“No alienation of land … shall … be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.” (Alienation of Land Act)

Ensure that all the important terms of your sale agreement are recorded in writing and signed.

Leave out anything “material” and, as we shall see from the Supreme Court of Appeal case discussed below, your entire sale could well collapse. At the very least, you face significant legal consequences, delay and cost.

The omitted term that sank a R4.5m sale (after 7 years’ delay)

• In 2016, liquidators of a property-owning company sold several pieces of land (including a “private ring road” erf) to a buyer for R4.5m plus vat.
• A saga of delay and confusion followed, including changes to the original sale agreement such as an addendum changing the date of transfer, and another correcting a mistake in the ring road’s erf number.
• Eventually it became clear that a subdivision of the ring road erf would be necessary to save the sale, and the parties started negotiating in an attempt to do so.
• Whilst it was not clear to the Court whether or not the buyer and seller did actually reach any agreement on the matter, the critical issue was that at best there was only an informal arrangement or an oral agreement – “no formal written agreement or addendum was ever concluded and signed by or on behalf of the parties”. Nor was it clear that they were agreed on what exactly was being sold, the buyer claiming to have had no intention of buying the whole ring road erf as set out in the original agreement.
• That rendered the whole sale agreement null and void.

The formalities required for validity

• Property sale agreements must be in writing and signed. Whilst generally our laws hold us to even our verbal agreements, there are exceptions where only written agreements are binding. A vitally important one is the sale of land. The Alienation of Land Act requires that the whole contract of sale be reduced to writing and signed by or on behalf of both buyer and seller.
• That written sale agreement must include all “material terms”, incorporating both –
  • “Essential” terms, which must set out the identity of the parties to the contract, the identity of the land sold, and the amount of the sale price; and
  • Any other term that is “material … determined with reference to its effect on the rights and obligations of the parties.” That’s an imprecise and wide definition so each case will be decided on its own facts, but for example a subdivision would clearly fall into that net.

    In this case, the omission of a subdivision term had created uncertainty about the parties’ rights and obligations concerning the subdivision process, including responsibility for costs and potential consequences if approval was not granted. Their failure to record in writing their agreement on these issues (if indeed they ever reached one) rendered the whole sale invalid.

Note that your written agreement must be clear in itself, sufficiently accurate and comprehensive to avoid any need for oral evidence on any of those critical issues.

Takeaways

1. Even when our law doesn’t require your agreement to be written and signed to be valid, put it in writing! Always insist on a written agreement that covers all the material terms of your sale. That’s make or break with property sales, but in all cases verbal agreements are a recipe for uncertainty and dispute.
2. Seek legal advice before you sign anything: Engaging an experienced property lawyer upfront will ensure that your interests are protected throughout the process.
3. Clarify anything important like subdivision: If your transaction involves subdivision (or indeed any other important aspects), make sure that all obligations, cost liabilities, and potential outcomes are clearly stipulated in the written agreement. It’s the only way to ensure the validity of your sale, avoid ambiguity, and reduce the risks of any unforeseen circumstances and dispute.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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“The requirement that credit providers must be registered allows for their control and regulation, especially in relation to their financial probity and integrity, thereby avoiding the unscrupulous exploitation of credit consumers by so-called fly-by-night operators and loan sharks.” (Extract from judgment below)

A recent High Court case highlights once again the dangers of lending money, or granting credit, in contravention of our credit laws. By understanding the pitfalls associated with being an unregistered credit provider and of not complying with the National Credit Act (NCA), you can protect yourself from the potential legal and financial risks.

Close friends fall out, and the lender loses R1.5m

• The parties involved in this unhappy saga were previously close friends. An admitted but non-practicing advocate, who acted as a trustee of his friend’s personal trust, asked the friend (who had just sold his house) for a loan. The friend obliged with loans totalling R2.5m.
• To simplify a long and complicated factual history, disputes arose and a series of acknowledgments of debt (AODs) were signed to document the loan, the last AOD recording a settlement agreement/compromise.
• Over time, the borrower had made payments totaling just over R3m to the lender, the dispute went to arbitration, an arbitration award was made, and ultimately the lender sued his ex-friend in the High Court for a balance of R1,535,000.
• The Court, holding that the loan agreement and AODs were unlawful and invalid, dismissed the lender’s claim – which leaves him R1.5m out of pocket, plus costs and lost interest. That’s a very hard lesson that all would-be lenders should take careful note of.

