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Author: MHI Law

YOU CAN ATTEND TO THE REGISTRATION OF YOUR HOME OWNER’S ASSOCIATION WITH THE COMMUNITY SCHEMES OMBUD SERVICE BY YOURSELF

YOU CAN ATTEND TO THE REGISTRATION OF YOUR HOME OWNER’S ASSOCIATION WITH THE COMMUNITY SCHEMES OMBUD SERVICE BY YOURSELF

The Community Scheme Ombud Service Act 9 of 2011 and its Regulations, (“the Act”),  came into operation on 7 October 2016.

Said Act is applicable to all community schemes, which are defined in the Act as, ”any scheme or arrangement in terms of which there is shared use of a land and responsibility for parts of land and buildings, including but not limited to a sectional titles development scheme, a share block company, a home or property owner’s association, however constituted, established to administer a property development, a housing scheme for retired persons, and a housing cooperative as contemplated in the South African Co-operatives Act, 2005 (Act No. 14 of 2005) and ‘scheme’ has the same meaning”.

Thus, no matter how small the HOA that you belong to, the Act will still be applicable and registration of your HOA in terms of the Act is compulsory.

Upon commencement of the Act, a juristic person, known as the Community Schemes Ombud Service, have been established, whose main purpose is to provide a dispute resolution service, and to promote and regulate good governance of community schemes, including the implementation of organisational systems, controls and measures to enhance the efficient financial and economic management of all schemes.  Some of these measures include the lodging of annual returns at the Chief Ombud, as well as the payment of levies to the Ombud Service, by every unit within a scheme, based on a prescribed rate.

This article’s focus is however mainly directed at the process to be followed in order to register your HOA with the Ombud Service.

The Act is written in clear and concise language, and is quite easy to understand. Chapter 5 of its regulations contains prescribed forms that have to be completed and filed with the Ombud Service in order to register your HOA.

Section 18(3) of the regulations to the Act requires a community scheme, which includes a HOA, to complete and file registration Form CS 1, attached to the Act, within 30 (thirty) days after the regulation came into effect, (thus within 30 days after 7 October 2016), or on the date of incorporation of the community scheme in terms of the applicable Act.

The contents of the form require inter alia the following documentation regarding the scheme to be sent to the Chief Ombud, namely, the completion of the name of the community scheme, contact details of the scheme, names and contact details of the trustees and the authorized representative of the HOA, details of the managing agent if applicable, as well as copies of the audited financial statements of the scheme and details regarding the scheme’s financial year end. It furthermore requires copies of the Constitution and Rules applicable to the scheme, and also list additional supporting documentation that must be provided should it be applicable.  It then provides you with contact numbers and an e-mail address in order to send the completed registration form to the Chief Ombud.

As the list is quite extensive, we would advise that careful consideration is given to provide all the documentation applicable to the scheme upon application of the registration thereof, also to prevent unnecessary to and fro communication between the Ombud and the HOA, and to ensure a speedy registration of the scheme to what appears to be a rather simple procedure.

Once confirmation of registration of your HOA is received from the Ombud Service, the HOA will be liable for the payment of levies and service fees to the Chief Ombud on a quarterly basis, calculated on the prescribed formula as contained in Chapter 3 of the regulations to the Act.

Should you be uncertain how to calculate your HOA’s levies payable to the Chief Ombud, and/or wish to know more about the other obligations imposed on a HOA in terms of the Act, you are welcome to contact our offices for an appointment.

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)

INVESTING IN A RENTAL PROPERTY

INVESTING IN A RENTAL PROPERTY

Buying a rental property could be an incredible investment opportunity, however, it’s important to make a well-informed decision before investing, as it is not for everyone. Although investing in a rental property provides many benefits, such as a potential extra income, and a way of paying off the property, it poses certain risks as well.

The following should be considered when deciding whether or not to invest in a rental property:

  1. Calculate the upfront costs:

When you purchase a property, there are several upfront costs that would need to be paid. These include bond costs, attorney fees, bank initiation fees and transfer duty. You need to be fully financially prepared before investing in a rental property. In the case of applying for a bond, your financial circumstances will be taken into account, as a means of determining whether or not you will be able to service a loan.

