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March 15, 2024

Misrepresentation in Contracts


Understanding Your Rights, Remedies, and Implications for Contractual Relationships in South African Law

Introduction:

In the realm of contracts, misrepresentation can lead to significant complications and disputes. It occurs when one party makes a false statement that influences the other party's decision to enter into a contract. This could be done knowingly, recklessly, or innocently. Understanding misrepresentation and its consequences is essential for both parties involved in a contract.

Summary of the Law:

Misrepresentation in contracts refers to a false statement of fact made by one party to induce the other party to enter into a contract. It can occur during negotiations or within the contract itself. There are three main types of misrepresentation: innocent, negligent, and fraudulent. Regardless of the type, misrepresentation can lead to legal remedies for the innocent party.

Remedies for Misrepresentation:

When misrepresentation is proven, the innocent party has several remedies available:

  1. Rescission: This involves undoing the contract and returning both parties to their pre-contractual positions. It's pursued when the misrepresented fact was material in influencing the contract's formation.
  2. Damages: The innocent party can seek monetary compensation for any financial losses suffered due to the misrepresentation. Damages aim to put the innocent party in the position they would have been in had the misrepresentation not occurred.
  3. Specific Performance: In cases where damages are inadequate, the court may order specific performance, compelling the party responsible for the misrepresentation to fulfil their contractual obligations as originally agreed upon.

It's important to note that the innocent party can elect the preferred remedy but choosing one may waive the right to pursue others.

Conclusion:

Misrepresentation in contracts can lead to disputes and legal action, impacting contractual relationships. Understanding misrepresentation and seeking legal advice before entering into agreements can help mitigate risks and protect your interests. By being aware of misrepresentation issues, parties can navigate contracts more effectively and safeguard their rights.

 

March 08, 2024

The Minister of Employment and Labour has increased the earnings threshold and the national minimum wage.


Earnings Threshold Adjustment:
Effective April 1, 2024, the Minister of Employment and Labour has revised the earnings threshold from R241,110.59 per annum (R20,092.54 per month) to R254,371.67 per annum (R21,197.63 per month). The earnings threshold, as defined, constitutes the regular annual remuneration of an employee before the deduction of income tax, pension, medical aid, and analogous contributions, excluding corresponding payments by the employer. Notably, subsistence and transport allowances, achievement awards, and overtime remuneration do not factor into this calculation.

Employees surpassing the earnings threshold are exempted from certain provisions regulating work hours, overtime compensation, compressed schedules, averaging of hours, meal breaks, rest intervals, Sunday remuneration, night shifts, and public holiday compensation under the Basic Conditions of Employment Act, 1997 (BCEA). Conversely, individuals earning between R20,093 and R21,198 per month will now qualify as "vulnerable" workers, thereby enjoying enhanced entitlements according to the BCEA.

Implications for Temporary and Fixed-Term Employees: Temporary employment services (TES) employees earning within the aforementioned bracket shall, from April 1, 2024, be deemed to be employees of the TES client, provided they satisfy the criteria delineated in Section 198A of the Labour Relations Act (LRA). Should such employees engage in non-temporary duties for a duration exceeding three months with the client, they may attain the status of permanent employees of the latter, consequently rendering the client jointly and severally liable for any BCEA non-compliance by the TES.

Similarly, fixed-term contract employees earning within the stipulated range will, as of April 1, 2024, be deemed permanent employees of their respective employers if they meet the requisites articulated in section 198B of the LRA. An employer's failure to justify the term's duration may prompt the designation of these employees as permanent, necessitating equal treatment in comparison to permanent counterparts.

National Minimum Wage Augmentation: Commencing March 1, 2024, the Minister has raised the national minimum wage by 8.5%, elevating it from R25.42 to R27.58 per ordinary hour worked. This increase pertains to most workers, encompassing farm and domestic labourers, whose minimum wage has aligned with the national rate since 2022.

However, exemptions apply to individuals engaged in expanded public works programs or enrolled in learnerships, with distinct wage revisions applicable to each category. Expanded works program participants will witness their minimum wage escalate from R13.97 to R15.16 per hour, while learnership participants, as per Section 17 of the Skills Development Act, 1998, will receive increased allowances commensurate with their National Qualifications Framework (NQF) level and earned credits.

Exceptions and Compliance Imperatives: Certain personnel, including members of the South African Defence Force, the National Intelligent Agency, the South African Secret Service, and volunteers, are exempted from the ambit of the National Minimum Wage Act, 2018. Employers are strongly urged to ensure adherence to the revised minimum wages, as non-compliance may trigger penalties under Section 76A(1) of the BCEA.

To maintain compliance, employers must undertake comprehensive reviews of employment contracts and policies to align them with the revised legislated amounts. Furthermore, audits of both the workforce and labour suppliers are imperative to ensure BCEA compliance across the board.

These regulatory adjustments signify enhanced remuneration and safeguards for a substantial portion of the South African workforce, underscoring the evolving landscape of labour law in the nation.

 

March 06, 2024

Navigating Arbitration: Understanding the global landscape of arbitration


Introduction: Better than arm wrestling, arbitration is becoming increasingly popular as an alternative to resolving disputes in national courts. Its appeal lies in various factors including finality, confidentiality, speed, enforceability, neutrality, and adaptability to specific case circumstances. This article explores the global landscape of arbitration, its benefits, and the considerations parties must bear in mind when choosing this method of dispute resolution.

1.     Globalization and Arbitration's Rise:

·         The surge in cross-border trade and investment has propelled arbitration as the preferred mechanism for resolving international disputes.