How do you lose everything by not complying with the NCA?

In protecting consumers from incurring debt beyond their means, our National Credit Act (NCA) requires that, with only a few exceptions, “credit providers” (which would include anyone lending money or giving credit to a friend) must –

1. Register in terms of the NCA; and
2. Conduct a “credit assessment” to confirm that the borrower is in a financial position to enter into the loan and repay it.

Registration is unnecessary in some circumstances – for example loans between family members who are dependent on each other, whilst only “arm’s length” transactions will as a general rule fall under the NCA. There are other cases in which the NCA won’t apply or will only partially apply, but with all the grey areas involved, get specific legal advice before lending to anyone – friend or not.

Your risk is that any loan made by an unregistered credit provider becomes uncollectable. That means you could lose everything. If you find yourself in that position, there is still a ray of hope for you in that a court normally still has a discretion to help you on the basis of fairness, by making a “just and equitable” order of any sort. But don’t rely on that happening – you will have to justify making the non-compliant loan and hope for the best when it comes to the court weighing up the balance of fairness between the two of you. Rather be safe and check whether you need to comply with the NCA or not before you make the loan.

Besides, sometimes the court has no discretion at all to come to your rescue, which is exactly what happened in this case because the claim here was based not on the original credit agreement but on a settlement agreement. So the Court couldn’t have helped the lender even if it had wanted to.

There are no longer any thresholds – all loans are at risk

Finally, note that no matter what you may read in the media to the contrary, there is no longer any R500,000 debt threshold – any loan of any amount falls into the net since 2016. And since 2014 even one-off loans are at risk (before that, the NCA applied only to providers with one hundred or more credit agreements).

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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“…in general, ownership of an animal should carry with it strict liability for any harm done by the animal.” (Extract from judgment below)

Owning a pet comes with both joys and responsibilities, and a recent High Court award of almost R100,000 in damages to the victim of a dog attack is yet another reminder of the potential dangers of animal ownership and the legal responsibilities that come with it.

A social invite goes horribly wrong

• 17 years old at the time, a young woman was invited to a social gathering at a private house. As the gate was opened to let her in, two dogs came running out and the one (a large Siberian Husky) ran towards her and without warning launched itself towards her throat. She raised her arms to ward off the attack which resulted in both her forearms being bitten.
• Rushed to hospital, she was operated on by a plastic surgeon and has been left (nine years on) with scarring, physical disability and pain requiring physiotherapy, as well as counselling for psychological trauma in the form of PTSD (post-traumatic stress disorder).
• The dog’s owner suggested in court papers that when the dog jumped up to greet the victim, she had provoked it and acted negligently by retaliating, hitting it and pulling its hair. She was, he said, injured when the dog fended off her “unwarranted attack”. However, as the owner led no evidence to support this (the onus being on him to do so) the Court accepted that there was no provocation or negligence from the victim’s side.
• On the basis of our law’s general legal principle that “…in general, ownership of an animal should carry with it strict liability for any harm done by the animal”, the Court ordered the dog’s owner to pay the victim a total of just under R100,000 in damages.

The danger for pet owners – liability without fault

To understand that outcome, we need to go back to an old Roman law remedy, the pauperian action (“actio de pauperie”).

Under that action, which is still very much part of our modern law, the victim does not need to prove that the animal’s owner was negligent in any way. If your dog (or any other domesticated animal) causes someone else harm you are held liable on a “no fault” or “strict liability” basis.

There are a few limited exceptions to this rule, so if for example the dog’s owner in this case had been able to show that the victim had provoked the attack, she would no longer have been able to rely on the “no fault” concept. She would then have had to prove negligence and fault on the dog owner’s part – a much harder task.

But the general risk for animal owners remains this – you can be held liable for damage caused by your animals without the slightest fault on your part.

