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Garnishee order relief for W Cape workers

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Odette Geldenhuys of Webber Wentzel (Supplied)
Odette Geldenhuys of Webber Wentzel (Supplied)

Cape Town - All employers in the Western Cape are exempt from enforcing emoluments attachment orders (often referred to as garnishee orders) against their employees which were obtained outside the province, until a final decision by the Constitutional Court which is expected next year.

This is the crux of the outcome of a case brought in the Western Cape Division of the High Court of South Africa. The case was brought by Tuffy Manufacturing and four other companies against six different debt collectors.

It was a pro-active action by a concerned employer, Tinus Slabber, after he became aware of the outcome of a ground-breaking case in the same high court, which declared specific emoluments attachment orders (commonly known as EAOs) invalid.

The University of Stellenbosch Legal Aid Clinic and 15 individuals approached the Cape Town High Court in an application to determine whether it is constitutionally permissible for a person’s wage or salary to be attached - without any form of judicial oversight - in order to satisfy a judgment debt.

READ: Debtors to fight garnishee orders in court

The individuals who brought that application were impoverished and employed as farmworkers, cleaners and general workers at the university and in the greater Stellenbosch area. They have very basic or non-existent levels of financial literacy.

On July 8 this year the court found those specific EAOs to be invalid and certain legislation, which was deemed to create a lack of judicial oversight, was found to be unconstitutional. One of the grounds for the court finding the EAOs to be invalid was that they were obtained in the wrong jurisdiction - not in the court closest to where the debtor lived.

In addition, as the law stands now, if a debtor gives consent an EAO can be granted by a clerk of the court rather than a magistrate.

"The high court looked at that part of the law and said that must be unconstitutional as the granting of an EAO involves attaching assets which impact on the livelihood of the debtor and such a very important decision must be made by a magistrate with greater insight and experience than a clerk of the court," Odette Geldenhuys, a senior associate at Webber Wentzel, told Fin24. She was involved on behalf of the plaintiffs in both of these ground-breaking EAO cases.

"The Tuffy case is very important, not only because it applies the University of Stellenbosch Legal Aid Clinic case, but also because it is an example of a conscious and pro-active employer, who is concerned about the wellbeing of his employees and took the necessary steps to protect their constitutional rights."

READ: Victory for consumers as court rules against salary deductions

At the moment the status of the judgment in the University of Stellenbosch Legal Aid Clinic case is that on March 3 2016 the Constitutional Court is expected to make a final decision about whether the relevant garnishee legislation is unconstitutional or not.

On the same day the Constitutional Court will hear the appeals by the credit provider respondents and the Association of Debt Recovery Agents on whether the way creditors obtained these particular garnishee orders - for instance in Beaufort West when the debtor lives in Stellenbosch - was wrong.

"The judgment regarding judicial oversight is still waiting for confirmation by the Constitutional Court. It is, therefore, not yet unconstitutional," explained Geldenhuys.

"When it comes to the use of the 'wrong' courts, however, the judge was very emphatic. He said it must simply be wrong practice and a wrong interpretation of the law that credit providers can go to a court so far away from debtors, who can then not get to that court to go and explain themselves."

In the Tuffy case, Slabber applied for a wide order as he felt there could possibly be other concerned employers like him, who did not want to enforce such invalid EAOs anymore. He only asked for the order to be applied to the Western Cape as that is the jurisdiction of the high court where he applied and where the University of Stellenbosch Legal Aid Clinic case was heard as well.

The credit providers in the Tuffy case actually settled the case with Slabber. In the settlement they agreed that those garnishee orders obtained in the wrong jurisdiction would be declared invalid. They also agreed that all employers in the Western Cape would be exempt from servicing such EAOs in this way.

Geldenhuys pointed out that nothing stops concerned employers in other provinces from bringing similar applications to high courts there.

ALSO READ: Not all garnishee orders invalid - expert

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