  1. Calculate the ongoing costs:

After the property has been purchased, there are several ongoing costs that need to be considered. These costs include rates and taxes, insurance and maintenance.

  1. Vacant rental properties:

If your rental property is empty for a period of time, you need to ensure that you have the funds to cover the costs of your rental property. You cannot depend on your rental property generating an income 24/7.

  1. Rent:

The amount of rent you can charge your tenant per month will depend on factors such as property type, amenities, etc. This should play a vital role in your decision when buying a rental property.

  1. Rental agreement:

Before a tenant moves in, you need to ensure that you have a very strong rental agreement in place. This agreement will protect the property owner in the case of disputes and damages to the property.

  1. Taxes:

The rent that you receive from the tenant, is not meant to go straight to your pocket. Tax law states that the property owner needs to pay tax on the rent received from the tenant.

  1. Potential tenants:

When looking at potential tenants, it is of vital importance that the owner vet all potential tenants, in the form of credit checks, background checks, etc.

The above-mentioned points should be considered before investing in a rental property. As mentioned, it could be a sound investment and provide you with a potential extra income once the property has been paid off, however, if not done right, it could cost the property owner dearly, so be sure to make a well-informed decision before investing.

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)

Choosing guardians for your minor children

Choosing guardians for your minor children

My husband and I have two minor children. I am concerned about who will look after our children in the event of my husband and I passing away at the same time. We have been advised to nominate guardians in our wills. What should I keep in mind when choosing guardians?

Choosing guardians for your children is one of the hardest and most important decisions you will ever have to make. The thought of someone other than you raising your precious children is gut-wrenching. The worst part about it? You’ll never be fully comfortable with the choice, because no one can do as good a job as you. There is no perfect choice. However difficult it may be, naming guardians is a must-do for every parent. If the thought of placing the future of your children in someone else’s hands makes you queasy, imagine leaving the decision to someone you do not like, or do not even know. That is why parents should pick legal guardians – the persons who should raise their children if both parents die before the children turn 18.

When preparing a Last Will and Testament, the emphasis is typically on the disposition of property. However, selecting guardians to care for your minor children and nominating them in your Last Will and Testament is just as, if not more important, than distributing assets. The transition to life with guardians is especially traumatic as children come to terms with new parental figures, likely following the untimely death of one or both parents. The guardians you choose will be responsible for helping to heal this wound. It is of the utmost importance to choose guardians with whom you and your kids are comfortable and who has the emotional intelligence, time and interest to raise your children.

Choosing guardians

The first hurdle in choosing guardians is finding someone who is willing to act in such an important and responsible capacity. Raising someone else’s children is not a decision potential guardians should take lightly, as assuming guardianship will change the rest of the guardians’ lives, as they step into the roles as surrogate parents. Besides finding willing persons, choosing guardians involves objective and subjective assessments different from choosing other fiduciaries such as trustees. Guardians should be reliable and stable, with sound judgment and values that are similar to your own. The guardians will need to comfort, teach and encourage your children as they grow towards adulthood. Guardians who already have a warm and loving relationship with your children would be immensely valuable in such an emotionally trying transition.

Selecting family members

Instinctively, many think the right guardians for their children are family members. However, in some cases, nonfamily members may be a better fit. Naming friends as guardians is increasingly common, though relatives are still the most popular choice. While family is frequently an obvious choice, circumstances may make this impractical or undesirable. Hopefully your children are comfortable with grandparents, or an aunt and uncle who may have similarly aged children of their own. If this is not the case, close friends with similar values, who live nearby, and who have kids of their own, may be a better option than faraway relatives. The choice is specific to your lifestyle and your relationship with your family.

