Month: June 2017

CREDIT BUREAUS: CAN I BE BLACKLISTED?

There is no such thing as a black list. It simply means that there are negative data on your credit report that is hosted at a Credit Bureau. This negative data can be anything, from a plain collection on one of your loans right through Judgment data or even Debt review.

This negative data will have an impact on your ability to get loans or open retail accounts as the credit provider will see this negative behaviour towards your current credit as a potential way that you will handle their loan; if granted.

A Credit bureau is an organisation that keeps a record of your credit information. Your credit record shows how you manage your debts and is used by credit providers and moneylenders to decide if you can afford to borrow money or pay back a new loan.

The National Credit Act says each credit bureau must be registered with the National Credit Regulator – who decides how your credit information can be used and who can see your credit record.

What is the role of a Credit Bureau?

When you take out your first loan with a credit provider, you have to fill in a form that asks for consumer credit information – including your credit history, financial history, education, employment and identity details. This information, and the details of the loan, is given to a credit bureau that then puts together credit report.

What are your rights regarding a Credit Bureau?

  • To be told that a credit provider intends to report negative information on you to a credit bureau 20 working days before they do so
  • To get a copy of your credit record from a credit bureau when you ask for it – you can get one free record each year but may be charged a small fee for further records
  • To challenge information kept by a credit bureau if you are unhappy with it
  • For your information to be kept confidential, and for it to be used only for the purposes that are allowed

How can your credit information be used?

  • To decide whether or not you can afford credit
  • To investigate fraud, corruption or theft
  • To consider you for employment in a position that requires trust, honesty and the handling of cash or finances

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)

References:

http://www.legal-aid.co.za/selfhelp/?p=750

http://www.maxlaw.co.za/faqs/#toggle-id-4

IS YOUR BUSINESS LEGALLY COMPLIANT?

Compliance refers to a company obeying all of the legal laws and regulations regarding how they manage the business, their staff, and their treatment towards their consumers. The point of compliance is to make sure that corporations act responsibly.

Is compliance for every business the same?

Certain businesses may be required by law to register with an industry association. For instance, if you want to practice as a public auditor and issue an opinion on assurance engagements, you must be registered with the South African Institute of Chartered Accountants (SAICA) and the Independent Regulatory Board of Auditors (IRBA). Compliance in this regard would depend on the type of business involved.

What are general requirements for all businesses:

Tax compliance (SARS, VAT Act) – First and foremost, the business enterprise must be registered with SARS for tax purposes (to be taxed on the income that it makes), secondly, if the business is an employer it must register itself as such and as an agent of government required to deduct employees’ tax from the earnings of employees and pay the amounts deducted over to SARS on a monthly basis. Thirdly, if applicable, a business may register for VAT in terms of the VAT Act.

The Occupational Health and Safety Act – The government requires businesses that employ people to provide a work environment that is safe and without risk to the health of employees.

Skills Development Levy (SDL) – Employers must pay 1 percent of their workers’ pay to the skills development levy every month. The money goes to Sector Education and Training Authorities (SETAs) and the Skills Development Fund to pay for training.

The Compensation for Occupational Injuries and Diseases Act (COIDA) – This Act seeks to ensure that employers are duly covered to provide compensation for disablement caused by occupational injuries or diseases sustained by employees in the course of their employment, or for death resulting from such injuries or diseases.

Unemployment Insurance Fund (UIF) – Employers must register with the Department of Labour to ensure that their employees are appropriately covered when out of employment.

Auditing requirements – Depending on the type of company you register, it may be required to be audited on an annual basis.

Financial Intelligence Centre Act (FICA) – If your company will be engaged with financial services, estate agencies, insurance, etc. you are required to comply with this Act in order to combat money laundering.

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)

References:

http://www.bonaman.co.za/business-compliance-101-for-entrepreneurs/

https://bizconnect.standardbank.co.za/manage/operations-compliance/reference-documents/legislation-business-compliance.aspx

CANCELLING A LEASE AGREEMENT EARLY

If you want to end your contract early, this can only be done “in situations where the Consumer Protection Act or Rental Housing Act apply” – or if there’s a clause in the contract that allows for early cancellation, or if both parties agree to it.

If, on the other hand, one of the parties wants to cancel because the other is in breach of the contract, then certain notice periods come into effect – the first of which being, of course, that the aggrieved party is required to “give written notice for the breach to be remedied. Failure to remedy the breach in the stipulated time period, will entitle the innocent party to cancel the lease and (where relevant) claim damages suffered from the offending party.”

A tenant has the RIGHT to cancel a lease agreement, be it in the 1st month, 4th month or second-to-last month of the lease agreement. He cannot be ‘punished’ for doing this and the cancellation does not constitute a breach of the lease agreement.

What must an agent do if a tenant decides to cancel?

