An employer may only make a deduction from an employee’s remuneration on the basis of a written agreement provided that they have complied with s34(2) which, inter alia, requires an employer to follow a fair procedure and to allow an employee a reasonable opportunity to make representations as to why the intended deduction should not be made.
The question then arises whether s34 applies where an employee does not report for duty, and in what instances an employer is entitled to rely on the principle of “no work, no pay”.
In the recently decided case of Mpanza and Another v Minister of Justice and Constitutional Development and Correctional Services and Others (JS708/14)  ZALCJHB 48, the employees sought an order declaring the deductions from their remuneration to be in contravention of s34 of the Public Services Act (PSA) read together with the s34 of the BCEA.
The employees, who were the applicants in the matter, were appointed to the department, who was also the first respondent, in the positions of Senior Advocate and State Advocate respectively as in-house counsel. In October of 2010, the department disbanded the in-house legal unit and the employees were then temporarily seconded to different units within the same department at the same place of work. The employees allegedly refused to take up such secondment and raised an issue as to the lawfulness of the aforementioned secondment.
The employer didn’t pay the employees for the period that they did not take up the secondment.
The employees argued that at all material times they reported for duty and thus the deductions from their remuneration were unlawful. The department argued that the deductions from the employees’ salaries were lawful in that the employees did not report for duty and that it had evidence to prove same.
The Court confirmed that the standard of proof when dealing with these matters is a balance of probabilities and a Court is called upon to decide which version presented to it is more plausible. The Court held that the employees did not present any evidence proving that they did report for duty, while the department called witnesses and produced documentary evidence in support of their claim that the employees had failed to do same. The Court concluded that the version of the department was not shown to have any inherent impossibilities and accordingly accepted the version of the department that the employees did not report for duty.
The Court further reiterated that the employment relationship remains a reciprocal relationship. The Court quoted the judgement of Coin Security (Cape) v Vukani Guards & Allied Workers’ Union and reminded us of the following:
“The employee is under an obligation to work and the employer is under an obligation to pay for his services. Just as the employer is entitled to refuse to pay the employee if the latter refuses to work, so the employee is entitled to refuse to work if the employer refuses to pay him wages which are due to him.”
The Court held that because the employees failed to tender their services to the department, the department was entitled in law to implement the no-work, no-pay, no-benefit rule. The Court held further that s34(2) (b) of the BCEA places an obligation on an employer to follow fair procedure before making any deductions to an employees’ remuneration. The Court was satisfied that the department had met the standard of procedural fairness in that the employees were given a reasonable opportunity to make representations.
This judgment reminds employers that any deductions from the remuneration of employees must be both procedurally and substantively fair. Employers must ensure that proper records are kept of employee attendance in order to produce conclusive proof in Court of alleged failure to report. Furthermore, employers must ensure that the process followed in making any deductions from the remuneration of an employee is procedurally fair, and that an employee is given an opportunity to make representation as to why the intended deductions should not be made.
Despite this judgment, it may be argued that a failure to report for duty should not be classified as a deduction in that the employer simply and only paid for the performances of the employees. As the Court rightly pointed out, the employment relationship is a reciprocal one and thus where an employee fails to report, the employer should have an automatic right to pro rate an employee’s remuneration and that same should not be classified as a “deduction”.
Written by Hugo Pienaar and Riola Kok