Author: My Lawyer (page 1 of 24)

Important ingredients for the business recipe

“There are those who make it, those who sell it, and those who look after the money.”

So, you have finally taken the plunge – you have taken your hard-earned savings and decided to invest it in your new start-up. This was a natural decision for you since you have all the right technical skills, have gained valuable experience through years of diligent work at your previous employer, and you finally feel confident enough to carry the flag on your own. You are passionate, have all the necessary resolve, have done your research, and are ready to go… or are you?

Young entrepreneurs are often quickly caught up in the common misconceptions and clichés of business success – all you need is hard work and perseverance, if you are knowledgeable and good at what you do, clients will want to use your services, if you produce quality products, people will buy it, etc.

The fact is, however, that it takes much more than a quality product or service to build a successful business. You need to get the right people interested in what you are offering, to understand why it is important, and how it can positively affect their lives. Passion and resolve combined is a good foundation on which to build, but you need to think about how to establish your business brand, how to protect your intellectual property, how to place your products or services in the right markets, etc.

To facilitate these processes, it is important to understand what costs will be involved, how it will be funded, how the returns will be monitored, what key performance indicators need to be established and monitored to measure performance, and what accounting and reporting systems need to be in place to drive the above.

Although there are many very talented people in the world, there are few who have the mental and physical capacity to master all the ingredients necessary to master business success. No person is an island, and perhaps business success is less about your individual talents, than the unique talents of the team you manage to assemble.

You simply cannot be everything to everyone. So if you are embarking on your journey, let us help you facilitate partnerships to help you place your product and/or service in the right markets, and to assist you in looking after the money, while you focus on the reason you started your venture in the first place… MAKING IT!

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)

Matrimonial property regimes

My partner and I are getting married soon and have heard about the different matrimonial property regimes one can enter but I am not sure what the difference is and what each one entails.

There are three types of matrimonial property regimes in South Africa. The three are marriage in community of property, marriage out of community of property with the inclusion of the accrual system and marriage out of community of property with the exclusion of the accrual system. When parties decide on either of the two latter, they must enter into a contractual agreement with one another before a notary public. It is important to understand what they all entail before one gets married.

Marriage in community of property is the so-called “default” regime, because all marriages are deemed to be in community of property if an Antenuptial Contract is not concluded before the marriage. This is also the most popular regime because it is the easiest one to conclude. When two parties get married in community of property, their estates will be joined together. Every asset and liability each party had before getting married and acquires during the marriage will become one estate and on dissolution of the marriage, the estate will be divided equally between the parties.

This system is based on the theory that each spouse, whether employed or at home running the household, contributes equally to the marriage and on dissolution of the marriage is entitled to share equally in the joint estate. It is important to note that when one enters this type of matrimonial regime, in some instances consent will be needed from the other party. One of the biggest disadvantages of this system is that if one party incurs debt, the debt will form part of the joint estate.

When one enters into a marriage out of community of property with the accrual system, it means that the parties entered into a contractual agreement with one another, which is known as an Antenuptial Contract. This contract must be entered into before a notary public and has to be registered at the Deeds Office. In this regime, the two estates of the spouses before the marriage remain separate. No consent will be needed from the other spouse in order to handle his/her own affairs. The accrual system will be applicable at the dissolution of the marriage or upon death, whichever may occur first.

What happens with the accrual is that whatever the parties acquired during the existence of the marriage, will be compared and the half of the difference in accrual will be owed by the estate which shows a larger accrual. On dissolution of a marriage out of community of property with the accrual system, inheritances and donations received by a spouse from a third party will not be included in the accrual.

In a marriage out of community of property without the accrual system, each party’s estate will remain separate. This system enables parties to control their own estate and affairs independently and on the dissolution of marriage, the parties will retain their own assets and liabilities. It is important to note that even if parties are married out of community of property excluding the accrual system, both parties will have to contribute to the household as a married couple – it is one of the duties that arises from marriage.

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)

Corporate governance: Retention of company records – original, electronic signed documentation vs copies

The Companies Act 71 of 2008 (“Companies Act”) addresses various aspects not adequately dealt with in the old Companies Act 61 of 1973, including the use of:

  • information in electronic form;
  • electronic communications; and
  • technology.

The Companies Act recognises electronic communications as defined in the Electronic Communications and Transactions Act 25 of 2002 (“ECT Act”), to  be a “communication by means of data generated, sent, received or stored by electronic means and includes: (a) voice, where the voice is used in an automated transaction; and (b) a stored record.”

