because neither was visible from the road, being hidden by dense vegetation. They assumed the nursery was on neighbouring land.
- After 31 years of continuous occupation the possessor asked the High Court to order registration of the occupied land into her name.
Was the possessor’s illegal use of the property a factor?
- One can imagine the directors’ shock at learning that they stood to lose a portion of their property, with zero compensation.
- One of the defences they raised was that the possessor’s illegal use of water and electricity on the property, her failure to apply for rezoning, and her unauthorised use of the property as a nursery all prevented her from meeting the requirements for acquisitive prescription.
- Not so, held the Court, her possession was in itself not unlawful and her illegal usage did not affect her possession of the land as owner.
- The property will now be registered into the possessor’s name.
Owners – monitor your property!
As a registered owner monitor your property and take action against any occupiers. Or indeed against anyone using your property for anything, because “servitudes” (rights of use or access over your property) can also be acquired by prescription.
Before you buy…
The losers in this particular case would have saved themselves a lot of pain if back in 1993 they had checked properly for occupiers on the company’s land – don’t fall into the same trap!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 16, 2023
Trustees: Your New Duty to Report Beneficial Owners
“National Treasury, therefore, expects that if South Africa continues to make significant improvements in effectiveness and swiftly exits grey listing, it will have a limited impact on financial stability and costs of doing business with South Africa, particularly if South Africa moves speedily to get out of grey listing.” (National Treasury)
South Africa’s grey listing by the Financial Action Task Force, the global financial watchdog, has led government to hurriedly introduce new “Anti-Money Laundering and Combating Terrorism Financing” measures to combat financial crimes. One of those measure is a new requirement for trustees to disclose all “beneficial owners” of trusts.
In what was unfortunately no April Fool’s Joke, new requirements effective from 1 April 2023 were gazetted without notice and after business hours only on 31 March 2023. They came in the form of amendments to the Trust Property Control Act Regulations, requiring all trustees to establish and record the beneficial ownership of the trust, to keep a record of prescribed information relating to beneficial owners, to lodge same with the Master’s Office, and to keep all information up to date on an ongoing basis.
“Beneficial owner” has a wide definition
The definition of “beneficial owner” includes (logically) all beneficiaries, “a natural person who directly or indirectly owns ultimately owns the relevant trust property”, and “a natural person who exercises effective control of the administration of the trust arrangements…”. It also includes all trustees and the founder – those inclusions seem a lot less logical but that’s the law.
So, what should you do now?
Media reports have highlighted both the heavy penalties for failure to comply with these obligations (a R10 million fine, imprisonment for five years, or both) and the impossibility of trustees complying with those obligations on 1 April as a result of both the timing of the gazette and delays in establishing the requisite Master’s online electronic register.
But the practical issue now is that all trustees must take steps to comply – go to the Master’s “Trust Beneficial Ownership Register” page and follow the instructions there (note – you must be signed into Google to access that link).
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 16, 2023
Divorce: Remember to Review Your Will!
“It has long been a foundational principle of our common law and the legislation that has governed the law of testamentary succession that a will, properly executed, is the document that authoritatively reflects the genuine and voluntary dispositions of a testatrix.” (Extract from judgment below)
Most people when making wills and estate plans will lean toward leaving all or most of their estate to a spouse in one form or another.
But if things fall apart and divorce looms it is easy in all the stress and hurly burly of the break-up to forget all about your will. Now it may be that you are quite happy to leave things as they are, but it’s far more likely you will want to make changes – big changes.
Either way, it is important to have on your break-up To Do list a big note “Review and change my will”. If you don’t, our law makes your decisions for you – better than nothing perhaps but far from ideal.
The risks of leaving your will unchanged
In terms of our Wills Act, your ex-spouse is excluded from inheriting under your pre-divorce will for a period of 3 months, unless (a very unlikely scenario) your will makes it clear that you wanted your ex-spouse still to benefit despite the divorce.
