Subsequent to the judgement granted by the Constitutional Court on 13 September 2016, RMI4Law has been inundated with calls from employers with questions as to how to deal with the emoluments attachment orders (“garnishee orders”) applicable to their employees..
An Emoluments attachment order (“EAO”) (also known as a “garnishee order”) is an order whereby a debtor’s (the employee’s) salary is attached and the employer of the debtor is obliged to pay a certain portion (as specified in the EAO) of the debtor’s salary to the creditor.
In the case of the University of Stellenbosch Legal Aid Clinic and Others v Minister of Correctional Services and Others CCT 127/15 the Constitutional Court handed down a landmark judgment on 13 September 2016.
The Court ruled, amongst others, on the Constitutionality of Section 65J(2) of the Magistrate’s Court Act. This specific section deals with the issuing of EAO’s. Up until now the Clerk of the Court would usually issue the EAO by merely stamping the order. This could result in unfair and unreasonable EAO’s as there is no judicial oversight in the granting of the order. The Constitutional Court found that the legislation at the time of its judgment (“current form”) is unconstitutional since it does not make provision for proper judicial oversight.
To determine whether the legislation provided for judicial oversight, the Constitutional Court had to determine whether it is the Court or someone else that has the power to issue an EAO. In terms of current legislation an EAO could be granted in the following circumstances: Either the employee consents in writing to an EAO and the Clerk of the Court issues the EAO by merely stamping the order, or a Magistrate authorises the EAO on application by the Creditor. In the last instance the requirement of judicial oversight is met, but where the EAO is issued by the Clerk of the Court merely upon written consent by the employee there is no judicial oversight. In such instance employees can be subjected to the deduction of unaffordable portions of their salaries, often to the extent that they can barely survive. It was exactly this last consequence the Constitutional Court wanted to avoid.
The Constitutional Court added some procedural guards before an EAO can be issued. From now on only a Magistrate may issue an EAO. Before the Magistrate will grant the EAO it must satisfy itself that it is just and equitable that an EAO be issued and that the amount to be deducted from the employee’s salary is appropriate. Even where an employee consents to an EAO, the creditor still have to apply to Court for the authorisation of the EAO and it will only be issued after careful consideration by a Magistrate. The aforesaid amendments should ensure judicial oversight of all garnishee orders granted after 13 September 2016.
Unfortunately for employees who were subjected to garnishee orders pre 13 September 2016, nothing has changed. The ruling has no effect on existing orders. Employers are therefore still obliged to deduct the amounts as per the current EOA from the employee’s salary. The Constitutional Court specifically determined that, although certain parts of the relevant legislation (section 65J of the Magistrates’ Court Act 32 of 1944) is unconstitutional, the effect of its order of unconstitutionality will only apply prospectively i.e. to EAO’s to be granted after 13 September 2016. In this regard the Constitutional Court confirmed that the situation is too complex to apply its order retrospectively. However, an employee may still approach the Court for the review or setting aside of an EAO granted before the judgment if he/she is of the opinion that the amount deducted from his/her salary does not provide him/her with sufficient means to maintain himself/herself and his/her dependants.
Should employers or employees suspect that garnishee orders were obtained unlawfully, they are advised to immediately seek legal advice from a legal representative to ascertain whether there are sufficient grounds to dispute such orders. Employers and employees must also remain aware of their rights to apply for the rescission of garnishee orders where the amount deducted from their salaries are not just and equitable.
Andries Stander is a director at Barnard Incorporated Attorneys in Centurion.
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