The Companies Act provides for electronic compliance. In many ways, it eases the administrative burden by enabling people to use technology and the electronic form of documents and communications.

The Companies Act requires that companies retain certain documents, records or statements. Examples of these include:

  • a copy of its Memorandum of Incorporation, and any amendments or alterations;
  • a record of its directors with certain specified details; and
  • accounting records.

In terms of this section, it is sufficient if any electronic original or reproduction of the document is retained as provided for in section 16 of the ECT Act. In terms of section 16 of the ECT Act, a company will meet the requirement of the Act to retain information if:

  1. the information is accessible “so as to be usable of subsequent reference”;
  2. it is in the format in which it was generated, sent or received, or in a format which can be demonstrated to accurately represent the information generated, sent or received; and
  3. the origin and destination of that data and the date and time it was sent or received can be determined.

Where the Companies Act requires a document to be signed or initialled, the person may sign or initial by using an electronic signature as provided for in the ECT Act. For example, a Memorandum of Incorporation can now be signed electronically as well as resolutions passed by the board of directors and shareholders of a particular company – no more posting resolutions around the country, or printing, signing and scanning them. Once Annual Financial Statements have been approved by the Board, an authorised director may sign the statements with an electronic signature.

In terms of section 63 (2) of the Companies Act, a company can now conduct shareholder meetings by electronic communication, as long as the Memorandum of Incorporation does not prohibit it. The entire meeting can be conducted electronically, alternatively, certain shareholders can participate through electronic means. In case of the latter, all persons must be able to communicate concurrently without an intermediary. Shareholders must also receive notice that electronic participation will be available.

According to section 73(3) and 74(1) of the Companies Act, board meetings can occur by way of electronic means, as long as the Memorandum of Incorporation does not provide otherwise. A decision to be voted on at a board meeting can now also be adopted through written (including “electronic writing”) consent of the majority of directors, provided that all directors have been notified of the matter and the Memorandum of Incorporation does not prohibit it. Therefore, an email vote will suffice.

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 factors are taken into account by the Court when considering a formal bail application?

The granting of bail is in the nature of a contract in terms of which the state commits itself to the accused’s continued interim freedom once the court has authorised his release, while the accused commits himself to stand trial. It is apparent that the contracting parties are the state and the accused, although the discretion to grant bail vests in court.

Underlying the concept of bail is the presumption of innocence, whereby every person is presumed to be innocent until he or she is found guilty. Although not intended as a punitive measure, pre-trial incarceration nevertheless carries a penal element in that it deprives a prima facie innocent person of his freedom.

In most bail applications the onus rests on the state to persuade the court that the accused should not be released on bail. However, in Schedule 5 and 6 bail applications, which includes offences such as murder and premeditated murder the onus rests on the accused to persuade the court. In terms of schedule 5 bail applications, the accused needs to satisfy the court that interests of justice permit his or her release on bail, where in terms of Schedule 6 bail applications the accused needs to show that there are exceptional circumstances that permit the accused’s release on bail.

Essentially bail applications are governed by section 60 of the Criminal Procedure Act 51 of 1977 (“The Act”). Section 60 of the Act provides a number of factors to be taken into account by the court in either granting or refusing bail.

One of the important factors the court needs to consider is whether an accused person is a flight risk. In determining whether an accused is a flight risk, an accused needs to show that he or she has assets situated within the jurisdiction of the court, he or she has emotional, family, community or occupational ties within the court’s jurisdiction, and that the accused does not possess any travel documents or alternatively handed in the travel documents to the investigating officer.

A second factor to be taken into account is whether the accused will interfere with potential state witnesses. First, the court will consider whether there has been actual interference with state witnesses by the accused, secondly the court will consider interference with state witnesses by the accused in previous cases, and lastly in the absence of actual interference in the pending case or previous case the court will look at the fears of interference.

A third factor to be taken into account is whether the accused will commit further crimes whilst on bail. In terms of this factor, the court will look at the disposition of violence on the part of the accused, as it is evident from his or her past conduct and a threat of violence which the accused may have made to any person.

Lastly, personal factors of the accused may play a crucial role in the court granting bail. Personal factors of the accused include factors such as the fact that the accused is in poor health, the advanced age of the accused, the fact that the accused is particularly young, the fact that the accused has dependants to support, and the financial position of the accused.

In conclusion, there are various factors that are taken into account by our courts when deciding whether to grant or refuse bail. Most importantly, the presumption of innocence plays an imperative role in formal bail applications.

