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Article 8/2023

To what extent is an employer entitled to request that an employee’s pension benefits be withheld pending finalisation of civil and criminal cases for damages caused and unlawful conduct committed during such employee’s employment?

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  • Section 37D(1)(b) of the Pension Funds Act 24 of 1956 (‘the Act’) provides that the fund may
    make deductions from the pension benefits of an employee:

    • in respect of an amount due to the employer by such employee
    • on the date of his retirement or when he ceases to be a member of the fund
    • in respect of damages either admitted in writing or judgment obtained
  • So, what is the scenario where, at the date when the employee ceases to be a member, on a
    prima facie basis, he caused damage to the employer but has not admitted to same in writing, or
    a judgment has not been obtained?
  • In Highveld Steel and Vanadium Corporation Limited v Oosthuizen (2009) 20 (2) SALLR 1
    (SCA), the supreme court of appeal considered the above question and held that the board of a
    retirement fund has the power to withhold payment of pension funds due to an employee pending
    the outcome of a claim of damages to be instituted by the employer
  • Highveld Steel further indicated that the object is to protect the employer’s right to pursue
    recovery of money misappropriated by the employee and that payment is delayed so that the
    employer can properly investigate – however, pension funds are to exercise their discretion with
    care and balance the competing interests of the employee and the employer. The aforesaid
    approach was subsequently followed in SABC v SABC Pension Fund 2019 (4) SA 608 (GJ), as
    well as Jacobs v Telkom (2022) 33 SALLR 23 (GP)
  • Lastly, in Jacobs, the court specifically dealt with the following issues relevant to the exercise of
    the board of a retirement fund’s discretion in the above regard as well as the delays caused by
    the institution of proceedings by the employer:

    • the delay in finalising the matter may not be excessive – in considering whether the delay is
      excessive or not, various factors should be taken into account, namely, the attitude of the
      national prosecuting authority, the failure by the employer to actively pursue civil litigation to
      finality, the failure by the employee to bring an application to review the decision of the
      pension fund adjudicator, etc
    • not only has the employer a duty not to cause a delay, but the employee also has a duty not
      to contribute to the delay
    • the employer is required to establish at least a prima facie right
    • it also has to be established that, if the monies are paid to the employee, he would meet his
      existing financial obligations which, in turn, would leave the employer with no recourse
      (therefore, establishing irreparable harm)

November 9, 2026

Section 187(1)(f) of the LRA reads as follows: ‘A dismissal is automatically unfair if the reason for the dismissal is that the employer unfairly discriminated against the employee, directly or indirectly, on any arbitrary ground, including but not limited to religion, conscience and belief”.

In terms of s187(2)(a) of the LRA, despite the aforesaid s187(1)(f), a dismissal may be fair if the reason for the dismissal is based on the inherent requirements of a particular job.

What approach is to be followed to determine, firstly, whether the reason for the dismissal on the basis of religion, conscience or belief is based upon an inherent requirement of a particular job?

And, secondly, what approach is to be followed to determine whether or not an employer complied with its duty to reasonably accommodate the aforesaid category of employees?

November 2, 2026

In the previous article, we set out the traditional approach to s187(2)(b) of the LRA, covering the scenario where an employee reached the normal or agreed-upon retirement age, but continued to work beyond such age. The constitutional court, in Motor Industry Staff Association and Another v Great South Auto Body CC t/a Great South Panelbeaters (Landman); Solidarity obo Strydom and Others v State Information Technology Agency Soc Ltd (Solidarity) – combinedly referred to as Landman; Solidarity – had the opportunity to scrutinise such traditional approach and delivered three conflicting judgments. So, what approach should role players now employ, seeing that consensus was not reached in the constitutional court?

October 26, 2026

In terms of s187(1)(f) of the LRA, a dismissal is automatically unfair if the reason for the dismissal is that the employer unfairly discriminated against the employee, directly or indirectly, on any arbitrary ground, including, but not limited to, age.

In terms of s187(2)(b) of the LRA, despite s187(1)(f), dismissal, based on age, is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.

What is the approach traditionally adopted where an employer permits an employee to work beyond the normal or agreed-upon retirement age and subsequently wishes to terminate the services of the employee, based on age, and wishes to rely on the defence as set out in s187(2)(b)?