Dog Owners – how to manage the risks

So let’s end off with a few practical tips on how to protect your pet, ensure the safety of others, and reduce your risk of legal liability –

1. Understand the risk: You could be held legally responsible for any harm caused by your pet, including injuries to people and other animals, property damage, and emotional distress suffered by the victims.
2. Check your insurance cover: Make sure you have in place Public Liability insurance that will cover you for any claim of this nature.
3. Socialise and train your dog: Proper socialisation and training are vital to prevent aggressive behavior in dogs. Ensure that your dog interacts well with people and other animals.
4. Supervision and restraint: Keep your dogs supervised and under control at all times. Follow leash laws in public spaces or whenever there is any risk of harm.
5. Watch for the warning signs: Be aware of any signs or history of aggression or fear in your dog, and if necessary, seek professional help from a qualified animal behaviorist or trainer.
6. Take legal advice: If you are ever involved in a dog-related incident, consult immediately with your lawyer to assess your case, explain your legal rights, and guide you through the necessary legal processes.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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“Citizenship is the gateway through which a number of rights in the Constitution can be accessed.  It enables a person to enjoy freedom of movement, freedom of trade, and political representation” (Constitutional Court, quoted in judgment below)

Note: Many South Africans who should be aware of this new development will be overseas and/or may not have heard of the Supreme Court of Appeal decision we discuss below. If you know of any such person, please consider forwarding this to them as soon as possible.

Reportedly, thousands of South Africans have lost their citizenship through applying for citizenship or nationality of another country without first obtaining Ministerial permission to do so.

Most will have done so unknowingly, ignorant of the fact that whilst dual citizenship itself is allowed, our Citizenship Act requires you to get permission beforehand. Only minors (under 18s) and persons acquiring foreign citizenship by marriage were exempt.

The good news is that the SCA (Supreme Court of Appeal) has now ordered that –

1. That provision is inconsistent with the Constitution and is invalid retrospectively; and
2. Citizens who lost their citizenship by operation of that provision “are deemed not to have lost their citizenship.”

But – the Constitutional Court still has to confirm the invalidity order

The SCA’s order of invalidity has no legal force unless and until confirmed by the Constitutional Court (CC), and there is (at date of writing) no indication of when this will go to the CC for confirmation, whether or not Home Affairs will oppose its confirmation in the CC, and whether or not they will continue to enforce the section in the interim. In the interim, tread very carefully if you are either planning to apply for foreign citizenship/nationality, or if you were deprived of SA citizenship and plan to return to the country in the near future.

Another “but” – never let your SA passport lapse!

That new judgment does not affect in any way the fact that, although you can travel freely around the world on your second passport, you must always enter and depart from South Africa on your valid SA passport.  Keep renewing it!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

“Look before you leap” (wise old proverb)

Don’t let the excitement of buying a property blind you to the necessity of doing your homework before you agree to anything. Look before you leap!

It’s not just a matter of buying the right property at the right price – make sure that your finances (and particularly your cash flow situation) won’t stop you from fulfilling the financial obligations your signature on the sale agreement binds you to.

Otherwise, you could find yourself in the same unenviable position as the property buyer recently ordered by the High Court to pay substantial damages after she couldn’t pay the required deposits.

Three sales, and the seller claims damages

• A trust sold a property to a buyer for R750,000.
• The buyer failed to pay the two required deposits totalling R280,000, the trust cancelled the sale and put the property up for resale.
• It resold the property for R500,000 and sued the buyer for its R250,000 loss on the sale, plus the estate agent’s commission of R22,500 it paid for the new sale.
• The buyer fought the claim on a variety of grounds, none of which found favour with the Court. It ordered the buyer to pay, in addition to legal costs on an attorney and client scale, a total in damages of R235,875. That’s a figure seemingly arrived at by the Court by taking into account an amount of R40,000 already paid in by the buyer, which presumably leaves the buyer down a total of just under R280k plus two sets of legal costs.

Important lessons for buyers and sellers 

1. Buyers: Before you sign…

   Of course, the big lesson here for buyers is to make sure they can comply with the terms of the sale agreement they sign, with particular emphasis on their ability to make payments as and when due.

2. And sellers: Before you sign…

   Sellers on the other hand will want to avoid all the risk, delay and cost that the trust in this case was put to by investigating upfront the financial position of all potential buyers before accepting any offer. Make sure also that the terms of your sale agreement protect you adequately in the event of any default by the buyer.

