10 July 2015 by and Employment Alert

Emoluments Attachment Orders: No more 'rubber stamping' by Clerks

Debt recovery is obviously big business, and a necessary step in any economy. However some creditors have not acted responsibly in offering loans to employees and then using short-cut processes to try to enforce repayment of the loans with a minimum of court action. Emoluments Attachment Orders are a favoured process, with some of these orders issued by Clerks of the Magistrates' Courts, on the strength of the judgment debtor having consented to the order. This process is open to abuse because of the absence of any judicial oversight and particularly because no evaluation is done of the affordability of the amount to be deducted from the employee's salary.

On Wednesday, 8 July 2015 the Western Cape Division of the High Court declared unconstitutional certain sections of the Magistrates' Court Act regulating Emoluments Attachment Orders.

Judge Desai's decision has the following effects:

(a) Emoluments Attachment Orders may no longer be issued by Clerks of the Magistrates' Courts on the strength of the fact that the judgment debtor has consented to the order being issued; and

(b) it is no longer possible in a credit agreement to which the National Credit Act applies for a debtor to consent to the jurisdiction of a Magistrates' Court outside of the area in which that debtor either resides or is employed.

The practical effect of judgment is that all Emoluments Attachment Orders issued by the Clerk of any Magistrates' Court are invalid. Henceforth Emoluments Attachment Orders must be issued by a Magistrate in open court and, where they arise from an agreement regulated by the NCA, they must be issued in the area in which the employee resides or works.

Before paying any further amounts in terms of Emoluments Attachment Orders, employers would be well advised to check that the orders comply with the new requirements.

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