Many employers have been concerned about the effect that emolument attachment orders often have on employees. Since they know what an employee’s take home pay is, they are easily able to see the extent to which an employee’s debt burden may have become overwhelming.
The decision of the Western Cape High Court in The University of Stellenbosch Legal Aid Clinic and Others v The Minister of Justice and Correctional Services and Others handed down on 8 July 2015 offers employers an opportunity to assist their beleaguered employees.
At the outset, it must be noted that nothing in the judgment affects the validity of the underlying debt and the judgment creditor may still explore other means to recover the outstanding debt.
Then, there are two methods set out in the Magistrates’ Courts Act, 1944 for the issue of emolument attachment orders.
In the first, an emoluments attachment order may be issued by the court after a written warning to the judgment debtor, an appearance in court for an enquiry into the debtor’s financial position and a determination by the court of what the judgment debtor is able to repay. This may result in an emoluments attachment order. Nothing in the judgment affects the validity of this process.
The judgment deals with the second method. Here, the judgment creditor may obtain an order based on written consent given by the judgment debtor. It is this method which the High Court dealt with.
Finally, the Magistrates’ Courts Act provides that the emoluments attachment order must be issued from the court of the district in which the employer of the judgment debtor resides, carries on business or is employed.
The High Court judgment
On 8 July, 2015, the Western Cape Division of the High Court ruled that sections of the Act were unconstitutional insofar as they permitted an emoluments attachment order to be based on the debtor’s consent. It also ruled on the interpretation of sections of the Act dealing with jurisdiction. The effect of the judgment is, in brief, that those provisions of the Magistrates' Courts Act are unconstitutional that permit:
- emolument attachment orders based on written consents to be issued by the clerk of the court (thus without any form of judicial oversight); and
- emolument attachment orders to be issued in any court other than the one where the employer of the judgment debtor resides, carries on business or is employed.
This order cannot yet be regarded as the final word on the subject. There is always the possibility of an appeal. But, more importantly, an order of constitutional invalidity by a High Court has no force unless it is confirmed by the Constitutional Court. In the light of judgments on similar issues already handed down by the Constitutional Court, we think that the Court will confirm the order.
In the meantime, and pending clarity on whether any appeal is likely, an employer that wishes to assist employees should review all the emolument attachment orders granted against their employees. There are three particular aspects to be investigated.
First, the employer should identify any orders issued from courts other than the one in which the employee’s workplace is located. In this regard:
- The emoluments attachment order served by the sheriff on the employer will reflect the name of the district court from which the order was issued.
- Any order issued from a court of a district other than the one in which the employee’s workplace is located should be flagged.
- Orders issued in courts of the districts in which the debtor is not employed have been found by the High Court to be unlawful and to be set aside.
- Employees affected by such orders could be assisted to apply to court for such orders to be declared unlawful and to be rescinded.
Second, the employer will need to determine on what basis the order was issued. Was it based on the consent of the employee, or was it issued after a court enquiry?
- The standard form prescribed by the Rules does not provide any means for determining under which provisions the order was issued.
- It will therefore be necessary to determine from the employee himself or herself whether the employee signed a consent form.
- If this remains uncertain, the judgment creditor or the attorney for the judgment creditor who signed the order should be asked for a copy of the written consent signed by the employee.
- Where the order was based on a consent form, the company could assist the employee to apply to court for the order to be declared unlawful and to be rescinded.
Third, an emoluments attachment order may be rescinded or amended if it can be shown that the judgment debtor, after satisfaction of the emoluments attachment order, will not have sufficient means for his own and his dependant’s maintenance. In circumstances where the first two routes are not available, the company could explore this as a means of assisting employees.