3. Seller: Mitigate your damages

   Our law requires that if you want to sue for losses you incur as a result of someone else’s breach of contract (or wrongdoing), you must first take reasonable steps to minimise your losses.

   As the Court put it: “… the mitigating rule is a rule where a breach of contract has occurred. The innocent party cannot merely sit back and allow their losses to accumulate; the party must take reasonable positive steps to prevent the occurrence or accumulation of losses. The rule does not require the innocent party to do anything more than a reasonable person could do under the same circumstances. Reasonable expenses incurred in carrying out the mitigation steps may be claimed as additional damage suffered. The onus of proving what steps could reasonably have been taken, or that the expenses incurred were unreasonable, rests on the party in breach.” (Emphasis added) 

   As the seller, therefore, be sure to actively seek alternative buyers, use professionals to assist only as reasonably necessary, and accept only a reasonable resale price. In this case the evidence had established that the trust had acted reasonably both in reselling the property at the price it did, and in using the services of an estate agent to do so.

As always, agree to nothing without professional advice!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

South Africans employ an estimated 900,000 domestic workers. They assist us with a range of tasks that keep our homes running smoothly – from cleaning and gardening to cooking and childcare, their contributions are invaluable. However, as an employer, it is vital that you recognise and fulfill your legal obligations in order to establish a fair and lawful working relationship.

Compliance with these legal requirements has become increasingly important as law enforcement authorities become more and more vigilant in ensuring adherence, so without further ado let’s delve into the details of what the law expects from you.

Firstly, what do we mean by “domestic worker”?

In the context of this article, domestic workers refer to individuals who work in your home, including gardeners, cleaners, cooks, nannies, caregivers (to children, the aged, the sick, the frail or the disabled), au pairs, chauffeurs and the like. Excluded are farm workers and those working less than 24 hours a month for you.

5 key requirements

1. Employment Contract: It is essential to sign a written employment contract with your domestic worker. This contract should specify important details, including full name and ID number, remuneration, working hours, overtime, leave (annual, sick, maternity, compassionate, family responsibility), and job description (list roles and responsibilities). Having a clearly defined contract protects both of you and ensures a fair working relationship to your mutual benefit.
2. Minimum Wage: The current National Minimum Wage (NMW) for each “ordinary hour worked” is R25-42. Assuming a work month of 21 days x 8 hours per day, R25-42 per hour equates to R4,270-56 per month. The Living Wage calculator will help you check whether or not you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up to date).
3. Pay Slips: Every month, you must provide your domestic worker with a written pay slip. The pay slip should include your and your employee’s details, the ordinary and overtime hours worked during the payment period, the applicable rate of remuneration, and any deductions made by you. This document ensures transparency and accountability in the payment process.
4. UIF Registration: You must register your domestic worker for UIF (Unemployment Insurance Fund) and make monthly contributions. This will provide short-term relief to your employee during periods of unemployment, maternity leave, or illness. Both of you must contribute 1% of wages each month (i.e., 2% in total). Failure to comply is not only unfair to your employee, but it also exposes you to penalties and other legal consequences.
5. COIDA Registration: Under COIDA (the Compensation for Occupational Injuries and Diseases Act), you must register your domestic worker with the Compensation Commissioner to ensure that your worker (or dependants) is eligible for compensation in case of injuries, disabilities, or illnesses sustained while on duty.

It is crucial to understand that non-compliance with these obligations can lead to severe consequences for you, with the risk of legal disputes, referrals to the CCMA (Commission for Conciliation, Mediation and Arbitration), Labour Court fights, and so on.

Familiarise yourself with your obligations, seek professional guidance if needed (dismissals and retrenchments are particular minefields here!) and prioritise the well-being of your domestic workers to maintain a positive and lawful working relationship.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

More and more couples are opting to live together as permanent life partners rather than enter into a formal marriage. The risk for such couples is that whilst our law is steadily (if slowly and cautiously) extending many of the protections of formal marriage to unmarried life partners, that process is not by any means complete yet.

A recent High Court decision, refusing a life partner’s claim for interim maintenance after her relationship broke down, illustrates.