Reference List:

  • The Criminal Procedure Act 51 of 1977
  • Van der Berg J, (2013) Bail: A Practitioner’s Guide, Juta

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)

Homeowner’s insurance for landlords

Apart from paying off a bond on a rental property, property investors/landlords are usually also paying for homeowner’s insurance. What is homeowner’s insurance? Homeowner’s insurance covers the property owner against damages to the structure of the property. This damage could be caused by flooding, fire, wind, hail or other natural causes.

However, the above is not the case with all homeowner’s insurance policies. If you have a standard homeowner’s insurance policy, you might not be protected against any damages that occur while the property is occupied by a tenant or empty. Additionally, this policy might also not cover you for loss of rental income when the property cannot be occupied due to damages.

It’s important to take note of the terms of your policy. Most banks won’t approve a bond unless you have homeowner’s insurance, however, if you are a landlord, it would be wise to check the specific terms of your policy, as you need to ensure that your insurer is aware of the fact that your property is occupied by tenants and not by you, the owner. It’s also important to check if there are any provisions in your policy which prevent you from renting to a certain category, for example, students.

It’s also very important to check if the sum insured stated on your policy is the full replacement cost of the property, and not just its market value, as this could be higher or lower.

The correct coverage might be more expensive, however, paying a little more on your premium is better than finding out that your cover is not valid in the event of a disaster hitting your property. It’s important for new homeowners to know that they do not need to accept the homeowner’s insurance offered by their bank; they are entitled to shop around for the perfect insurance for their needs and requirements.

Keep in mind, you might not have as much flexibility if your property is situated in sectional title schemes because there will be only one homeowner’s insurance policy for the whole building or complex. The premium will have to be paid either annually or monthly by all the members of the body corporate.

Additionally, there are several other insurance matters for landlords to be aware of, which include household contents that belong to tenants that must be insured by them; the landlord is not responsible for any damage or theft of tenants’ possessions. However, if you are renting your property furnished, you will need to take out a separate household contents policy to cover the furniture and equipment that belong to you.

In conclusion, if you are renting your property, always make sure that you check your policy, to save yourself both time and money in the event of damage to your property.

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 positive attitude is key to career success

Maintaining a positive attitude in the workplace could benefit your career and bring you one step closer to that promotion that you have been working towards. When employers are on the hunt for prospective employees to join their teams, a positive attitude is definitely on the list of prerequisites.

In today’s world, it has become increasingly difficult to maintain a positive attitude in the workplace on a daily basis. With to-do lists getting longer, deadlines looming, and obstacles having to be faced, this comes as no surprise. However, if you struggle to maintain a positive attitude, there are certain tips and tricks that you can incorporate into your daily life that will help you develop and maintain the positive attitude you need for professional success. These tips include:

  1. Do not criticise

It is always important to remember that there is a difference between criticism and constructive feedback. When addressing a co-worker’s/employee’s performance, start the conversation off with pointing out something that he/she has done well and then follow it up with a suggestion of how they can improve their performance.

  1. Do not engage in office gossip

Gossip can have a very negative effect on teamwork. It does not matter whether team members are gossiping about other colleagues or situations at home, it is best to avoid office gossip altogether. If, however, you find yourself engaged in gossip, act as a listener but do not add any input. Maintaining a positive attitude in the workplace means that you’re always a team player, which means that you respect your team members, and when you refrain from gossiping and adding any input, you will maintain your level of respect.

  1. Remember that teamwork comes first

Make sure to let your team members know when they have performed well. Compliments and acknowledgement will foster a positive environment for your team members to thrive in. The same can be said for obstacles encountered by your team members. When the team is faced with an obstacle, offer solutions rather than problems, and do not focus on the negatives. When you approach obstacles with a positive outlook, your team will start to adopt this outlook.

  1. Do not complain

Undoubtedly, every day is not going to be a good day, this is a part of life. However, do not let your team members know that it is a bad day. If you are in a bad mood, make sure to walk it off before entering the office. Give yourself time to process, that way, when you enter the office, you can make fun of your bad start to the day, rather than complaining and ruining your team members’ days. Laughing is the best remedy to ensure that you keep the work environment positive, while ranting will add negativity to the workplace, and set the tone for the rest of the workday.

Now that we know how to be more positive in the workplace, let’s look at why it is important to be positive:

  1. Take care of your health

Maintaining a positive attitude in the workplace can effectively keep your stress levels at bay. We all know that stress can have a negative impact on your overall health, as stress can wear you down over time and affect your immune system. Maintaining a positive attitude will combat this stress and enable you to excel within your position.