Naming alternate guardians

Unfortunately, couples divorce and families break up. Choosing a couple as guardians could turn out to be problematic if they divorce or one is otherwise no longer able to serve in the role. Such a scenario could give guardianship to a person whom you are less inclined to have raise your children. If alternates are not named and the nominated guardians are unable to care for your children, the decision as to their care could end up being made by a court. As a result, it is advisable to name alternates in case the first choice is unwilling or unable to act. This way your wishes can be carried out and the paths of your children’s lives are not at the discretion of a judge.

Revisiting your choice of guardians

Once you have carefully selected the guardians and alternates and have nominated them in your Last Will and Testament, it is important to remember to revisit the choices as circumstances change. As children (and guardians) age, their needs and abilities also change. You will want to make sure that the people you selected a few years ago are still the right choice today.

Reference List:

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)

THE CYBERCRIMES BILL: MALICIOUS MESSAGING OVER SOCIAL MEDIA COULD SEND YOU TO JAIL

THE CYBERCRIMES BILL: MALICIOUS MESSAGING OVER SOCIAL MEDIA COULD SEND YOU TO JAIL

South Africans will soon have to be much more careful and think twice about the messages they send over WhatsApp and other social media platforms, as the Cybercrimes Bill (“the Bill”), which was recently adopted into law and is in the process of being enacted, attempts to police malicious messaging.

Cybercrime is on the rise and the Bill essentially aims to stop these acts, to keep people safe from criminals and terrorists, to improve the security of the country and to bring South Africa in line with other countries’ cyber laws. The practical impact of the Bill on all organisations and individuals are significant and unfortunately mostly negative. It impacts all of us who process data or use a computer.

Contravening the provisions entailed in the Bill could lead to a fine or imprisonment for a period not exceeding three years, or to both a fine and imprisonment. The Bill fundamentally intends to curb the number of harmful messages, which by definition now covers a wide range of subject areas, that do the rounds on social media.

The Bill incriminates, amongst others, the following acts in particular:

  • Disrupting another’s personal details: By sharing another’s personal details online for malicious purposes, without their knowledge and/or consent.
  • Unlawful sharing of intimate images: Publishing and/or distributing another’s nude intimate images or multimedia files of an intimate nature will constitute a harmful disclosure of pornography, which the Bill seeks to regulate. The Bill describes an “intimate image” as both real and simulated messages which shows the person as nude or displays his/her genital organs or anal region. This includes instances where the person is identifiable through descriptions in a message or from other information displayed in the data message. These acts can cause extensive reputational damage to another, especially if the said person had no intention of making it public.
  • Sharing of information regarding investigations into cybercrimes: The Bill enables the Minister of Justice to make regulations on information sharing. This includes sharing information on cybersecurity incidents, detecting, preventing and investigating cybercrimes.
  • Inticing damage to property belonging to “a group of persons”: Sharing messages which encourage people to damage property belonging to a certain demographic group, could lead to an arrest simply for the incitement rather than the act. This act includes any implied threats of violence against “a group of persons”.

The Bill was first published on 28 August 2015, updated on 19 January 2017 and introduced in Parliament on 22 February 2017, where it currently still sits. There have been extensive comments on the Bill during the public participation period in 2017. These comments have been considered and incorporated and the latest version of the Bill was published on 23 October 2018. The new version of the Bill creates many new offences, some relating to data, messages, computers and networks.

The Bill has come a long way since its first publication and the overall effect of its provisions will be tested over time. Readers are, however, advised to take note of the Bill and its consequences before it is signed into law, as ignorance of the law will not be an excuse.

Reference List:

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)

FIRST-TIME HOME BUYER?

FIRST-TIME HOME BUYER?

Buying a property is a rather big deal, which is why you should be sure that you are able to afford it before you end up running into debt. Owning your own home is a very rewarding experience, but there are usually some obstacles along the way. Follow the steps the below to be sure that your new home is your dream home.

  1. Make sure you have a healthy credit score

Your credit score lets banks know how well (or badly) you manage your debt. A good credit score improves your chances of getting a home loan.

In order to build up your credit score, make sure you pay all your bills on time, every time. Clear as much of your debt before applying for a home loan. If you don’t have a credit card, you should apply for one to aid your score. Check your status by getting a credit report from a credit bureau.