A “permanent romantic relationship” and a failed maintenance claim

• An opposite-sex couple had lived together in a “romantic” relationship for 8 or 9 years, having three young children and splitting when one partner left the common home.
• That partner then sued her ex-partner for (amongst other things) personal maintenance for herself for ten years or until her “death or remarriage”. She based that claim on her request for a declaration that she and her partner had lived as “partners in a permanent opposite-sex life-partnership in which the partners had undertaken reciprocal duties of support”. That main action is being defended by the ex-partner and is yet to come to trial.
• In the meantime, having successfully obtained interim maintenance orders for her children, she then asked the High Court to likewise order interim maintenance for herself as well. She asked for R56,000 per month plus payment of medical, motor and other expenses, together with a R1m initial contribution to costs.
• The Court dismissed this interim application, and whilst its analysis of our current law on the subject, with all the constitutional law ramifications, will be of great use and interest to lawyers, the practical result is what life partners should take note of.

What you must prove to get a maintenance order

Holding that “a ‘permanent romantic relationship’ is not synonymous with a permanent life partnership wherein the parties undertook reciprocal duties of support to one another within the context of a familial setting”, the Court found that the applicant “must first prove facts establishing that the duty of support existed, and that it existed in a familial setting.” (Emphasis added)

She could prove all that, said the Court, in the pending court case. For the moment she must live on her own means, without interim maintenance, until her main action comes to trial.

Practically, if you find yourself in a similar situation you have four choices if you want to claim personal maintenance for yourself (note that maintenance for children is an entirely separate issue, not subject to these limitations) –

1. As regards interim maintenance, you can hope that a court will assist you despite the outcome in this case, the Court here stating that “In reaching these conclusions we make it clear that they pertain only to the particular case presented to us by the applicant. Our conclusions are most certainly not intended to be of some broader implication or consequence. It thus of course remains open to anyone to approach court for declaratory relief of the nature which the applicant has sought in this matter and it is hoped that, should that occur, this judgment may provide assistance as to the manner in which such an approach should be made.”; or
2. You can try to prove at the full trial that your relationship was more than a “permanent romantic relationship” and was in fact a permanent life partnership with an undertaking of mutual support; or
3. You can hope for a change in the law creating an automatic duty of support between you. New legislation on the matter has been pending for many years but appears to be currently stalled. In addition, if this particular case proceeds to trial it may be that something further will emerge from that; or
4. Clearly the safest solution – you can put the matter beyond all doubt by signing a full “cohabitation agreement” as soon as your relationship becomes a permanent one.

What should be in your cohabitation agreement?

Although everyone’s own situation and needs will be unique, make sure that your cohabitation agreement (also sometimes called a “domestic partnership agreement”) sets out clearly your respective legal rights and financial arrangements both during your relationship and in the event of separation.

Cover questions such as –

• How will your various assets be divided?
• Do you undertake a reciprocal duty of support and on separation will each or both of you be entitled to personal maintenance and other financial support?
• What provisions are made for your children’s support and maintenance?
• Will there be any financial adjustment between you? What happens for example if only one of you works? Or if you paid for an extension to your life partner’s house or have been paying the bond? Or if one of you brought more into the relationship than the other?
• Who will take over ongoing liabilities and contracts such as leases, bonds, medical and life policies, monthly accounts and so on?
• What else that will need to be regulated in your particular circumstances?

Also make wills!

Supplement your cohabitation agreement with a valid will (“Last Will and Testament”) or perhaps a joint will. That’s the document that will count when you die and it’s the only safe way of ensuring that your last wishes are carried out, and that the loved ones you leave behind are properly looked after once you’re gone. Your cohabitation agreement and your wills are separate and essential documents, so have your lawyer draw them all for you at the same time.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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“MTl’s business clearly amounted to an unlawful ponzi-scheme, i.e. a fraudulent investing scam promising high rates of return to investors and generating returns for earlier investors with investments taken from later investors.” (Extract from judgment below)

In times of economic turmoil, the promise of “easy money” can be incredibly enticing. Unfortunately, this allure often leads people into the clutches of fraudsters who operate ponzi and pyramid schemes.