  1. Have a positive impact on your team members

Positivity can be infectious, and if you maintain a positive attitude, it will surely rub off on your team members. No one wants to be around someone who is constantly negative, and you will set the example. Soon, your team will thrive and overcome every obstacle effectively and efficiently.

  1. Take one step closer to that promotion

Management will always keep an eye out for team members who are positive and can overcome any obstacle without being dragged down by negativity. If you maintain a positive attitude on a daily basis, you will be favoured for a promotion when the time comes.

As seen above, maintaining a positive attitude in the workplace can be accomplished if you work at it every day, and employ these tips in your everyday life. Once you have mastered being positive, you will experience less stress, and take that step towards the career success you’ve been waiting for.

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)

Maintenance of surviving spouse

The idea of freedom of testation is a core value of South African law and enjoys wide protection. The Maintenance of Surviving Spouses Act, 27 of 1990, was drafted to give a spouse legal recourse if disinherited or negatively affected by the wishes of the testator, or in the case of intestate succession. The goal of this piece of legislation is to ensure a person is not left destitute after the death of their spouse.

Who can claim?

The definition of the Act describes a surviving spouse as follows:

survivor means the surviving spouse in a marriage dissolved by death.”

What can be claimed?

Section 2(1) of the Act determines as follows:

“If a marriage is dissolved by death after the commencement of this Act the survivor shall have a claim against the estate of the deceased spouse for the provision of her reasonable maintenance needs until her death or remarriage in so far as she is not able to provide therefor from her own means and earnings.

What is the definition of own means?

“own means” include any money or property or other financial benefit accruing to the survivor in terms of the matrimonial property law or the law of succession or otherwise at the death of the deceased spouse.”

What is reasonable maintenance means?

Section 3 of the Act determines as follows:

“Determination of reasonable maintenance needs – In the determination of the reasonable maintenance needs of the survivor, the following factors shall be taken into account in addition to any other factor which should be taken into account:

  • The amount of the estate of the deceased spouse available for distribution to heirs and legatees;
  • The existing and expected means, earning capacity, financial needs and obligations of the survivor and the subsistence of the marriage; and
  • The standard of living of the survivor during the subsistence of the marriage and age at the death of the deceased spouse.”

The executor of the deceased estate has to take the requirements above into account when determining the amount of the claim against the estate.

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)

Medical negligence claims?

In Links v MEC for Health, Northern Cape 2016 (5) BCLR 656 (CC), the Constitutional Court examined this issue and granted a judgment with potentially far-reaching consequences for medical negligence matters.

On 26 June 2006, Mr Links (“Links”) sustained a dislocated thumb for which he was treated with a cast and painkillers. On 5 July 2006, Links’ thumb was amputated. He was discharged in August 2006 and sought legal advice shortly afterwards.

On 6 August 2009, action was instituted by Links against the MEC for Health, Northern Cape, after having obtained an expert opinion confirming grounds of medical negligence. On the strength of Section 12(3) of the Act, the MEC for Health’s special plea of prescription was upheld by the Court a quo and full bench of the Northern Cape. Links was granted leave to appeal to the Constitutional Court.

The Constitutional Court held that:

“Until there are reasonable grounds for suspecting fault so as to cause the plaintiff to seek further advice, the claimant cannot be said to have knowledge of the acts from which the debt arises.”; “Without advice at the time from a professional or expert in the medical profession, the claimant could not have known what caused his condition.”

The Court accepted that at 5 August 2006, despite Links’ knowledge of the amputation which compelled him to seek legal advice, he did not have knowledge of the negligence of the staff until he obtained an expert medical opinion.

The Court held that the Court of First Instance appeared to have overlooked the question of whether Links had the full facts necessary for him to institute his claim on or before 5 August 2006. Before the end of August, Links could not have had access to independent medical professionals nor could he have had knowledge of all the material facts that he needed before he could institute legal proceedings. Links did not have reasonable grounds to suspect that his negligent treatment at the hands of the defendant’s personnel had caused the amputation of his thumb and the loss of function of his left hand. Prescription could therefore not have begun running before 5 August 2006. The Court accordingly held that Links’ claim had not prescribed, and in doing so, upheld the appeal and set aside the order made by the Court of First Instance.

An unintended consequence of this finding is that a defendant alleging prescription of a medical negligence claim, cannot show deemed knowledge on the part of the plaintiff for the purposes of Section 12(3) of the Act, without also showing when the plaintiff obtained such legal or medical advice.

