Warning to a parent that refuses to pay maintenance.

By Sasha Kadish.

In a recent case, a divorcing couple who were married in community of property signed a settlement agreement. The divorce was granted in 2014, and the agreement was made a court order. The couple had three minor children, and the father, who was an accountant, businessman and sole director of an accounting firm, was ordered to pay maintenance for their upkeep.

However, the father failed to comply with the court order and did not pay maintenance for the minor children. In 2018, a new court order was obtained, ordering the accounting firm owned by the father to pay 75% of the outstanding maintenance. Despite this, the father still did not comply with the court order, forcing the mother to sell immovable property to support the children, and the bank sought foreclosure on a second property.

The mother then brought a contempt of court application against the father. The court found that the father intentionally and willfully disobeyed the orders, severely undermining the best interests of the minor children. As a result, the court sentenced him to three months imprisonment for the crime of contempt of court.

This case serves as a warning to parents who refuse to pay maintenance for their children. The court will not hesitate to imprison a parent who can afford to pay but refuses to do so. Therefore, if you are an aggrieved parent suffering because of a non-paying parent, it is important to pursue all avenues in court to bring the non-paying parent to justice. Remember, the welfare of your children should always be your top priority.

Can the trustees of a pension fund ignore the wishes of a member as recorded in the member’s nomination form?

The court dealt with this question in Ndwandwe v Trustees of Transnet Retirement Fund and Others [2023] ZAKZDHC 8 (22 February 2023) of Transnet Retirement Fund and Others [2023] ZAKZDHC 8 (22 February 2023).

The conclusion was that the trustees of a fund may apportion death benefits to the member’s nominees as well as identified dependents and beneficiaries who are not included in the nomination form, subject to the wording of its rules.

Ndwandwe (the deceased) worked for Transnet. When he died, he was survived by two wives and 10 children.

Years before his death the deceased completed a beneficiary nomination form, nominating certain family members. Retirement funds rules are the main source of the rights and obligations that regulate the relationship between the fund on one hand, and its members and the employer, on the other. The board of trustees of a fund are therefore guided by the rules of that fund.

Notwithstanding the nominees and percentages stipulated by the deceased in the nomination form, the trustees deviated from the nominations. Mrs Ndwandwe was unhappy with the change and approached the court, seeking to set aside the revised apportionment by the trustees of the fund. She contended that the trustees committed a reviewable irregularity by ignoring the contents and stipulations in the deceased’s nomination form.

The trustees of the fund argued that it was not bound by the nomination form and was entitled to make an independent apportionment of the deceased’s death benefit to his qualifying dependents as defined in terms of the fund’s rules.

The court found that the trustees acted reasonably and rationally in arriving at the decision to vary the proportions of the death benefits amongst the deceased’s dependants, contrary to the express wishes of the deceased, stipulated in his nomination form.

It found that the trustees of the fund had a large discretion to determine, in the light of its assessment of their respective needs, in what proportions the death benefit of the deceased would be distributed among his dependants.

This judgment accords with the prevailing law set out in section 37C of the Pension Funds Act 24 of 1956 (PFA). The PFA empowers a board of trustees to take all reasonable steps to identify and locate all potential dependents and beneficiaries of the deceased member’s death benefits and to distribute the benefits in a rational and equitable manner. The board of trustees is therefore not bound to rely solely on the information that is brought to its attention through a member’s nomination form.

What is the effect of a restraint of trade clause when a business is sold?

A client asked if she is bound by the restraint of trade undertaking contained in her employment contract when her employer sold the business as a going concern. She is now working for the new buyer on the same terms as her old contract.

Section 197 of the Labour Relations Act, 1995 (“LRA”) protects employment where a business transfer occurs. In terms of section 197 and section 197B(1)(b), a “transfer” means the transfer of a business by one employer (the old employer) to another employer (the new employer) as a going concern.

In the case of Slo-Jo Innovation (Pty) Ltd v Beedle and another [2023] (LC), the court had to decide if Beedle was in breach of a restraint of trade clause. Slo-Jo Trading employed her as a sales representative in 2007. Her employment contract contained a restraint of trade clause. In 2018, she was transferred to Slo-Jo Innovation. She was employed on the same terms and conditions she had with Slo-Jo Trading.

Beedle subsequently resigned from the Applicant and took up employment with a direct competitor of Slo-Jo Trading and Slo-Jo Innovation.