But why are these scams so successful at fooling even the most astute investors? The answer lies in several factors. First, the promise of quick and substantial profits taps into our desire for financial security and independence. Second, scammers often prey on our emotions and exploit our fear of missing out on lucrative opportunities. Third, they employ persuasive tactics, such as using testimonials and social proof, to gain our trust.

The latest High Court judgment in the MTI (Mirror Trading International) liquidation saga highlights yet again the dangers for investors who get sucked into these schemes.

“An illegal and unlawful scheme”

• MTI was founded in 2019, promising high returns to investors (members of “My MTI Club”), pooling bitcoin for trading “on the global cryptocurrency market”. In 2020, referral bonuses for introducing new members were implemented.
• This latest judgment is part of an extensive saga of litigation involving liquidators, investors/members, creditors and directors (who still steadfastly deny any wrongdoing). In this matter the liquidators applied to the High Court for a series of declarations aimed at facilitating their claims against investors and others.
• The liquidators succeeded in obtaining declarations that –
  • MTI’s business model is “an illegal and unlawful scheme”, and
  • “All agreements concluded between MTI and its investors in respect of thetrading/management/investment of bitcoin for the purported benefit of the investors, are declared unlawful and void ab initio [void from the beginning]”.
• They failed in their attempts to have MTI declared “factually insolvent” (i.e., its liabilities exceeded its assets) from 2019, nor did they obtain declarations that payments made by MTI to investors/members, commission earners and others amounted to “dispositions” recoverable by the liquidators. Both would have made it easier for them to recover from anyone who ever received any form of payout from MTI, but that is unlikely to deter the liquidators from pursuing these claims.

In any event both sides will presumably appeal this latest judgment, and for now at least it seems that investors/members, whether “winners” (those who got payouts exceeding their investments) or “losers” (presumably the vast majority of investors/members as is invariably the case with ponzi schemes), must remain concerned that not only will their claims turn out to be valueless, they may also have to pay back into the liquidation everything they were ever paid out if the declarations of illegality and voidness are confirmed on appeal

Even if their claims are eventually allowed and proved, they must wonder what if anything they’ll be awarded in light of a R931m preferent claim proved by SARS.

The red flags to share with friends, family, colleagues and employees

The bottom line is that, when a ponzi or pyramid scheme inevitably collapses, investors risk losing everything.

To protect ourselves and others, it’s essential to be aware of the warning signs. Keep in mind at all times that “if it looks too good to be true, it probably is” and be alert to key “red flags” such as guarantees of high returns with little or no risk, complex investing and compensation structures, and an emphasis on recruitment rather than product sales.

Sharing this information with friends, family, and colleagues is crucial in preventing more people from falling victim to these schemes. Employers, in particular, should educate their staff about the dangers and provide resources to help them avoid becoming victims.

Stay informed, be vigilant, and protect yourself, your employees and others from the siren call of “easy money.”

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

“…an employer may not require or permit an employee to work … overtime except in accordance with an agreement” (Basic Conditions of Employment Act)

All employers and employees need to know of a recent Labour Court judgment holding that an instruction to work overtime in the absence of an agreement is unlawful.

A lapsed overtime agreement makes dismissal unfair

• A company’s Site Manager instructed four employees to work overtime to meet production targets but they refused, citing safety issues on the day in question.
• They were charged with gross insubordination and subsequently dismissed.
• They took the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) to dispute the dismissals, and when the CCMA found that the dismissals were substantively fair, they applied to the Labour Court for review.
• Although the CCMA commissioner had found that there was a work agreement in place that bound the employees to work overtime as and when necessary, the Labour Court held that the overtime clause in their contracts of employment had already lapsed by the time the instruction was issued.
• Moreover, on the facts there was no evidence to support any inference of an “implied or tacit” agreement to work overtime on this particular day. Said the Court: “…an agreement [to work overtime] could be inferred only when an employee had actually worked overtime without prior consent.”
• The Court’s conclusion – without an agreement to work overtime on the day in question, the instruction was unlawful, and the dismissal accordingly unfair.
• A further finding by the Court, although of practical relevance only to one employee whose agreement to work overtime remained valid, is nevertheless well worth noting: “The sanction of dismissal should be reserved for instances of gross insolence and gross insubordination as respect and obedience are implied duties of an employee under contract law, and any repudiation thereof will constitute a fundamental and calculated breach by the employee to obey and respect the employer’s lawful authority over him or her.” In this case “There was no evidence that the applicant employees acted willfully and repeatedly … Obviously, a progressive disciplinary sanction in a form of a warning or final written warning could have availed.” (Emphasis added)
• The employer was ordered to reinstate the employees, retrospectively and with full back pay.

