Employers may be tempted to get an employee to pay for the cost of damages or losses which he or she causes by simply deducting the money from his or her salary. This would be a handy way to hold employees to account and to get them to take better care of the employer’s property. But it’s not that simple…

Section 34 of the Basic Conditions of Employment Act 75 of 1997 allows an employer to make deductions from an employee’s salary, but only if he or she agrees to it in writing. And, even if the employee does agree, the deduction will only be legal if it meets the requirements of subsection 2:

  • The loss or damage must have occurred in the course of employment.
  • The loss or damage must have been as a result of the fault of the employee.
  • The employer must follow a fair procedure and give the employee a reasonable opportunity to show why the deductions should not be made.
  • The total amount of the debt may not exceed the actual amount of the loss or damage.
  • The total deductions from the employee’s remuneration may not exceed one-quarter (25 per cent) of the employee’s remuneration in money.

This means that an employer will almost never be able to dock an employee’s salary to recover damages or losses which the employee causes to the employer. Also, the employer will not easily be able to hold an employee to account for negligence or even intentional actions which cause the damage or losses.

The idea is that it would be against public policy for an employer to make judgments on an employee’s liability and then to recover the losses by making the deductions. Only a court of law has the authority to make judgments and to impose orders for compensation. The rule would apply even to the “open and shut” cases in which it is obvious that the employee caused the loss.

Not many employees will agree to pay for losses they cause, especially if the employee is also disciplined or dismissed for the act which caused the loss. The employer can issue summons in the civil court to claim damages for the losses. But it is only likely to do so if the loss is great – and then only if the employee would have the ability to pay.

Employers should include a clause in contracts of employment that specifies the circumstances in which deductions may be made and the procedure to follow. This would secure the employee’s agreement up front and meet the requirement for a fair procedure. However, it would not guarantee immunity for the employer because the employee could still legitimately dispute liability on the facts of an event which happens at some time in the future. But it could at least go some way to alerting the employee to take proper care of the employer’s property.