C&A Friedlander Attorneys

Written by: Katleho Leeuw

During 2020, under the strict Lockdown conditions, businesses were left unable to operate at normal capacity, which resulted in an increase in unemployment and unpaid wages as the South African economy was struggling.

Considering the above, for an employee in the South African economy, it is crucial that you are aware of the institutions that aid in claiming for unpaid wages. This article will provide you with possible methods that can be used to claim your unpaid salary. In the instance where an employer refuses/fails to compensate an employee for their labour, as required and stipulated in their employment contract, an employee may claim their unpaid wage through either of the following:

  • The Department of Labour
  • Commission of Conciliation Mediation and Arbitration (“CCMA”)
  • The Small Claims Court

Of the three institutions mentioned above the Department of Labour has proven to be the more effective solution for employees who cannot afford the high costs of litigation but still need legal assistance. The Department of Labour offers an Inspection and Enforcement service in which, upon a reported incident, an inspector appointed in terms of section 63(1) will be sent to fulfil his duties as stipulated in section 64 of The Basic Conditions of Employment Act (“the Act”). The duties, as mentioned above, are established for the inspector to ensure that both the employer and employee comply with the Labour legislation. This is done by the inspector securing undertakings or issuing compliance orders. Upon inspection, if the inspector finds that the employer is not complying with any Labour law provision, which includes the failure of an employer to make payment of an amount due to an employee, they can ensure such compliance through these sections of the Act.

Section 70 of the Act stipulates the Limitation placed on inspectors when issuing compliance orders, and these limitations should be considered before an incident is reported. If an employee is reporting an incident regarding failure of payment, the affected employee must comply with section 6 of the Act, which stipulates that the compliance order cannot be issued for the following employees:

  • Senior managerial employees;
  • Employees engaged as sales staff who travel to the premises of customers and who regulate their own hours of work;
  • Employees who work less than 24 hours a month for an employer.
  • All employees earning in excess of the threshold regularly determined by the Minister, which is R211 596.30 per annum (at the time of writing).

Section 73A of the Act allows for employees who earn salaries in accordance with the National Minimum Wage Act to refer their matters to the CCMA for conciliation and possible arbitration. The referral is done through a LRA 7.11 form that the employee submits to the CCMA in order to commence proceeding. However, it must be noted that if the proceeding is commenced in the CCMA, an inspector can no longer be appointed to ensure compliance and/or issue a compliance order. The CCMA must further appoint a commissioner in terms of section 135 of the Labour Relations Act to resolve the matter, and if the matter is not resolved, such commissioner must provide a Section 135(5) Certificate for the matter to be referred to arbitration.

Employees who claim an outstanding salary of not more than R20 000.00 may rely on the Small Claims Court as an institution from which they can seek relief. The Small Claims Court does not charge any legal costs for appearances. However, costs may be incurred during the service of papers and processing. Legal representation is not required in the Small Claims Court, and the authority of its order is equal to that of the Magistrate’s Court.

The methods and institutions mentioned above assist employees at minimal costs: meaning that these methods are available to employees with or without legal representation. It is important to note, however, that a Civil claim (money claim) prescribes (becomes invalid) within 3 years from the payment/acknowledgement of debt, provided no legal action was instituted. This means that your unpaid December 2018 salary will prescribe in December 2021. After December 2021, your employer can raise the defence of prescription and you will lose the December money owed to you. We therefore advise that you act as soon as possible.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).