The Basic Conditions of Employment Act seeks to provide protection of an employment relationship and give effect and regulate labour practices for it to be fair.

Section 34 deals with deductions and other acts concerning remuneration. It states that an employer may not make any deduction from an employee’s remuneration unless: –
(a) the employee in writing agrees to the deduction in respect of a debt specified in the agreement; or
(b) the deduction is required or permitted in terms of law, a collective agreement, court order or arbitration award.

Subsection 2 further deals with deductions for loss or damage if the employee caused the loss or damage. The employer should give the employee a fair hearing to mitigate why deductions should not be made.

If the employee feels aggrieved by these deductions, they can refer a dispute. However, the question arises as to which forum has jurisdiction to adjudicate the matter.

In the recent Labour Court judgement of O’Reilly v CCMA and Others JR2395/19 (LC), the Court had to determine whether the CCMA had jurisdiction to deal with disputes relating to section 34 deductions. The Applicant, in this matter, referred a constructive dismissal dispute and further claimed that the employer made unlawful deductions from her remuneration. She sought to be reimbursed for those deductions. The Applicant, in this matter, approved legal fees that were used in an application whereby the employer was cited as the Respondent. The employer held the view that their own monies were used to fund the legal fees. Due to these actions by the Applicant, the employer served a notice of disciplinary hearing but further began to, without agreement between parties, deduct monies from the employee to recover the legal fees. Initially, the Applicant raised no grievance regarding these deductions but eventually resigned, claiming that she was constructively dismissed and that the deductions were unlawful, citing a breach in terms of section 34(1).

In determining whether the CCMA had jurisdiction to deal with deductions in terms of section 34, the CCMA initially dismissed the breach of section 34(1) at the arbitration proceedings. The Court held that the claims in terms of the BCEA are regulated by section 77. Section 77 simply confers exclusive jurisdiction on the Labour Court to determine all disputes that fall under the Act, except where the Act provides otherwise.

The Court held that there is no provision in the Basic Conditions of Employment Act that indicates that the CCMA has jurisdiction to determine a dispute in relation to section 34(1), thus stating that the CCMA does not have jurisdiction in these matters.

Therefore, if there is a dispute for an alleged breach of section 34 of the BCEA, a representative can raise the issue of jurisdiction, as the CCMA has no right to adjudicate the matter.

Article By: Lauren Moodaley
Dispute Resolution Official – CEO Cape Town