After 3 months, if you haven’t made a new will your ex-spouse can inherit again because you are assumed to have wanted him/her to remain an heir. In practical terms, you have 3 months to get your act together and make a new will reflecting your new wishes.
But rather than do nothing for 3 months, leave nothing to chance and make your new will as soon as you can. If you do nothing, your preferred heirs (your children perhaps, or other loved ones) are at risk –
- If you die within the 3-month period, your family could find itself in a bitter fight over your will and how you intended your estate to be distributed. Witness the Supreme Court of Appeal (SCA) case we discuss below.
- If you survive beyond the 3 months, you may have just left everything by mistake to an ex-spouse from whom you are totally estranged.
A case in point
- Shortly before her marriage a wife made a will leaving everything to her husband. She failed to revoke or amend that will after their divorce and committed suicide within the 3-month period.
- Excluded by the Wills Act from inheriting (as set out above) the ex-husband applied to the High Court to have that provision of the Act declared unconstitutional. The High Court ruled against him and he appealed to the SCA.
- The SCA upheld the constitutional validity of the Wills Act provision, and whilst the Court’s detailed reasoning for reaching that conclusion will be of great interest to lawyers, from a lay point of view what really counts is –
- The two risk factors set out above remain in place
- The case serves as a clear warning that not reviewing your will on divorce can easily lead to protracted and bitter litigation, to everyone’s detriment.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 16, 2023
Overtime: The Importance of Agreements
“…an employer may not require or permit an employee to work … overtime except in accordance with an agreement” (Basic Conditions of Employment Act)
All employers and employees need to know of a recent Labour Court judgment holding that an instruction to work overtime in the absence of an agreement is unlawful.
A lapsed overtime agreement makes dismissal unfair
- A company’s Site Manager instructed four employees to work overtime to meet production targets but they refused, citing safety issues on the day in question.
- They were charged with gross insubordination and subsequently dismissed.
- They took the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) to dispute the dismissals, and when the CCMA found that the dismissals were substantively fair, they applied to the Labour Court for review.
- Although the CCMA commissioner had found that there was a work agreement in place that bound the employees to work overtime as and when necessary, the Labour Court held that the overtime clause in their contracts of employment had already lapsed by the time the instruction was issued.
- Moreover, on the facts there was no evidence to support any inference of an “implied or tacit” agreement to work overtime on this particular day. Said the Court: “…an agreement [to work overtime] could be inferred only when an employee had actually worked overtime without prior consent.”
- The Court’s conclusion – without an agreement to work overtime on the day in question, the instruction was unlawful, and the dismissal accordingly unfair.
- A further finding by the Court, although of practical relevance only to one employee whose agreement to work overtime remained valid, is nevertheless well worth noting: “The sanction of dismissal should be reserved for instances of gross insolence and gross insubordination as respect and obedience are implied duties of an employee under contract law, and any repudiation thereof will constitute a fundamental and calculated breach by the employee to obey and respect the employer’s lawful authority over him or her.” In this case “There was no evidence that the applicant employees acted willfully and repeatedly … Obviously, a progressive disciplinary sanction in a form of a warning or final written warning could have availed.” (Emphasis added)
- The employer was ordered to reinstate the employees, retrospectively and with full back pay.
The law
Agreement is essential: The BCEA (Basic Conditions of Employment Act) regulates overtime and provides that overtime is voluntary: “…an employer may not require or permit an employee to work … overtime except in accordance with an agreement”. It is up to you as employer to prove that a valid agreement is in place – so whilst a verbal agreement is perfectly fine in practice most of the time, a written agreement will prove invaluable in the event of any uncertainty or dispute.
When overtime agreements lapse: The BCEA also specifies that an overtime agreement “concluded … with an employee when the employee commences employment, or during the first three months of employment, lapses after one year.”
The bottom line
Make sure you have valid overtime agreements in place and renew them if they lapse. As always with our labour laws remember that the complexity and the downsides of getting it wrong make specific professional advice an easy decision.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews