Today's Labour News

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gavel thumb100 Personal Finance reports that employees whose income is “garnisheed” to pay off their debts will be able to breathe easier thanks to new legislation that was assented to recently.  

On 31 July, President Jacob Zuma signed into law the Courts of Law Amendment Act.  While this article does not indicate the date when the amendments will come into operation, the gazetted Act can be read at   An EAO is an order issued via the courts by a creditor on an indebted worker’s employer, known as the “garnishee”.  It compels the employer to deduct money from the worker’s salary or wage to pay the creditor.  Previously, EAOs were authorised by the clerk of the court, regardless of where employees worked or lived, or whether they were present to defend themselves.  An EAO will henceforth have to be authorised by a magistrate at a court that has jurisdiction.  

The new law will impose a limit on the total amount that may be deducted, which can be no more than 25% of a worker’s salary or wage, regardless of the number of active EAOs against them.  The legislation will not apply retrospectively, meaning that EAOs already in place will not be affected.  The 25% limit will apply to basic income and will exclude additional remuneration for overtime or other allowances, meaning that such additional remuneration cannot be garnished.  Another protective mechanism is a clause that prohibits anyone from requiring a credit applicant to consent to a judgment, instalment order or EAO prior to the granting of a loan.

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