The law

Agreement is essential: The BCEA (Basic Conditions of Employment Act) regulates overtime and provides that overtime is voluntary: “…an employer may not require or permit an employee to work … overtime except in accordance with an agreement”. It is up to you as employer to prove that a valid agreement is in place – so whilst a verbal agreement is perfectly fine in practice most of the time, a written agreement will prove invaluable in the event of any uncertainty or dispute.

When overtime agreements lapse: The BCEA also specifies that an overtime agreement “concluded … with an employee when the employee commences employment, or during the first three months of employment, lapses after one year.”

The bottom line

Make sure you have valid overtime agreements in place and renew them if they lapse. As always with our labour laws remember that the complexity and the downsides of getting it wrong make specific professional advice an easy decision.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

“… a person shall by prescription become the owner of a thing which he has possessed openly and as if he were the owner thereof for an uninterrupted period of 30 years or for a period which, together with any periods for which such thing was so possessed by his predecessors in title, constitutes an uninterrupted period of 30 years.” (Prescription Act)

Here’s another warning to be vigilant when it comes to someone else occupying any part of your property for 30 years or more – you could wake up one day to find you’ve lost your ownership altogether. With not a cent’s purchase price to show for it.

And whilst 30 years may seem like a long time, judging by the cases that come before our courts it does regularly take property owners by surprise.

A feature of our law since Roman times, “acquisitive prescription” is a legal process that allows a person to acquire ownership of a property through long-term occupation.

The requirements for acquisitive prescription

To succeed in such a claim under our Prescription Act, the possessor must prove at least 30 years of continuous “possession” both openly, and as if the owner. “Possession” in this context refers to “civil possession”, a concept which (to put it as simply as possible) means physical possession with the intention of owning the property. Whether or not you think you are the true owner or know that you aren’t, is irrelevant here.

Somewhat more colourfully, you may also come across the Latin phrase (beloved in legal circles) “Nec vi, nec clam, nec precario” – meaning in essence that your possession must be “without force, without secrecy, without permission.”

Let’s have a look at a recent and illustrative case in which a property owning company’s attempts to retain ownership of a piece of its land came to nought.

The buyers who didn’t notice a nursery and park on their land – for 31 years

• In 1993, two individuals bought a property-owning company and were appointed directors. Their plan was to develop and sell the thirty-nine plots owned by the company.
• Unknown to them, a neighbour had since 1990 occupied a portion of the (then undeveloped) property. The possessor had at her own cost transformed the land into a nursery and community park, using water and electricity from other neighbours and reimbursing them.
• The directors had never noticed the nursery and park as they drove past because neither was visible from the road, being hidden by dense vegetation. They assumed the nursery was on neighbouring land.
• After 31 years of continuous occupation the possessor asked the High Court to order registration of the occupied land into her name.

Was the possessor’s illegal use of the property a factor?

• One can imagine the directors’ shock at learning that they stood to lose a portion of their property, with zero compensation.
• One of the defences they raised was that the possessor’s illegal use of water and electricity on the property, her failure to apply for rezoning, and her unauthorised use of the property as a nursery all prevented her from meeting the requirements for acquisitive prescription.
• Not so, held the Court, her possession was in itself not unlawful and her illegal usage did not affect her possession of the land as owner.
• The property will now be registered into the possessor’s name.

Owners – monitor your property!

As a registered owner monitor your property and take action against any occupiers. Or indeed against anyone using your property for anything, because “servitudes” (rights of use or access over your property) can also be acquired by prescription.

Before you buy…

The losers in this particular case would have saved themselves a lot of pain if back in 1993 they had checked properly for occupiers on the company’s land – don’t fall into the same trap!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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