  1. Save up for a deposit

Having a deposit saved makes you more attractive to sellers, agents and banks, which means, if you have a deposit ready, you have a higher chance of getting your loan approved. A deposit also means that your loan repayments will be lower; you’re in a better position to negotiate an interest rate if you have a deposit since there is a lower risk for the bank.

  1. Look out for any additional costs

There are a number of additional costs that are incurred when buying and taking ownership of a house, and these may come as a shock to a first-time buyer.

Make sure to account for additional buying costs such as the loan initiation fee, transfer duty, loan registration costs and conveyancing fees. Also ensure that you take additional homeownership costs into consideration, e.g. loan repayments, homeowner’s insurance, municipal rates and taxes, water and electricity, maintenance, and security.

  1. Ensure the price is worth it

You should make sure that there are no damages to the property. Be sure to check for any leaks, as it might become a costly and annoying long-term problem.

If you’re planning to make this your forever home, you might want to consider what facilities are available nearby in case mobility becomes a problem. Is there a doctor close by? Are the transport links good?

Conclusion

From this it should be clear that buying a house is a rather complex activity that necessitates a lot of thought, calculating, and logical reasoning. It is advised to obtain the help of a professional to be absolutely sure that the money you end up paying is worth all the possible obstacles that you may encounter.

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)

THE CANNABIS JUDGMENT: IS IT LEGAL NOW?

THE CANNABIS JUDGMENT: IS IT LEGAL NOW?

Cannabis has historically been criminalised in South Africa. It has, until recently, been a criminal offence to possess, cultivate or use cannabis. However, this position has been drastically altered by a ground-breaking unanimous judgment by the Constitutional Court in the case of Minister of Justice and Constitutional Development and Others v Prince.

This case came before the Constitutional Court as part of confirmatory proceedings in terms of section 167(5) of the Constitution after the Western Cape High Court declared certain sections of the Drugs and Drug Trafficking Act and the Medicines and Related Substances Control Act inconsistent with the right to privacy as enshrined in section 14 of the Constitution. The Court furthermore ordered Parliament to cure this constitutional defect within 24 months.

The right to privacy can be defined as the right to live and enjoy one’s life with a minimum of interference. Deputy Chief Justice Raymond Zondo who penned the Constitutional Court’s judgment agreed with this definition when he stated that, “It can legitimately be said that the right to privacy is a right to be left alone.” This case thus essentially raised the question of whether or not the State can interfere with what you do in private if such private act does not adversely affect others. The Court found the privacy argument convincing and accordingly found that the prohibition of the mere possession, use or cultivation of cannabis by an adult in private for his or her personal consumption is inconsistent with the right to privacy provided for in section 14 of the Constitution.

It is important to note that the Court did not legalise cannabis as a substance. It was merely decriminalised to the extent that adults may now grow their own cannabis and use it in a private space. The Court, with reference to the cultivation thereof, stated:

“An example of cultivation of cannabis in a private place is the garden of one’s residence. It may or may not be that it can also be grown inside an enclosure or a room under certain circumstances. It may also be that one may cultivate it in a place other than in one’s garden if that place can be said to be a private place.”

The Court did not, however, state what would constitute a private space for purposes of using or cultivating cannabis. It is thus unclear whether or not a private space is limited to one’s dwelling or whether it can include spaces such as motor vehicles or other privately-owned spaces such as restaurants or festival grounds. This is thus something that Parliament will most probably clear up when enacting the legislation as discussed above.

It is of utmost importance to note that the commercialisation of cannabis has not been legalised. It is thus still a criminal offence to cultivate cannabis for commercial purposes or to trade with cannabis. The Court stated in this regard that, “[D]ealing in cannabis is a serious problem in this country and the prohibition of dealing in cannabis is a justifiable limitation of the right to privacy.” The right to privacy as it relates to the use of cannabis is furthermore limited in that the use thereof in the presence of children or non-consenting adults are also still prohibited and thus a criminal offence.