The Labour Court found that Beedle's contract of employment had transferred from Slo-Jo Trading to Slo-Jo Innovation in terms of section 197 of the LRA and that she was thus bound by the restraint of trade. It agreed that if the 'new employer' has a proprietary interest worthy of protection it may seek to enforce the provisions of such a restraint.

The Court held that a "contract of employment is transferable under the provisions of section 197 of the LRA, including all the terms agreed to between the parties, not only those that are more favourable than the provisions of the BCEA". Furthermore, the effect of section 197(2)(b) of the LRA is that "if the obligation was in existence at the time of the transfer, it continued in force beyond the transfer".

 

 

Are you unhappy with your arbitration award?

 

A party who is dissatisfied with a CCMA arbitration award may seek to have it reviewed on limited grounds.

It is important to note that the grounds for reviewing an arbitration award are limited and that a party cannot seek to have the award reviewed simply because they disagree with it.

The Sidumo v Rustenburg Platinum Mines Ltd [2007]ZACC 22 case is a landmark decision that provides guidance on the standard of review to be applied in cases where an arbitration award is being challenged.

The Sidumo test, as it has come to be known, requires the court to consider two questions when reviewing an arbitration award:

1. Whether the arbitrator's decision was one that a reasonable decision-maker could have made in the circumstances. This question requires the court to consider whether the arbitrator took into account all relevant facts and applicable law and whether the decision was rational and justifiable.
2. Whether the decision was one that a reasonable arbitrator could have made. This question requires the court to consider the specific context of the dispute, including the nature of the parties' relationship, the nature of the dispute, and the terms of the relevant collective bargaining agreement or employment contract.

The Sidumo test emphasises the importance of respecting the role of the arbitrator as an expert decision-maker and of giving regard to the arbitrator's decision unless it is clearly unreasonable.

Before seeking to have an arbitration award reviewed, it is advisable to consult with an attorney who is experienced to determine whether there are grounds for review and what the prospects of success may be.

New minimum wage and the earnings threshold

The Minister of Employment and Labour increased the earnings threshold and the national minimum wage, effective from 1 March 2023, as follows:

The Earnings Threshold increased to R241,110.59 per annum (ZAR20,093 per month).  

The earnings threshold is defined as an employee’s regular annual remuneration before the deduction of income tax, pension, medical aid, and similar payments, but excluding similar payments/contributions made by the employer in respect of the employee.  Subsistence and transport allowances received, achievement awards and payment for overtime worked are not regarded as remuneration for the purpose of the notice.

Employees earning more than the earnings threshold are excluded from the provisions which regulate ordinary hours of work, overtime, compressed working weeks, averaging of hours of work, meal intervals, daily and weekly rest periods, Sunday pay, pay for night work, and pay for work on public holidays of the Basic Conditions of Employment Act, 1997 (“BCEA”).

Those employees currently earning between ZAR18 673 per month and ZAR20 093 per month will, from 1 March 2023, now join the category of “vulnerable” workers who are entitled to additional rights and protections, including the right to increased rates of pay, in terms of the BCEA.

National Minimum Wage increased to R25,42 per hour or R4,956 per month.

All employees earning below the threshold are subject to the provisions of the BCEA dealing with hours of work, overtime, compressed working week, averaging of hours, meal intervals, daily and weekly rest periods, pay for work on Sundays, night work and work on public holidays.

The increased earnings threshold also affects any temporary employment services (“TES”) employees, i.e., labour broking employees, who are earning between ZAR18 673 per month and ZAR20 093 per month. They will, from 1 March 2023, be deemed the employees of the client of the TES, if they satisfy the requirements of section 198A of the LRA. If employees are not performing temporary work and are placed with the client of the temporary employment service for a period of three months or more, they may be considered permanent employees of the client and not of the TES. If this is the case, employers will also be jointly and severally liable for any non-compliance by the TES with the provisions of the BCEA, and the deemed employees will be able to institute action against their deemed employer for any non-compliance by the TES.

Any fixed-term contract employees who are earning between ZAR18 673 per month and ZAR20 093 per month will from 1 March 2023 be deemed to be permanent employees of the employer if they satisfy the requirements of section 198B of the LRA. Employees who earn below the threshold may be deemed permanent employees if they are employed for 3 months or more without a justifiable reason for fixing the term of the contract. Again, there is a positive obligation on the employer to equalise the treatment of these employees with permanent comparators.

Employers must review and audit their contracts of employment and policies to ensure that these are aligned with the new amounts legislated. They should also conduct audits of their workforce and suppliers of labour to ensure compliance with the BCEA.