In this article, we will examine whether it is permissible for employers to withhold statutory monies when employees resign without notice, specifically whether clauses in employment contracts allow employers to do so. Lastly, we will consider whether parties in an employment relationship, i.e., the employer and employee, may contract outside the Basic Conditions of Employment Act.

Whilst it is common practice to insert clauses in an employment contract that allow employers to withhold monies for employees who do not serve the requisite notice upon resignation, such clauses do not exonerate the employer from paying monies to the employees that are due and owing in terms of the Basic Conditions of Employment Act.

An example of such a clause would be: –

“Should the employee fail to give sufficient notice of termination of service in terms of this contract and/or as required by the Basic Conditions of Employment Act 75 of 1997, the employee specifically agrees and authorises the employer to withhold an amount of salary/wages/leave pay or any money that is due by the employer to the employee, equal to the period of notice he or she was supposed to have served.”

 The employer is only allowed to withhold notice pay since the employee would not have served the period as required, depending on the employee’s service. However, payments that employers are legally obligated to make as required by the law, the BCEA, cannot be avoided. The CCMA will generally hold an employer liable for payment of these monies in a section 73A dispute despite having such clauses in the contract of employment.

These payments include, inter alia,

  1. Salaries;
  2. Wages;
  3. Leave and Severance Pay, and, in certain cases,
  4. Bonuses.

However, this does not mean that an employer has no recourse. If the employee does not serve notice, they are in breach of contract, and the employer can enforce it in a competent jurisdiction, such as the courts, since the CCMA does not have jurisdiction for such disputes.

These clauses aim to deter employees from resigning without the requisite notice, thus giving an employer time to arrange a handover and get a suitable replacement in a timely manner.

Employers and employees may contract outside the Basic Conditions of Employment Act, provided that they meet the minimum requirements of the Act. What this means is that the bare minimum requirements of the Act must be met, and the conditions therein are not in any way less favourable than those stipulated by the Act.

For instance, an employer may offer more benefits to an employee beyond those mandated by the BCEA.

Therefore, employers should be cautious of such clauses and note that merely inserting the aforementioned clause does not automatically mean they can withhold monies; certain amounts are prescribed by law and cannot be withheld.

Furthermore, employers must be guided by the law, particularly the Basic Conditions of Employment Act, when contracting with employees, and be aware that they can contract outside the Act provided they meet the minimum requirements as prescribed by the Act.

 

Article By S’bonelo Mposula

Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)