The judgment is very vague as to how much cannabis a person may possess. However, it is advisable in this regard not to cultivate or possess large quantities of it since the Court stated that:

“In determining whether or not a person is in possession of cannabis for a purpose other than for personal consumption, an important factor to be taken into account will be the amount of cannabis found in his or her possession. The greater the amount of cannabis of which a person is in possession of, the greater the possibility that it is possessed for a purpose other than for personal consumption.”

It is clear from the above that there is still a lot of legal uncertainty regarding the legality of cannabis use. Vishnu Naidoo, a national police spokesperson, said that the relevant authorities are currently busy formulating a directive to its members as to what they should do when encountering someone who has cannabis in his or her possession. This will give us some certainty, but complete legal certainty will only be attained once Parliament has done its job.

Reference List:

  • Minister of Justice and Constitutional Development and Others v Prince
  • https://www.dailymaverick.co.za/opinionista/2018-09-18-concourt-cannabis-judgment-what-was-the-reasoning-and-what-does-it-mean/

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)

WHY IS IT IMPORTANT TO DEAL WITH COLLATION IN YOUR WILL?

WHY IS IT IMPORTANT TO DEAL WITH COLLATION IN YOUR WILL?

The South Africa common law presumption of collation (collatio bonorum) is alive and well.

This presumption is rooted in the belief that a testator intended that there should be equality in the distribution of his estate among his descendants (“children”). Collation is the process by which the inheritance of certain descendants (heirs) of the deceased is adjusted to consider any substantial benefits received from the testator during his lifetime.

Collation is achieved by adding to the inheritance the amount due by each heir. The new total shall then be divided between all the heirs. An heir cannot, if he refuses to collate, enforce legal remedies to claim his share of the inheritance.

Collation further takes place by operation of law and therefore applies automatically to your will, or if you have failed to execute a will it applies to your intestate heirs.

If you, therefore, intend to release any of your descendants (heirs) from this obligation to collate it should be clearly expressed in your will, by adding the following paragraph: –

“I direct that my children need not collate any of the gifts or sums of money they received from me during my lifetime and I remit collation so far as they are concerned.”

Or if you specifically intend for one of your descendants (heirs) to collate it should be clearly expressed in your will, by adding the following paragraph: –

“I record that during my lifetime I advanced to my son, Piet Louw sums totalling in all R300 000 (three hundred thousand rand) to enable him to qualify as an attorney and I direct that he collates that sum with my estate before he is paid his inheritance in terms of this will.

An heir who is obliged to collate has the choice of restoring the property he has received or permitting a deduction equal to the value he received at the time of the gift.

Considering the above it is imperative to have your true intentions reflected in your will and to enlist the services of an estate specialist to assist you with your estate planning and the drafting of your will.

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)

BEFORE SIGNING A LEASE

BEFORE SIGNING A LEASE

Tenants often take the signing of a lease agreement lightly and don’t read carefully through the terms and conditions. A proper lease agreement will ensure that both parties’ rights are protected. Landlords must ensure that they include all the necessary information in a lease agreement, while tenants must make sure that all the points discussed with the landlord are included in the lease, instead of just assuming that they are.

Enquire about costs and duration

The monthly rental cost and duration of the lease (including specific dates) must clearly be stated in the lease agreement to avoid any confusion regarding this matter. The lease agreement should also clearly indicate how and when any increases in rent will take place. If the landlord doesn’t provide you with this information, ask him/her to give it to you in writing so you can keep it on record.

The lease should also clearly explain any deposits (e.g. the rental deposit) that have to be paid, as well as the terms and conditions regarding the refund of deposits. All other variable usage expenses (like water or electricity) that the tenant will have to pay should also be clearly stated.

Some rental properties include utilities within the monthly rental cost, while others don’t. Some properties might offer on-site gym memberships, for example, which could save you money. Before you sign the lease to a property, ask your landlord what is included in the rental rate.

Get information regarding changes to the property

Once the landlord has agreed to rent out his property to you, make sure that you document any pre-existing damages to the property and its amenities before you sign the lease. Ask whether these damages can be fixed at the landlord’s expense.

