Warnings and deductions

Labour legislation strictly regulates any deductions made from an employee’s remuneration, and employers must guard against deducting any money without following the correct procedure.  Various types of deductions can be made ranging from statutory deductions (unemployment insurance, income tax, a court or arbitration order), additional deductions specific to the business industry, and other general deductions (loss of or damage to property, loans, provident or pension fund, union fees and the like).

WARNINGS, DEDUCTIONS AND DOUBLE JEOPARDY

Can an employer recover damages from an employee due to negligence and issue the employee with a warning for the same misconduct, or will this constitute double jeopardy?  Yes, the employer may do so.

Where damages or losses are caused by an employee, the employer is entitled to recover damages based on a civil claim in terms of the common law and the misconduct can be dealt with by way of disciplinary actions as established by the business’ disciplinary code.  The employer must include the sanctions for misconduct in the disciplinary code, and if an offence does occur, the employer must act accordingly. The appropriate sanction for an offence is typically some sort of warning, or in very serious cases, dismissal (but only once a disciplinary hearing has been held).

The employer’s right to recover damages or losses from the employee, as well as issuing the appropriate warning to the employee for the same misconduct, was confirmed by the judgement of Solidarity obo Mohammed / Air Traffic and Navigation Services Ltd [2011] JOL 27921 (CCMA).

DEDUCTIONS FOR DAMAGE RECOVERY

Section 34 of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997), or the BCEA, states that deductions are only permitted if the employee has given his or her consent, or if the deduction is authorised through a collective agreement, statutory provision (legally prescribed deduction), court order or arbitration award.

Subject to due process being followed, the employer is authorised to deduct a certain amount from the employee’s remuneration to recover damage to the employer’s property. The BCEA stipulates the following requirements before the employer can make such a deduction:

• The employee must consent in writing to the deduction and the amount must be specified.
• The loss or damage must have occurred in the course of employment, and as a result of the employee’s intent or negligence.
• The procedure the employer follows must be fair and the employee must be given a reasonable opportunity to state his or her case, including why the deduction should not be made.
• The employer may only deduct a maximum of 25% of the employee’s remuneration at a time.
• The total amount the employer deducts may not exceed the amount of the actual loss or damage the employer suffered.

AVOID THIS MISTAKE

Employers often make the mistake of simply informing the employee of the damage to be recovered without first having followed the correct process. Another mistake is to deduct more than 25% of the employee’s remuneration in one go, with or without permission.

This can result in the employee approaching the Commission for Conciliation, Mediation and Arbitration (CCMA) by declaring an unfair labour practice dispute.