What happens if an Employer fails to pay your Benefits and other Statutory Obligations?

Employee Benefits

Most permanent workers have employee benefits as part of their salary packages that employers offer to their staff as incentives. These include pension fund contributions, medical aid allowances, housing allowances, vehicle allowances, cellphone allowances or even commission etc. As we all know by now that all business sectors suffered immensely in 2020 as a direct result of the COVID-19 pandemic and strict lockdown regulations. Many companies received government assistance and benefits, however, employers might have the notion of “desperate times calls for desperate measures” and are electing to withhold certain payments to their staff.

The Constitution of South Africa states in Section 23 that everyone has a right to fair labour practices. Therefore, if an employer fails to meet certain obligations towards its employees, such an employer will be in direct conflict with the Constitution. This may lead to a breach of the employment contract and allow the affected employee to claim damages from the employer.

The employee may also report the employer to the Labour department. A representative called an inspector would attend to the complaint by visiting the employer’s offices and investigating whether certain policies and payment structures are in place and whether they are being adhered to. The basis of an employment relationship is the employment contract entered into between the employee and the employer in terms of which the employee would render services to the employer and the employer would remunerate the employee for the services rendered. This remuneration would include all benefits such as commission structures and any other allowances.

The BCEA provides that employers must pay employees their remuneration in a South African currency on a daily, weekly, fortnightly or monthly basis. An employer must also provide an employee with a payslip outlining the remuneration received, further contributions and benefits, and any lawful deductions made by the employer.

An Employee can also refer a matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) by filling in a 7.11 Referral Form which allows an employee to refer a dispute to the CCMA. This referral can be done within 30 days after the employer fails to deliver their obligation in terms of the employment contract. Furthermore, an employee may also refer an unfair labour practice to the CCMA within 90 days after the issue arose.

If the employee refers the dispute outside the time frame provided, they may apply for a condonation for their dispute to be heard.

Failing to pay certain benefits such as PAYE to SARS or UIF contribution to the Fund is not only a breach of contract but is also unlawful. The employer may be criminally charged and made to appear before the commercial crimes court on charges of theft and fraud.


Should you require assistance with referring a matter to the CCMA or Labour Department, kindly contact us at BBP Law Attorneys.

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