Both the landlord and the tenant are responsible for the maintenance of the property. The responsibilities of both parties should be clearly stated in the lease agreement. The lease agreement should also indicate how the tenant must report any problems that require repair.

Make sure which amendments can be made to the property. Rather know the rules and stick to them, instead of making an alteration and then finding out afterwards that your landlord is unhappy with it. Just imagine your landlord’s disgust after finding out that you’ve repainted his freshly white-painted walls red!

Conclusion

Tenants should be sure to understand the contents contained in the lease agreement and that they understand all the clauses, terms and conditions to avoid any surprises later. While renting a property isn’t as much of a financial commitment as buying a home is, tenants should remember that a lease is nevertheless a legally binding document, meaning that they should make sure that they agree with everything contained therein before they sign it.

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)

AGA (SA) – Relevance, enhanced recognition and status for accountants

AGA (SA) – Relevance, enhanced recognition and status for accountants

The journey to reach the Chartered Accountant South Africa CA(SA) designation has been described as one of the most difficult career paths in South Africa. With the professional accounting body, South African Institute of Chartered Accountants (SAICA), being established as one of the best in the world, and providing the highest of standards and excess of opportunities once reached, it is understandably so.

To become a CA(SA), a 3-year degree and honours degree is required, as well as a 3-year training contract, in layman’s terms referred to as “articles” (this might differ depending on studying while performing articles or the level of studies when starting). A trend has been occurring amongst hopefuls on this path, where studies and articles are started, but for various reasons, the honours part of the qualification is not completed. This results in a qualified accountant without a professional title or association to a professional body.

SAICA has recognised the need for qualified accountants to belong to a professional body, and therefore the establishment of the Associate General Accountant South Africa AGA(SA) designation.

With the establishment of the AGA(SA) designation, it allows a significant number of exceptionally-qualified South African accountants to gain access to professional recognition and career development through association with a highly-regarded professional body.

AGA(SA) provides many similarities to that of the CA(SA) designation. As AGA’s are recognised members of SAICA, they must apply to the same code of conduct. Thereby reassuring the public of the integrity of AGAs and suggesting a certain quality of work that can be expected.

Requirements:

  • A SAICA-accredited B.Com degree

  • A SAICA-accredited training contract

AGAs can:

  • Compile financial statements

  • Perform and sign off of independent reviews for companies with a public interest score below 100

  • Register as tax practitioners and assist with tax compilation and planning

  • Design and operate internal accounting systems

  • Provide management with information that enables them to plan, monitor and control their business

  • Communicate information effectively

  • Act as a commissioner of oaths

AGA(SA) benefits:

  • Access to SAICA products and services

  • A subscription to the ASA Magazine

  • Access to CPD

  • Invitations to SAICA seminars and events

  • Access to SAICA Member Services

  • Receive SAICA Newsletters

The relaunch of the AGA designation is a great asset to the public and a very useful alternative for those individuals who don’t necessarily become chartered accountants, giving recognition where it is due. The designation continues to grow in potential, membership and career recognition.

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)

RACISM IN THE WORKPLACE – IT’S NOT ALWAYS BLACK OR WHITE

RACISM IN THE WORKPLACE – IT’S NOT ALWAYS BLACK OR WHITE

Introduction

This article discusses two recent Constitutional Court judgments, which deal with racism, or perceived racism, in the workplace. Although each judgment and respective outcome should be understood in the context of the specific facts, certain parallels are worth noting. Both judgments had to decide whether the language used in the context was racist. In both cases, the employees concerned were dismissed by the employer and the employer’s decision was challenged by way of arbitration proceedings. In both cases, the arbitrator directed that the employees be reinstated. The Constitutional Court, in both cases, applied its well-known Sidumo test to decide whether or not the awards should be upheld. The test determines whether the decision made by the arbitrator is one which a reasonable decision-maker could not reach. The test ensures the constitutional rights to fair labour practices and administrative action which is lawful, reasonable and procedurally fair. The two judgments are now discussed.