The magnitude of the law of prescription is that there exists no condonation where the institution of the action in the Court is out of time. Accordingly, a creditor may not institute legal action against the debtor to recover the debt once the period of prescription has run its prescribed course, as the debt would have become extinguished by prescription. As such, once the full facts necessary to institute a claim are present, a creditor must immediately proceed to institute legal action to mitigate against the risk of the claim prescribing.

It is therefore crucial that creditors remain vigilant of the date that prescription commences to run and, in particular, the dates upon which a Court may deem a debt to fall due.

Reference List:

  • The Prescription Act, 68 of 1969;
  • Links v Member of the Executive Council, Department of Health, Northern Cape Province
    2016 (5) BCLR 656 (CC);
  • Dutton I (2015) “The Practitioner’s Guide to Medical Malpractice in South African Law”

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)

Interim maintenance until date of divorce – husband’s nightmare and wife’s weapon?

This article gives an overview of the purpose of interim maintenance applications, what considerations are to be taken into account when determining maintenance, the difference between the nature of an interim maintenance application in the Regional Court and High Court, and the possible detriment to husbands with an interim maintenance order against them.Given the complicated nature of divorce proceedings, and the length of time required to finalise a divorce, the existence of interim relief until the date of divorce is often required by a party to a divorce who have been maintenance dependent on the other party during the subsistence of the marriage.

Rule 58 of the Magistrates’ Court Rules and Rule 43 of the Uniform Rules of Court make provision for a spouse to claim interim maintenance during the litigation process, a contribution towards costs of the pending matrimonial litigation, interim care of a child and interim contact with a child.

Rule 43 is being used far more often than Rule 58, because in the High Court it can take up to three years to get a trial date for a defended divorce, whereas, in the Regional Court, a defended divorce can be finalised within a few months. Therefore, interim maintenance is more important in High Court proceedings, because a party will have no other choice but to maintain himself/herself for up to three years until the divorce is finalised. Especially in the case of housewives who raised the children and cared for the home but have not been working or have not been economically active for years, a three-year wait for a trial date can result in a dire financial situation, if no provision is made for their maintenance until the date of divorce.

The other side of the coin is that a husband with a Rule 43 order against him, can be forced to pay maintenance for quite a lengthy period, especially if his wife as the plaintiff is well taken care of in terms of the Rule 43 order, then she will probably not be in a hurry to take the matter to trial.

A party can be entitled to a contribution towards legal costs. If a husband can afford a lawyer and good legal representation, his wife can be put in a position to litigate on an equal basis, by a Rule 43 or Rule 58 order compelling a contribution towards the wife’s legal costs.

Since it is possible to get a trial date in the Regional Court quite speedily, magistrates are often not inclined to waste too much time on an interim maintenance application, because it will not have a long-term effect, and it is better to determine the issue of maintenance at trial.

Rule 43 and Rule 58 orders cannot be taken on review, and cannot be appealed against, thus a husband with a detrimental Rule 43 or Rule 58 order against him can only apply for a variation of the original order, based on a change in financial circumstances. However, if he can afford to comply with the order, he has no other choice but to comply, and a failure to comply can lead to a contempt of court application against the husband. Rule 43 or Rule 58 orders can sometimes lead to parties settling the whole divorce sooner, especially in the High Court where a party will be compelled to comply with the Rule 43 order for three years.

The following factors are taken into account in the determination of maintenance: existing or prospective means of each of the parties, their respective earning capacities, financial needs and obligations, the age of each of the parties, the duration of the marriage, the standard of living of the parties prior to the divorce, their conduct so far as it may be relevant to the breakdown of the marriage, and any other factor which in the opinion of the court should be taken into account.

In Taute v Taute 1974 (2) SA 675 (E), it was determined that interim maintenance will be determined according to the “marital standard of living of the parties, her actual and reasonable requirements and the capacity of her husband to meet such requirements.” It was further held that, “I have found nothing, however, in the decisions to which I have been referred which justify in such maintenance the inclusion of extraordinary or luxurious expenditure even in the case where the husband is ‘very wealthy’ or ‘very rich’.”  This decision makes it clear that a wife will not be entitled to anything that she was not entitled to during the subsistence of the marriage, and that a court will not make a finding for luxurious expenditure.

