How do I claim unpaid salaries from my employer?

Question received via freeadvice@legalhero.co.za: 

Hi, Im working for a construction company as a manager.
The company owes me december,january, march and april salaries.
I lost because of not paying my debts. Can you please advise me on what steps to take so that i dnt lose the money im being owed and must the company pay me interest because of late payment?

Dear writer

We are awfully sorry to learn of your misfortune and are happy to offer some basic advice on what can be done to secure your salary and receive your dues.

1)      Department of Labour and not the CCMA/ Bargaining Counsel:

Many people make the mistake of taking the matter up with the CCMA or their Bargaining Counsel. However, as a general rule, all money related matters such as unpaid salary, overtime pay, leave pay, etc. are referred to the Department of Labour.

This is your best option as the Department of Labour offers assistance free of charge. The aforesaid is, however, not an option available to you if you are in senior management and/ or earn more than R205 443.30 per year. This monetary threshold is revised from time to time by the Minister of Labour and published in the Government Gazette.

Should you qualify, the Department of Labour will appoint an Inspector to investigate your complaint of nonpayment, contact your employer and possibly issue your employer with a compliance order ordering payment plus interest by a certain date. In terms of section 70 of the Basic Conditions of Employment Act, you need to inform the Department of Labour of your unpaid salary/ salaries within 12 months.

2)      Going to Court:

Employees can also claim an unpaid salary via the Small Claims Court provided the outstanding salary does not exceed R15 000. The Small Claims Court is free of charge, no legal representation is allowed and the authority of its order is equal to that of a Magistrate’s Court. Visit the Magistrate’s Court in your area and speak to the Clerk regarding the Small Claims Court and a Section 29 Letter of Demand, as each Magistrate’s Court also acts as a Small Claims Court. Going to Court is also the route to take if you were an independent contractor (and not an employee).

Should the monies plus interest owed to you be in excess of R15 000, the matter must be heard by the Magistrate’s Court. You will, however, need a lawyer to assist you with the relevant court documents and procedures.

Your lawyer could also decide to take the matter to the Labour Court. Your employer will receive notice of this application and may decide to oppose the matter or not. Once the Labour Court is convinced of your case, it can issue an order instructing your employer to pay all outstanding monies to you before a certain deadline.

For some the battle does not end here. Should your employer fail to pay in terms of the court order, one needs to go back to court! What often happens next is that the Sheriff will come knocking to draw up a list of all the employer’s assets to be sold in execution in order to cover your unpaid monies.

3)      Interest:

In terms of section 75 of the Basic Conditions of Employment Act, an employer must pay interest on any amount due in terms of the Prescribed Rate of Interest Act. The aforesaid act has recently been amended. Prior to 1 August 2014 the interest rate was 15.5% per year but this has now been changed to 9%.

Remember that an employer only has a grace period of 7 days to pay employees in terms of section 32(3) of the Basic Conditions of Employment Act. Once your salary is more than 7 days late, we advise employees to take the matter up internally by filing a grievance and discussing the matter with senior management.

Should the aforesaid fail, you next step would be to either file a complaint of nonpayment at the Department of Labour should you qualify, alternatively, contact a private attorney/ your legal cost insurance company to get the ball rolling with regards to letters of demand in order to pursue a Civil case.

Lastly, but very importantly, remember that a Civil claim (money claim) prescribes/ expires/ becomes invalid within 3 years since payment/ acknowledgement of the debt provided no legal action was instituted. This means that your unpaid December 2014 salary will prescribe in December 2017. After December 2017 your employer can raise the defense of prescription and you will lose the December money owed to you! We therefore advise that you take action as soon as possible.

We hope this helps and sincerely wish you all the best with this endeavour.

Kind regards,

Legal Hero

www.legalhero.co.za