Rustenburg Platinum Mine v SAEWA obo Bester and Others

Mr Bester was an employee at Rustenburg Platinum Mine. An incident occurred on 24 April 2013, the details of which were disputed. The Constitutional Court ultimately accepted that Mr Bester interrupted a safety meeting and demanded that a car which was parked next to his own be removed. He pointed his finger at the applicant’s chief safety officer, Mr Sedumedi, and loudly commanded, “Verwyder daardie swart man se voertuig”, in reference to another employee’s 4×4 vehicle, otherwise he would take the matter up with management.

Mr Bester was forthwith suspended pending the outcome of a formal disciplinary enquiry. He was charged with two acts of misconduct, namely: insubordination for disrupting the safety meeting and for making racial remarks, which breached a workplace rule prohibiting abusive and derogatory language. On 28 May 2013, Mr Bester was dismissed by the applicant after being found guilty on both grounds.

Mr Bester referred the dispute to the CCMA for arbitration and the arbitrator’s award was taken on review to the Labour Court, the Labour Appeal Court and ultimately to the Constitutional Court. The arbitrator concluded in his award that the dismissal was both substantively and procedurally unfair and ordered the reinstatement of Mr Bester. However, the arbitrator misdirected himself on the facts and found in favour of Mr Bester that in the context the words “swart man” were used, it was innocuous and for the purpose of identification. This defence had not been raised and was unsupported by evidence. Mr Bester’s defence was to deny making the statement.

In the Constitutional Court, Theron J, in a unanimous judgment, held that to regard the words “swart man” as innocuous in the context, ignores South Africa’s past of institutionally entrenched racism. The objective test had to be applied to the correct facts. On this basis, “swart man” was “racially loaded and derogatorily subordinating”. The arbitrator’s conclusion was one that a reasonable decision-maker could not have reached. The sanction of dismissal was reinstated, due to Mr Bester’s dishonesty in denying making the statement and his lack of remorse.

Duncanmec (Pty) Limited v Gaylard N.O. and Others

In this case, nine employees participated in an unprotected strike and were filmed singing a struggle song which featured lyrics that translate to, “Climb on the rooftop and shout that my mother is rejoicing when we hit the boers”. The employees were found guilty of participating in an unlawful strike action and also for singing a racially offensive song. After being given a final warning for the former offence, they were dismissed on the latter offence. Duncanmec justified its decision by contending that the conduct of the employees irreparably eroded the trust relationship between employer and employees.

Before the Bargaining Council, the arbitrator ordered the reinstatement of the employees, reasoning that the employees showed remorse and that the employment relationship had not broken down irretrievably. In addition, it was necessary to distinguish between singing a song which could cause harm and referring to someone in racist language.

The Constitutional Court, in a unanimous judgment written by Jaftha J, noted that increasing instances of racism in the workplace were becoming worrisome. It held that the use of the word “boer” in isolation was not racist or a racially offensive word, but that in the particular case, its use in the song sung by the employees was inappropriate and racially offensive. The Court, however, in applying the Sidumo test, held that the arbitrator had not acted unreasonably, nor, as contended by Duncanmec, applied her own sense of fairness in determining that the dismissal was substantively unfair. The award was therefore upheld.

Conclusion

In conclusion, in the light of these two recent judgments, it is evident that racism in the workplace is a recurring issue with which courts must deal to hold individuals accountable if their conduct is found to be racially offensive and an infringement of constitutional rights. However, it is unrealistic to expect that courts, or the threat of legal action, can prevent persons in the workplace from persisting with racist behaviour. It is therefore important that employers have adequate rules in place which expressly prohibit racist words and conduct, so that violations can be dealt with expeditiously and effectively. The judgments also indicate that should those found guilty of racism show no remorse, dismissal will be viewed as an appropriate sanction.

Reference List:

  • Duncanmec (Pty) Limited v Gaylard N.O. and Others [2018] ZACC 29.

  • Rustenburg Platinum Mine v SAEWA obo BESTER and Others [2018] ZACC 13.

  • Sidumo v Rustenburg Platinum Mines Ltd 2008 2 SA 24 (CC).

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