Kroon v Kroon 1986 (4) SA 616 (E) held that, “The position in our law is that no maintenance will be awarded to a woman who can support herself.”  It was further held that, “What does the plaintiff want and what does she need? Wants and needs are two different things. People usually want more than they need.” This decision makes it clear that a woman who has no need for maintenance, because she earns an income and can support herself, will not be entitled to maintenance.

If parties were married for a long period of time, a party would be more likely to get interim maintenance, and permanent maintenance at trial. Furthermore, the age of the parties would play a significant role in determining interim maintenance and permanent maintenance, because, for example, for a 60-plus woman with no formal education, and who have no formal work experience, it will be difficult to obtain employment.

In Nilsson v Nilsson 1984 (2) SA 294 (C), it was determined that, “The shorter the duration of the marriage, the more important the conduct of the parties within the relationship – their respective ‘guilt’ or ‘innocence’ – would ordinarily be in relation to the question whether maintenance should be paid at all.” If a woman is responsible for the breakdown of the marriage, her conduct would weigh against her getting interim maintenance, especially in the case of a short marriage.

Interim maintenance remains a thorny issue, and in an ideal world, such orders would not have been necessary at all, which is more or less the case in a Regional Court divorce. However, in the High Court, it remains an important instrument to ensure that a divorce is handled in a fair manner, and that a wife is not being left without maintenance, or unable to effectively litigate against her husband.

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)

Migrant workers – is there any social insurance for them in the employment sphere?

In South Africa, not all risks are catered for by public schemes. The current public social schemes exist to deal with particular contingencies such as: unemployment, maternity, traffic accident-related injury or death, unemployment and employment injuries and diseases. When it comes to old age and health, private insurance schemes are considered. This position is the same for both employees ordinarily working in the country and migrant employees.In the employment sphere, however, social insurance for migrant employees are limited to only certain circumstances.

The Compensation for Occupational Injuries and Diseases Act, 130 of 1993 (“COIDA”) provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, or for death resulting from such injuries or diseases; and to provide for matters connected therewith. According to section 23(3)(b) of COIDA, where an employee performs his/her duties within South Africa for a period longer than 12 months, that employee is deemed to be employed in the Republic and, therefore, enjoys the protection of the Act. This principle is also applicable to persons who ordinarily work in the Republic, however, performs work on a temporary basis outside of South Africa.

Therefore, migrant workers also qualify for protection under COIDA. However, there is a duty on the employer to make the necessary arrangement for those employees with the Commissioner.

Where it is a case of a non-resident employee who qualifies for protection in terms of COIDA and social protection in another country where he/she performs work, following an occupational injury, he/she must elect to claim compensation either in terms of COIDA or in terms of the law of the other country.

When it comes to unemployment insurance, migrant employees seldom enjoy protection under the Unemployment Insurance Act, 63 of 2001 (“UIA”). According to section 3(1)(d) of the UIA , persons who enter the country for the purpose of carrying out a contract of service , apprenticeship or learnership, are not covered by the Act, if there is a legal or a contractual requirement (agreement or undertaking) that such a person must leave the country, or that such a person be repatriated, upon termination of the contract. Therefore, the employer and migrant employee will not be contributing towards the Unemployment Insurance Fund (“UIF”).

Unfortunately, this leaves migrant employees to be vulnerable and exploited by South African employers as they are seen as a “cheaper” labour option.

In South Africa, public insurance schemes mostly protect employees that are part of the formal sector. Therefore, the migrant employees who find themselves in the informal sector will not enjoy the limited coverage of South Africa’s public insurance schemes.

Accordingly, migrant employees are not protected to the same extent as employees ordinarily working in South Africa. However, legislation such as COIDA and UIA do provide for coverage for migrant employees in limited circumstances. This limited coverage usually only get utilised by employees in the formal sector.

In South Africa, not all risks are catered for by public schemes. The current public social schemes exist to deal with particular contingencies such as: unemployment, maternity, traffic accident-related injury or death, unemployment and employment injuries and diseases. When it comes to old age and health, private insurance schemes are considered. What is the position when it comes to migrant workers? Are they protected?

Migrant workers enjoy very limited social insurance coverage in South Africa under the Compensation for Occupational Injuries and Diseases Act, 130 of 1993 and the Unemployment Insurance Act, 63 of 2001.

Reference List:

  • A van Niekerk, N Smit, M A Christianson, M McGregor, BPS van Eck LAW@WORK 3rd Edition (2015).
  • Unemployment Insurance Act, 63 of 2001.
  • Compensation for Occupational Injuries and Diseases Act, 130 of 1993.

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)

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