·         International perspective of arbitrators and practitioners fosters a less narrow-minded approach compared to national courts.

2.     Navigating Varied Legal Landscapes:

·         Differences in procedural laws across jurisdictions can impact arbitration agreements, requiring parties to be mindful of default and mandatory rules.

3.     Court Intervention in Arbitral Proceedings:

·         Parties typically prefer to keep disputes out of national courts but may require court intervention for asset or evidence preservation.

·         The extent of court intervention varies, influencing the attractiveness of jurisdictions for arbitration.

4.     The Crucial Arbitration Agreement:

·         Arbitration agreement serves as the foundation of the tribunal's jurisdiction and parties' obligation to arbitrate.

·         Variances in national laws regarding the validity, scope, and interpretation of the agreement can significantly affect dispute outcomes.

5.     Jurisdiction Disputes:

·         Tribunals generally decide their own competence, but differences exist in courts' power to reconsider tribunal decisions on jurisdiction.

6.     Challenging Awards and Enforcement:

·         Arbitration awards are typically challenging to contest, ensuring finality in disputes.

·         Varying court approaches to enforcing awards and grounds for challenging them impact arbitration's effectiveness.

7.     Role of Party-Appointed Arbitrators:

·         Party-appointed arbitrators contribute to confidence in the decision-making process.

·         Variances in their duties across jurisdictions affect impartiality and presentation of parties' perspectives.

Conclusion: Arbitration offers numerous advantages over litigation, making it an attractive option for resolving disputes, especially in an increasingly globalized world. However, parties must navigate diverse legal landscapes and consider factors such as court intervention, arbitration agreements, jurisdiction disputes, award challenges, enforcement, and the role of party-appointed arbitrators. Understanding these complexities ensures effective utilization of arbitration and maximizes its benefits for all parties involved.

 

February 29, 2024

Seokwane v Bidvest Prestige Cleaning Services: Unfair Dismissal of Elderly


 

Introduction:

In South Africa, laws prohibit unfair discrimination in employment based on age. However, certain provisions allow for fair dismissal upon reaching the normal or agreed retirement age. The case of Seokwane v Bidvest Prestige Cleaning Services explores the application of these laws in a situation where an employee claimed unfair dismissal due to age.

Facts of the Case:

Bidvest Prestige Cleaning Services (Pty) Ltd (the respondent) employed Rosy Seokwane (the applicant) under a fixed-term contract starting in July 2019. She was 62 years old at the time of employment, exceeding the agreed retirement age of 60 specified in her contract. In June 2020, during the COVID-19 lockdown, her supervisor advised Seokwane that she would be retrenched due to exceeding the retirement age. Despite requesting to work until October 2022 to pay off debts, she was retired on 30 June 2020.

Bidvest Prestige Cleaning Services claimed that Seokwane was retired due to operational requirements, as its client, Volkswagen (VW), requested a reduction in staff. Despite initially hesitating to employ Seokwane due to her age, they relented at VW's insistence.

Court's Findings:

The court scrutinized the respondent's actions and determined that the dismissal of Seokwane was automatically unfair. Despite relying on clauses in the employment contract and retirement policy, the court found that the respondent's conduct violated fair retirement practices. The respondent's decision to employ Seokwane, knowing her age, and then retire her due to operational requirements was deemed discriminatory. The court emphasized that retirement should not be used as a pretext for dismissing employees based on other reasons.

The court awarded compensation to Seokwane equivalent to 12 months of her remuneration, considering the circumstances of the case and the respondent's failure to provide adequate notice or fair treatment.

Conclusion:

The case of Seokwane v Bidvest Prestige Cleaning Services highlights the importance of fair treatment and non-discrimination in employment, particularly concerning the elderly. It underscores the need for employers to adhere to legal provisions regarding retirement and to avoid using age as a basis for dismissal. The judgment serves as a reminder that employees should be afforded proper notice and consideration, especially when facing retirement.

 

February 21, 2024

Legal duty to ensure safety of exterior premises, Pieterse v FLM SA (Pty) Ltd and Others

 


Introduction: In the case of Pieterse v FLM SA (Pty) Ltd and Others, the court examined the issue of negligence surrounding a slip-and-fall incident on an uneven sidewalk leading to a business premises. The plaintiff sustained injuries and sought damages, alleging that the defendants failed in their legal duty to maintain safe premises.

Summary of Law: The plaintiff argued that the defendants had a legal duty to ensure the safety of exterior sidewalks and entrances to their business premises. However, the court found that the presence of a disclaimer notice and the fair condition of the paving negated claims of negligence. It emphasized that reasonable expectations regarding pavement conditions should be considered, and the plaintiff's own negligence was highlighted.

Court's Findings: Despite the plaintiff's claims, the court determined that the defendants had a system in place for repairs and maintenance, and no previous complaints had been raised regarding the pavement's condition. Applying the test for negligence, the court found no evidence of a dangerous situation that the defendants could have reasonably foreseen, leading to the dismissal of the plaintiff's claim. Additionally, the plaintiff's failure to prove the location and cause of her fall, as well as her own negligence, contributed to the dismissal of the claim.

Conclusion: The court's decision underscores the critical importance of evaluating the reasonableness of expectations concerning the condition of premises. It highlights the necessity for individuals to take responsibility for their safety and exercise caution. Ultimately, the plaintiff's claim was dismissed, emphasizing the importance of fulfilling the burden of proof in cases of alleged negligence.