[Question] Non-payment of salaries

[Adrian Partridge]

Good morning all,

Can anyone shed some light on the proper procedure to deal with non-payment of salary by an employer? I have a situation whereby a client has not been paid for March 2010 (due end March of course, and including a couple of substantiated expense claims). Now, the April salary has also gone unpaid.

Needless to say the company has cited various reasons for this (the most obvious being a lack of cash at present) - it is also undergoing a shareholder buyout (minority shareholder purchasing the bulk and taking control; deal to be concluded - apparently - tomorrow, and money will change hands). The 'new' owners have been provided with a list of current creditors/liabilities, for which the two unpaid salaries/expense claims are included. A spurious "waiting for money/pay next week" is all that has been received to date by way of answer.

Any suggestions on how to pursue this? The CCMA have suggested going by way of the Dept. of Labour, as 'non-payment issues are not in our purview' - whether correct or not I cannot tell - I am not a labour expert.

Thanks and regards,

Adrian

[sterne.law@gmail.com]

Most unpaid salary claims are handled via the department of labour. Unfortunately the department is a rather toothless dog and there is more chance of Bafanna scoring a goal at the World Cup than the Dept producing much results.

There is some confusion, as you mention a client. Possibly he is an employee and you handle clients personal taxes or the like, alternatively the client invoices people. This may rule them out of the employment arena in which case it becomes a civil issue.

Working within the employment context, an unpaid salary can be brought before the CCMA by a manipulating of the rules so to speak eg unilateral changes, the contract is broken and a dismissal is affected etc, etc. This however takes some time. by the same token the employee is not required to render service until payment is received and cannot be disciplined for non attendance or unlawful strike.

I normally suggest a letter which demands action and at the same time sets up a constructive dismissal case. Where an employee is not receiving their salary, work conditions become intolerable and in most cases the employee wins a constructive dismissal matter in this context. Depending on the employee's circumstances, the letter may also volunteer the employee for retrenchment thus procurring money, severance and being able to claim UIF, if relevant. Many raise the question that this is great but only if payment is made. The advantage of this route means that if the employer has agreed and they then close the door, the employee has the claim for that amount and as a preferential creditor will in most circumstances get paid maximum.

[Adrian Partridge]

Thanks Anthony, I concur - had about as much hope of a resolution through those guys (i.e. labour) as you describe!

To put you out of your misery: the 'client' is a normal employee, but runs a small secondary business (as a 'hobbyist') - I administer the secondary stuff for him.

[manhav]

I agree with Anthony regarding the CCMA route.

The other option is to sue the employer in the civil court (Magistrate Court) for unpaid salary and expenses. If summons is served on the employer, one of the following will happen:

a) The employer will defend the action, and make a plan to pay the outstanding salaries so that judgment cannot be taken against the employer;

b) The employer will defend the action, and will buy itself time until the matter goes to trial in about 6/7 months;

c) The employer does not defend the action, the employee obtains default judgment and proceeds with a warrant of execution.

Irrespective of the above, I think that in such circumstances, the employer-employee relationship has been damaged and is beyond repair. I will also only suggest the above action in instances where the employement contract was terminated and the employer failed to make any payments to the employee.

[Adrian Partridge]

Agreed again, and thanks - relationship has indeed broken down, I don't think there is much trust left there anymore. I understand that some sort of resolution is due this Wednesday; I will forward on the comments received here

[maria71]

Forgive me if this is not the correct place to type this: I have been employed in a project based construction company, the company came into cash flow problems and have been unable to pay salary for over a year, at first I did not look for anything as daily I was assured that money will be in tomorrow, next Wednesday, end of the month, and time went on, when I did start looking for a position my bad credit score has made unable to apply for most in my field of work, I receive a letter from the company stating the reason for my bad credit as non payment of salary, that didnt help much, it has come to the point where I was assured that my rent would be paid monthly as I was facing eviction and that was done for only one month, I was evicted and for the last month I have slept on the floor in my office, which is on the company owners property, even still today I am told that in just a very short time could be just days I will receive all the money owed to me. I have a letter guarantee that states that my boss in his personal capacity and in the letter are listed all the companies that he holds - irrevocably guarantees - that as soon as money comes in, I will receive my payment. I have reached a state where I just cannot anymore, I cannot sleep on the floor while he sits in his house with his domestic worker, gardener, 3 cars and lives happily coming in daily to see my blankets on the floor knowing that most nights I do not even have anything to eat. I confronted him yet again this morning and I was not very happy and all he said to me was that I best not threaten him because he will just close the company and i would lose all the money, I reminded him about the guarantee listed in his personal capacity and said he would then have to close all the companies and he just said that I should try taking that further I wouldnt get anywhere. I have lost everything I have had, I sold everything to get by believing he would pay me, I have worked everyday sending emails doing all he has asked to try and further the process of receiving my money, with all the holidays he has not bothered to take the 50 steps to come in to the 'office' where I sleep and he did today where I told him I needed some money as I had not eaten for days and had not had anything to drink, after some time he came back with some toilet paper and some coffee sugar and milk, stating he also does not have money and didnt have any cash to give to me. I do not mean to put my life into a forum, I am really just trying to explain the situation, call me crazy and call me a fool I have felt that for some time now, I have not sat idle just waiting, I have applied for every position I can, I get to the interview, all goes well, then I get credit checked and from there the process just falls apart. Please could someone give me advice on what to do. He told me this morning that if I threaten him, then I will no longer be allowed to sleep in the office or have use of the car, I will then have to pack up what I have and he will drop me wherever and then I must consider it as been at war with him, which he says will not be a good thing to do. I have all documents, I have the over 200 emails I have sent him stating my situation asking to get paid. I just need some advice because between this rock and hard place I cannot be anymore.

[Dave A]

Some posts just make me want to cry.

Maria, I hope you find the strength within you to take Anthony's advice (post 2 above). It would seem to be your most viable option.