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W Cape Employers do not have to make Salary Deductions

A recent ruling in the Western Cape High Court in regard to Garnishee Orders has once again changed the garnishee order (EAO) collections landscape.

When Mr. Tinus Slubbert heard that a landmark ruling in the Western Cape High Court had ruled that several Garnishee Orders (EAOs) against local farm workers, which had been obtained in a far away province, were ruled as illegal he decided to piggyback off that case and ask the court if employers in the Western Cape had to apply salary deductions (from Garnishee Orders they received) to their employees wages.

Tuffy Manufacturing and 4 other firms brought a case, in the Western Cape, against 6 different debt collecting firms in regard to their employees and EAOs which had been granted outside the province. The case was based strongly around the ruling of the matter between the Stellenbosch Legal clinic and 15 Western Cape Farm Workers from earlier this year. In that case all 15 garnishee orders (some of which left impoverished workers with nothing to live on) were thrown out. The ruling has since been appealed. The case was seen as a nail in the coffin of the very commonly issued salary garnishee practice and gained a huge amount of press coverage. At present, there is hardly a firm in SA who has not received such a demand for a portion of their employees salary due to a granted EAO. The outcome of the Tuffy Case is very interesting to any employer in the Western Cape. The Western Cape High Court ruled that employers do not have to institute any new EAOs they receive from another area, (jurisdiction) until the matter is resolved by the Constitutional Court – which will hear the matter in March next year.

The two main issues involved in the matter are:

1) Where was the EAO obtained?

Most garnishee orders (EAOs) are obtained far from where a consumer can possibly go and defend against the matter or even appear in the court to hear the case and speak to the Magistrate. This seems to be done on purpose to stop consumers defending the matters. It also means that if later the consumer wants to change the amount paid this has to be done in a court across the country far from where they live which makes it virtually impossible to ever do so.

2) Was it done by a Magistrate or just a Clerk of the Court?

Some courts have gained a reputation for just rubber stamping these matters and issuing garnishee orders against consumers by the thousand. In some cases it is felt that the orders might be fraudulent but they are not checked by a Magistrate so no one knows for sure if they are legitimate or not.

Employers Can Wait

Keep calm and wait and seeIt is expected that in the looming face of an end to easy garnishee orders there will be a huge rush by collections attorneys to try get garnishee orders through their favourite courts in advance of the March Constitutional case just in case the ruling goes against there favourite collections process. Thus companies may soon be flooded with garnishee requests. The bottom line is that if you, as an employer in the Western Cape, receive an EAO (Garnishee order) against the salary of a member of staff from some distant area before the constitutional ruling you do not have to do anything about it as they may be illegal. Employers in other areas may decide to follow suit and wait and see.