Illustration: Mangena

The Credit Ombud, Nicky Lala-Mohan, says it seems there is still widespread abuse of the garnishee order system to deduct debt repayments from employees, despite a far-reaching Constitutional Court ruling almost two years ago tightening up the issuing of these orders.

In September 2016, the Constitutional Court confirmed a High Court ruling by Judge Siraj Desai that aspects of the enforcement of emolument attachment orders (EAOs, commonly but incorrectly referred to as garnishee orders) were unconstitutional.

An EAO is a court order that forces an employer to deduct an amount from an employee’s wages or salary to pay a third party, such as a creditor.

EAOs can now be granted only by a judge or a magistrate and must be granted in the court with jurisdiction in the area where the debtor resides or works. The debtor and the debtor’s employer must be given notice of the creditor’s intention to have the EAO issued, and the consumer has 10 days to oppose the order.

“When Judge Desai ruled that some EAOs were unconstitutional, unlawful and invalid, we all hoped that this could bring relief to the consumers who suffer from the abuse and exploitation of EAOs,” says Lala-Mohan. “Concourt Judge Raymond Zondo also ruled that the amount to be deducted needed to be appropriate and fair.”

Before the ruling, many EAO applications from creditors were processed by court clerks, without the oversight of a judge or magistrate. “There had been abuse of consumers, with many unaware of the correct process to follow,” Lala-Mohan says. 

Cap on amount

Subsequent to the Constitutional Court ruling, the Courts of Law Amendment Act was promulgated, placing a cap on the amount that can be attached: not more than 25% of the consumers’ gross earnings. This, the ombud says, went a long way to ending situations where consumers have been left with almost no salary after EAO deductions.

The Credit Ombud, who often receives and investigates complaints relating to EAOs, recently met with the South African Human Rights Commission (SAHRC) and the National Credit Regulator (NCR) to discuss measures to address undesirable practices, which “appear to thrive despite the latest legislation”. 

The ombud says it is important to establish the extent to which the new legislation has improved conditions for consumers. 

Are the courts implementing the new requirements, and are employers fulfilling their role in scrutinising EAOs?

“The SAHRC, NCR and Credit Ombud are committed to continuing with discussions aimed at eradicating EAO abuse,” Lala-Mohan says.

If you are concerned about the validity of an EAO on your wages or salary, you may approach the Credit Ombud for free assistance.

[email protected]