Monthly Archives: November 2018

Understanding the functions of the CCMA

I have a dispute which has been referred to the CCMA. How does the process work?

The Commission for Conciliation, Mediation and Arbitration (“CCMA”) is a state-funded institution which acts as the centrepiece of the statutory dispute resolution system in the employment sphere. The CCMA, however, operates independently from the state.

A dispute is referred to the CCMA within 30 days of the date when the dispute arose. When a dispute is referred to the CCMA, the first step in the process is that the Commissioner (the objective party presiding over the matter), who will act as a conciliator, assists the parties to reach a mutually agreed upon outcome. The conciliator cannot make any binding determinations during this process. Therefore, there is no obligation on the parties to accept the suggestions of the conciliator. What is also important to note is that the proceedings are confidential and conducted on a “without prejudice” basis, therefore, whatever is said during the said proceedings cannot be used against either party later in the process. Conciliation is not defined in the Labour Relations Act 66 of 1995 (“LRA”), however, in practice, the Commissioners tend to make use of mediation, conducting a fact-finding exercise, subsequently making a recommendation to the parties, which is regarded as an advisory arbitration award.

After conciliation has failed, the Commissioner will issue a certificate stating that the dispute remains unresolved after conciliation proceedings have been conducted (certificate of outcome). The referring party will then have the option to refer the matter to arbitration by completing an LRA Form 7.13 and serving it on all the relevant parties, including the CCMA, within 90 days after the date on which the certificate of outcome was issued. The director of the CCMA may direct that the parties conduct a pre-arbitration conference. The purpose of the said conference is so that the parties can simplify the matter and clearly define what the dispute is.

Arbitration is essentially a hearing based on the merits of the dispute. The arbitrator will give all the parties an opportunity to prove and argue their case. After the arbitrator has heard the parties’ cases, the arbitrator must make a finding, which any reasonable decision-maker could come to based on the available evidence. Reasons for the arbitrator’s decision may be provided. The arbitrator’s decision is final and binding on the parties, subject to a review application in the Labour Court. The arbitrator may also make an order as to costs in accordance with the CCMA rules.

It should also be noted that in 2002, amendments to the LRA were introduced, which also provide for what is now known as “con-arb”. What this entails is that the Commissioner will have to commence arbitration immediately after conciliation was found to be unsuccessful. However, a party to the proceedings may object to con-arb, whereafter the procedure as discussed above will then follow in the alternative.

When a dispute is referred to the CCMA, the first step in the process is that the Commissioner will attempt to settle the matter by way of conciliation which might include mediation, conducting a fact-finding exercise, subsequently making a recommendation to the parties, which is regarded as an advisory arbitration award. When the dispute remains unresolved, the matter will then be finalised on arbitration.

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This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

A promoter’s legal compliance checklist

The CPA replaced the repealed Lotteries Act 57 of 1997 and became effective on 1 April 2011. Section 36 of the CPA imposed the stringent definitions of a “promoter” andpromotional competition”, which includes competitions where prizes can be won regardless of whether a participant shows any skill or ability. Given these rather wide definitions and the very low-value threshold of R1.00 prescribed in terms of Regulation 11(4) of the CPA Regulations, it is clear that the vast majority of competitions conducted in South Africa from 31 March 2011 will be governed by the CPA.

Promoters, including promoters of SMS or MMS competitions, will be in contravention of the CPA where:

  • they indicate that a participant has won a competition if no competition has been conducted, the person has, in fact, not won the competition or the person is required to meet a previously undisclosed condition or to pay a further sum of money in order to receive the prize; or
  • a participant is informed that he has a right to a prize when, in fact, he does not have such right, where the prize was generally offered to other similar participants, or where the participant is required to pay a further amount for the prize or to purchase any goods or services.

Crucially, section 36(3) requires that a promoter should “not require any consideration to be paid by… any participant… other than the reasonable costs of posting or… transmitting an entry” and Regulation 11(1) specifies that the “reasonable cost of electronically transmitting an entry shall not exceed R1.50”.

A promoter would similarly fall foul of the CPA, where he requires participants to make payment for the opportunity to participate in the competition or where he requires the purchase of any goods or services and the price charged for those goods or servicesis more than the price… ordinarily charged for those or similar goods or services without the opportunity of taking part in (the) competition”.

For the purposes of ensuring fairness, the CPA requires that a promoter may not award a prize to any person who is a director, member, partner, employee or agent of, or consultant to, the promoter or to the supplier of any goods or services in respect of the competition.

Practical Requirements

A promoter should ensure that his invitation for participants to take part in his competition includes details on:

  • how a participant should accept the invitation to participate;
  • how the results will be determined;
  • the competition’s closing date;
  • the means by which the results of the competition will be made public; and
  • the person from whom or the place from where a copy of the competition rules may be obtained.

The promoter will be deemed to have satisfied these requirements if this information is available directly on the medium through which a person participates in the competition, on a document accompanying any medium or in any advertisement which is published, and which draws attention to the promotional competition.

Any provision in the rules of a promotional competition requiring a prize winner to:

  • permit the use of his image in marketing materials;
  • participate in any marketing activity; or
  • be present when the prize draw takes place, or the winners are announced,

without offering him the opportunity to decline such requirement, will be null and void.

The Regulations also require the promoter to ensure that certain specified professional persons oversee and certify the manner in which the competition was conducted and report his/her findings through the promoter’s internal audit reporting or validation and verification procedures. There is also a strict requirement regarding record keeping for a period of 3 years.

Non-compliance by promoters of the provisions of the CPA and its Regulations may result in the competition being declared void and in contravention of the CPA. The imposed offences under the CPA range from a fine or imprisonment (or both) for a period not exceeding 10 years or a fine or imprisonment (or both) for a period not exceeding 12 months or to both, depending on the severity of the contravention. In addition, administrative fines imposed by the Tribunal in respect of prohibited or required conduct is particularly onerous as such fines are set at the greater of 10% of the guilty party’s annual turnover during the preceding financial year or R1 million.

