This comes in wake of the recent strikes by Numsa and the strike on the Platinum Belt.
According to Tracey-Lee Lindsay, Candidate Attorney of Malherbe Rigg and Ranwell Incorporated (MRR), the contradiction in Labour Relations Act 66 of 1995 and the Pension Funds Act 24 of 1956 has, however, left a loophole in legislation.
“The Labour Relations Act outlines that an employer is not obliged to remunerate an employee for services that the employee does not render during a protected strike or lockout,” says Lindsay.
“This is further outlined by the common law rule of ‘no work, no pay’ which applies to strikes and lockouts.
“The Pension Funds Act on the other hand has made no provision for the failure of employer’s to contribute to the pension funds in situation such as strikes or lockouts.
“Having said that, an exception to this rule arises where an employee’s remuneration is inclusive of payments made in respect of accommodation, a provision of food and other basic amenities in life.
“It is argued that an employer’s contribution towards the employee’s pension fund falls outside the definition of ‘basic amenities’.
She says where the employer does not have a legitimate reason to withhold such a payment during a strike or a lockout, the employer may not do so.
“The reason for this being, is due to the consequences which arise where the employee will receive a lower benefit when they withdraw from the fund or retire.
“Furthermore, due to the non-payment of salaries it could lead to employees defaulting on, for instance, a homeloan, and the bank then turning to the pension fund as a guarantee.
“Employers who fail to continue to make a contribution towards their employees pension fund could find themselves facing not only hefty fines, but could also be found liable in their personal capacity, as well as criminally liable for the contravention of the Pension Funds Act.”
Lindsay says to avoid this loophole in legislation, the Pension Funds Act will need to make specific reference to the suspension and non-payment of an employer’s contribution toward the employee’s pension fund during a protected strike or lockout, or another applicable situation which may arise.
For queries contact Dino Montepara at dino@mrr.co.za.
