It often happens that employees borrow and owe money to employers. While the recovery can often be done amicably there are occasions when it becomes more difficult.
Section 34(1) of the Basic Conditions of Employment Act allows an employer to deduct an amount from an employee’s remuneration only if the employee has consented thereto in writing or the deduction is permitted in terms of a law, collective agreement, court order or arbitration award.
Section 34(2) of the BCEA allows for deductions from remuneration where the employer has suffered losses or damage on account of the employee and a specific process is provided for prior to the deduction of monies:
- The loss/damage occurred due to the employee’s fault during the course of his/her employment;
- A fair procedure has been followed, including giving the employee an opportunity to give reasons why the loss/damage should not be deducted;
- The deduction does not exceed the cost of the loss/damage;
- The deductions do not exceed a quarter of an employee’s monthly salary.
As employees are required to consent in writing to the deduction of monies from their remuneration it is advisable to obtain such consent from all employees prior to any damages or losses being suffered. This may be done through the incorporation of a clause to such effect in their contracts of employment. Thereafter should the position arise where monies need to be recovered they should only be recovered after a fair process has been followed. Deductions must be made within the prescribed limit of a quarter of an employee’s monthly remuneration.