Conclusion

Promoters of promotional competitions and, in particular, competitions conducted using SMS or MMS technology, should ensure that they are aware of the various requirements and obligations placed upon them by the CPA. Great care should be taken when conducting competitions which will fall within the realm of the CPA as and from 31 March 2011, since the Commission and the Tribunal are likely to take a very dim view of promotional competitions which do not comply with the requirements of the CPA and its Regulations.

Reference List:

  • The Lotteries Act 57 of 1997
  • The Consumer Protection Act 68 of 2008 and its Regulations
  • Naudé T & Eiselen S, Commentary on the Consumer Protection Act, Juta, 2014

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

The termination of joint ownership

Nature of joint ownership:

Joint owners own undivided shares in the property which they own jointly. Consequently, the joint owners cannot divide the joint property while the joint ownership remains in existence, and a joint owner also cannot alienate the property or a part thereof without the consent of the other joint owner. The rights in respect of the joint property need to be exercised jointly by the owners thereof.

Ways in which joint ownership can arise:

Joint ownership can come into existence by way of an inheritance in which an indivisible property is left to more than one person in indivisible shares; by way of a marriage in community of property, by the mixture of movable property in such a way that it forms a new movable item or by way of an agreement in terms of which the parties agree to jointly buy a property and that both will have equal indivisible shares in the property.

Division of joint property:

Any joint owner can claim the division of the joint property according to that joint owner’s share in the property.[1] It is a requirement for the division of the joint property that the parties need to try to divide the property among themselves first, before approaching the Court for an action to divide the property, which action is called the actio communi dividendo[2].

The underlying principle of the actio communi dividendo is that no co-owner is normally obliged to remain such against his will. If there is a refusal on the part of one of the co-owners to divide, then the other co-owner can go to Court and ask the Court to order the other to partition. The Court has a wide discretion in making a division of the joint property, which is similar to the discretion which a court has in respect of the mode of distribution of partnership assets among partners.

The Court may award the joint property to one of the owners provided that he/she compensate the other co-owner, or cause the joint property to be put up to auction and the proceeds divided among the co-owners.[3] Where there is no agreement between the parties as to how the joint assets are to be divided a liquidator is ordinarily appointed, and he can then sell the assets and divide the proceeds, if it is not possible to divide the assets between the parties.[4] If the immediate division of the joint property will be detrimental to the parties, the Court can order in certain cases that the division or the sale of the property be postponed for a period.[5]

It is beneficial that there exist means to divide assets which are jointly owned by parties, who no longer wish to be co-owners, but who cannot reach an agreement on the division of the assets. Without such an action, people might be stuck with a property which they derive no benefit from because it is in the possession of the other co-owner, who refuse to sell the property.

  • [1] Inleiding tot die sakereg, Van Niekerk & Pienaar, Juta, p 53 – 61.
  • [2] Robson v Theron 1978 (1) SA 841 (A).
  • [3] 1978 (1) SA 841 (A).
  • [4] 1978 (1) SA 841 (A).
  • [5] Van Niekerk & Pienaar, p 61 – 62.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

What are the limitations in respect of the deductions on my salary?

A client poses a question to their attorney: My employment contract makes provision for deductions from my salary and now my employer wants to deduct money. What are the limitations in respect of deductions that can be made?

As a general point of departure, deductions can only be done once the employee has given written consent to such deductions. However, the employer is also entitled to deduct money when there is a legal obligation to do so, for example, in terms of a collective agreement, legislation, a court order or arbitration award. Deductions of employee’s salaries are regulated by section 34 of the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”).

A typical scenario would be that the employment contract will contain a clause which provides that “the employer has the right to deduct from your remuneration any amounts due by you to the employer”. This amount can include, inter alia, any expenses the company has incurred on behalf of the employee; unauthorised expenses; expenses relating to the employee’s negligence, etc.

The deductions which employers can legally make includes tax deductions, contributions to the Unemployment Insurance Fund (UIF), union membership fees, medical aid, pension or provident fund contributions, any agreements with the employee to pay back debts, deductions in terms of garnishee orders, etc.

Employers acquire written consent for any other form of deductions. If the employment contract does not make provision for a deduction clause, the employer is then required to draft an additional agreement or make an amendment to the employment contract to make provision for such deduction. However, the employee needs to freely and voluntarily sign the said agreement or amendment.

What is significant to note in this regard is that before this deduction may be made, the employer has to comply with the following requirements: the loss or damages caused by the employee must have happened during the course of their employment; the employer must follow a fair procedure and the employee must be given a reasonable opportunity to show why the deduction should not be made; and the total amount of the deduction should not exceed the actual amount of the loss or damages. Therefore, in respect of this last point, it is important that the employer provides actual proof of the loss or damages in order to quantify the amount.

Furthermore, in a scenario where your employment contract contains a clause similar to the aforementioned example, employers tend to feel that these types of clauses give them unrestricted discretion to deduct monies. However, it must be borne in mind that section 34(2)(d) of the BCEA further restricts the amount which the employer may deduct to 25% (one-quarter) of the employee’s salary. Therefore, the employer is not allowed to subtract the full amount of damages/loss suffered from one deduction.

In conclusion, when signing an employment agreement, take note of whether there is a deduction clause contained in the employment agreement. Employers may want to make deductions during the employment, or alternatively once the employment relationship has ended. If your employment contract contains such a clause, it is important to be aware that these deductions can only happen in specific instances, if they are not governed by statutory law, a court order or any other written agreement.

Sources:

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).