Can an employer make deductions on an employee’s salary without consent?
Stein v Minister of Education and Training and Others (LC) (unreported case no J415/20, 14-5-2020) (Mahosi J)
In terms of s 34(1) of the Basic Conditions of Employment Act 75 of 1997 (BCEA), the employer may make deductions from the employee’s salary under the following circumstances, if –
o the employee agrees in writing to the deduction in respect of a debt specified in the agreement; or
o the deduction is required or permitted in terms of a law, collective agreement, court order or arbitration award.
In terms of s 34(5) of the BCEA the employer may require the employee to repay remuneration paid erroneously to the employee. Therefore, the question that arises is whether the employer can make deductions from the employee’s salary under other circumstances that are not those mentioned above.
The issue of salary deductions has often been argued in South African courts and it is an intriguing subject.
The Stein case has once again showed us that employers can make deductions from the employee’s salary even though the circumstances are not those mentioned under s 34.
Background of the facts
In the Stein case, the employee failed to submit the leave forms that were given to him to complete arguing instead that he was not on leave but working outside the office on matters assigned to him. Therefore, due to the employee’s failure to complete and submit the leave forms, the employer declared the days that the employee was not at work as unpaid leave and deducted the employee’s salary for those specific days.
The employee averred that the deductions were unlawful because he did not consent to them being made against his salary as required by s 34 of the BCEA nor were they permitted by law, court order or by a collective bargaining agreement. He asked that the deductions be declared unlawful, and a consequential order be made that the deductions already made be reversed within 15 working days.
The Labour Court (LC) held that s 34 permits an employer to make deductions under certain prescribed circumstances and on the reading of the subsection, the employer is required to obtain an employee’s consent before making a deduction in respect of a debt specified in the agreement. This postulates for a situation where the employee acknowledges their indebtedness. The section does not provide for a situation where there is no agreement between the parties.
The LC held that in Stein’s case, the employer notified the employee that the days he had been absent would be treated as unpaid leave. The employer proceeded to obtain an approval for deductions to be made from the employee’s salary in respect of those days that he was not at work. Deductions for days the employee was not at work constitute recoupment for payment done in circumstances where it is not supposed to have been made. The employer is recovering an amount in respect of an overpayment previously made.
An employee is, by law, required to be at work and render service to the employer in exchange for payment. The BCEA defines ‘remuneration’ as ‘any payment in money or in kind, or both in money and in kind’, made or owing to any person in return for that person working for any other, including the state.
Where an employee is absent from work and fails to submit the leave forms in accordance with the policy, the employer is entitled to withhold payment. In instances where they had already effected payment, the employer should be allowed to recover it without the consent of the employee.
Key principles of the judgment
The employer must comply with several requirements, such as
o the employer must follow a fair procedure and give the employee a reasonable opportunity to show why the deductions should not be made;
o the total amount of the debt must not exceed the actual amount of the loss or damage; and
o the total deductions from the employee’s remuneration must not exceed one-quarter of the employee’s remuneration in monetary terms.
The key lessons from this judgment are that
o employees are entitled to be remunerated for days on which they have tendered their services to the employer; and
o employers are entitled to make deductions on employees’ remunerations for days on which employees were absent from work and not rendering services to the employer.
The principle of ‘no work, no pay’ is of paramount importance in the employment arena and the employer does not need the consent of the employee to deduct their remuneration for days on which the employee was absent from work. Section 34 does not preclude an employer from making such deductions.