How should businesses respond to the recent Court Order regarding Aarto?

In January 2022, the controversial Administrative Adjudication of Road Traffic Offences (Aarto) Act and Aarto Amendment Act, which provide for, inter alia the introduction of a driver license points demerit system, were declared unconstitutional and invalid by Judge Annali Basson of the North Gauteng High Court.

At the outset, Judge Basson was at pains to specify that the dispute, which the Organisation Undoing Tax Abuse (Outa) had raised regarding Aarto was not about the desirability of this legislation, but rather “the narrow issue of the legislative competence of national government to enact these two Acts.” Essentially, the Acts are unconstitutional because they would displace the executive legislative authority of the provincial legislatures, by regulating road traffic and creating a single, national system to do so. 

Outa had argued that the provincial and municipal road and traffic regulations fall within the exclusive legislative competence of the provinces under Schedule 5, Parts A and B of the Constitution. And by extension, the Acts would displace the executive competence of local government under Part B of Schedule 5 of the Constitution to enforce traffic and parking laws at a local government level. Apart from a single exception, Section 41(1)(g) of the Constitution stipulates that each sphere of government must exercise its powers in a manner that does not encroach on the geographical, functional, or institutional integrity of government in another sphere. The enactment of Aarto would break this bond.

How should businesses respond to the Court Order?

In the same way that enterprises made ready for the application of the Protection of Personal Information (POPI) Act and Promotion of Access to Information Act (PAIA), compliance and human resource officials would have had to ensure that their systems and procedures minimised the risks for the business under Aarto. But if Aarto is unconstitutional, does this negate the preparations previously made? By no means; because as Judge Basson pointed out, the door is not permanently closed for a system alike to Aarto, but that must be done at various levels of government. This is still very likely to happen in future. 

Additionally, it can be argued that any compliance measures and adjustments to policies that employers make in anticipation of an Aarto-like system, are worthwhile investments in the long-term. 

The demerit system as envisaged under Aarto would apply to driver licences and license disks. This would have an impact on employers whose employees drive company vehicles. The employer would be held liable for any infringement fine and would incur the relevant demerit points against the vehicle’s license disk. This could thus result in the vehicle disk of the employer being suspended because of driving infringements incurred by the employee.

Luckily, Aarto would have made provision for the alleged infringer – in this case the employer – to timeously nominate the person who drove the vehicle at the time of the alleged infringement. This means that the nominated employee would incur the relevant points and penalty. The employer would therefore need to stay updated as to the status of the demerit points against a relevant employee’s license, or risk facing massive penalties.

In this regard,  the employer would have had to have necessary processes in place to deal with employees whose licenses have been suspended or cancelled, and adjust policies, employment contracts and terms and conditions of employment to ensure that operations are minimally impacted by Aarto.

These measures are encouraged, not only in preparation of “Aarto II”, but  to reduce risk, costs and to foster better driving habits by employees. It is advisable to consult a legal professional who would be able to assess current policies and procedures for drivers and provide advice on changes that can be implemented to your advantage.

By George Herbst

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