Sonja Vorster

A very important development took place in the Constitutional Court on September 13, 2016. It affects both employers and employees.
This follows the Constitutional Court decision of the University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice and Correctional Services and Others (case no. CCT127/15, 13 September 2016).

The changes were to the Magistrates Courts Act, 1944 section 65J. One of the aspects of Section 65 J of the Act is to obtain an emoluments attachment order on an employee’s salary. An emolument attachment order is used to recover the unpaid debt that was extended by a credit provided.

In terms of this type of order, the debtor pays off the debt in instalments that are deducted from the debtor’s salary by the employer and paid to the credit provider, until the debt is repaid. It is important to know that the judgment does not apply to already granted Emolument Attachment Orders. In the future, credit providers will not have easy access to employee’s salaries and it offers protection to the poor and their families.

South Africa’s total unsecured credit amounts to R165.16 billion for consumers for the quarter ending March 2016. The unsecured credit sector is where the poor, who historically have not had access to formal banking credit facilities, are exposed and often taken advantage of by unscrupulous credit providers.

Before this decision, a judgment creditor could approach the clerk of the magistrate’s court for an Emolument Attachment Order to be issued. As such, the exercise of judicial discretion (of a magistrate) was not required for the Emolument Attachment Order to be issued – all that was required was the written consent of the debtor or the authorisation of the clerk of the magistrate’s court.

This consent was normally pre-signed in the initial agreement between the parties when the loan or credit was granted. It follows that, as of September 13, 2016, an Emolument Attachment Order may only be issued by a magistrate, presiding in the magisterial district in which the employee lives or works or in which the “goods are kept”.

This magistrate must be satisfied that the requirements as set out in the section have been met, for example the affordability. Even after a magistrate has exercised discretion, the emolument order can be challenged on appeal. In relation to the second issue, the Constitutional Court upheld the High Court’s findings and added that a debtor cannot consent to the jurisdiction of a magistrate’s court other than the one where he or she lives or works or in which the “goods are kept”.