1. Obtain the cancellation in writing from the tenant.
2. Ensure the cancellation gives the requisite 20 business days’ notice.
3. Charge rental until the end of the 20 business days (even if this is not a full month’s rental).
4. Log on to TPN and end the lease as at the end of the 20 business days.
5. Keep in mind the lease now ends as at the end of that 20 business days.
6. Should the tenant remains in the premises a new lease MUST be signed as once cancelled, a lease cannot be revived at law. If you fail to do this, you essentially have no long-term lease in place.
7. Begin advertising the property immediately- the onus is on the agent/landlord to find a replacement.
8. Keep all invoices from the advertising as this is one of the costs you may pass along to the tenant in terms of a ‘reasonable cancellation penalty’.

What can an agent charge the tenant that cancels early?

The idea behind this reasonable cancellation penalty is not to penalise the tenant, but to recover any actual loss suffered by the landlord as a result of the cancellation. The following cost could be applicable:

  • Credit check costs for any prospective replacement tenants (even those who are not accepted);
  • Advertising costs (only the actual amounts on the invoices);
  • Rental – the exact number of days that the unit remains vacant after the tenant vacates.

It is important to keep in mind that all calculations of the penalty can only be made once a replacement tenant has been found. It must also be kept in mind that where a tenant cancels, for example, in month 10 or 11 of a 12-month lease, you cannot charge the tenant the full remainder of the lease as this would negate the cancellation. The principles behind cancellation penalties lie in our law of undue enrichment. A landlord/agent cannot make a financial gain or benefit off of a tenant’s cancellation.

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)

References:

http://www.privateproperty.co.za/advice/property/articles/how-to-cancel-a-residential-lease/3315

http://www.melcoproperties.co.za/template/ArticleDisplay.vm/articleid/2243

CAN I STILL GO TO THE CCMA AFTER I SETTLED?

If an employee has been demoted after a fair process and has accepted the demotion, could they still go to the CCMA for unfair labour practice. It’s important to first take into account the circumstances.

A case involving Builders Warehouse

The facts in Builders Warehouse (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others[1] can be summarised as follows: The employee worked as an Administrative Manager at Builders Warehouse (Pty) Ltd. She was informed by doctors that she was very ill and would most likely have to go to hospital frequently and take various types of medication. Over the next three years her absenteeism increased significantly and her employers became concerned as she was no longer able to do her job effectively, even when she was not absent, due to the side effects of her medication.

Builders Warehouse, after having discussions with the employee, suspended her pending an investigation into her capacity to undertake the functions of an administrative manager, taking into account her health and performance. Builders Warehouse held an incapacity hearing and the external chairperson ruled that, due to the employee’s excessive and increasing absenteeism, dismissal was the appropriate sanction. The chairperson, however, offered her a demotion instead of a dismissal. The employee accepted this demotion in writing.

After this agreement between Builders Warehouse and the employee was concluded, she obtained legal assistance and subsequently complained to the CCMA that Builders Warehouse had committed an unfair labour practice by demoting her.

The question here is whether the employee was entitled to refer an unfair labour practice dispute concerning the demotion to the CCMA.[2]

The arbitrator in the CCMA decided that because there was consent to the demotion, the CCMA did not have jurisdiction to hear the dispute. The employee then appealed to the Labour Court and once again to the Labour Appeal Court, of which the outcomes are set out below.

Outcomes of the case

The Labour Court and the Labour Appeal Court looked at Section 186(2)(a) of the Labour Relations Act[3] in this regard, which states:

“Unfair labour practice means any unfair act or omission that arises between an employer and an employee involving unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits.”

The Labour Appeal Court upheld the judgement in the Labour Court and found that although a binding contract comes into existence when employers and employees settle their differences by agreement, such an agreement does not mean that the CCMA does not have jurisdiction to hear the dispute. The fact that the parties have agreed that the employee accepted demotion is not a complete defence for the employer because the ambit of this unfair labour practice is wide enough to include the implementation of an agreement to accept demotion.[4] The Labour Appeal Court confirmed that the determination of whether a demotion took place, unlike the determination of dismissal, does not require an arbitrator to determine if there was consent or not.[5]

Conclusion

Although consent is a relevant issue in regard to the merits of a dispute regarding an unfair labour practice, it is not a jurisdictional prerequisite. This means that the CCMA does have the power to hear a matter relating to a demotion even though there was consent thereto.

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)

References:

Builders Warehouse (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (PA 1/14) [2015] ZALAC

Labour Relations Act 66 of 1995

[1] (PA 1/14) [2015] ZALAC.

[2] (PA 1/14) [2015] ZALAC Par 12.

[3] Act 66 of 1995.

[4] Builders Warehouse (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (PA 1/14) [2015] ZALAC Par 14.

[5] Builders Warehouse (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (PA 1/14) [2015] ZALAC Par 13.

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