“I have heard that in war, haste can be folly, but have never seen delay that was wise.” (Sun Tzu, The Art of War)

Collecting debt from a recalcitrant debtor can feel very much like going to war, particularly if you have to slog through the trenches of a series of increasingly costly court battles.

Which is where Sun Tzu’s warning against delay comes into play, because not starting collection in time could defeat your claim entirely. The reason of course is that debts – with only a few exceptions – prescribe (become unenforceable) after three years. Although that sounds like a long time, it can race by all too quickly! 

Indeed, our law reports are full of cases where creditors have lost large amounts of money through procrastination, so it’s essential to start the process as soon as you think you may have a claim against someone.

It’s important to note however that the “prescription” defence has its limits, as a recent Supreme Court of Appeal (SCA) decision illustrates.

Another bent bookkeeper? 

A Trust sued the sole member of a close corporation (CC) on the basis of allegations (hotly denied by her) that she, her CC, and her bookkeeper husband (since deceased, apparently by suicide) had defrauded a company in a sophisticated six-year scheme. Her husband, as the bookkeeper/accountant of both the Trust and the company, had allegedly made fraudulent payments totalling R21.8m to her CC through a series of fictitious transactions. 

One forensic investigation and an insolvency inquiry later…

The Trust came into the picture when it took over the company in question. It identified suspicious transactions and commissioned auditors and forensic investigators to investigate. Critically, however, it was only during the inquiry held subsequently in her deceased husband’s insolvent estate that the member admitted receiving monies from the CC, and produced the bank statements which came to underpin the claims.

After some R12m was repaid, the Trust sued the member for the balance of R9.8m on two grounds:

1. Personal liability under the Close Corporations Act for being party to the reckless or fraudulent conduct of the CC’s business.
2. Liability for damages as a co-wrongdoer alongside her husband and the CC.

Before defending the claims directly, she raised the prescription defence, saying the claims were more than three years old and thus unenforceable. The High Court agreed with her, but the Trust appealed and the SCA held that the claims had not prescribed and that the trial could continue. 

Let’s see why, and what lessons we can extract from that outcome. 

Why didn’t the Close Corporations Act claim prescribe?

This statutory claim for recklessness or fraud, held the Court, isn’t a “debt” for the purposes of prescription, which only begins to run when a court actually declares a member personally liable. That hasn’t happened, so prescription hasn’t yet started running. 

Why didn’t the damages claim prescribe?

Turning to the damages claim, the Court confirmed that “a debt is not considered due until the creditor knows the identity of the debtor and the relevant facts behind the debt. A creditor is assumed to have such knowledge if he could have exercised reasonable care to obtain it” – only then does the three years start running. 

In this case, the Court held that although the forensic report had raised suspicion against the member, the Trust only acquired enough knowledge of the facts to actually sue her after the insolvency inquiry. The Trust then avoided prescription by issuing Summons within three years of that inquiry. 

The Trust can now breathe a sigh of relief and return to the main trial in the High Court to prove its claims.  

The bottom line: Delay can be fatal!

If you are unfortunate enough to fall victim to a sophisticated fraud, it may not be easy to identify the culprit and establish your claim immediately. But the sooner you call in the forensic investigators and ask us to advise on your best course of action, the less likely you are to have to fight your way through the courts (as this Trust has had to do just to retain its right to continue with its claim). 

“The employer shall ensure, as far as is reasonably practicable, that all persons who may be directly affected by his activities are not thereby exposed to hazards to their health or safety.” (Occupational Health and Safety Act)

The season of goodwill, holidays, celebrations, and year-end functions is upon us once again. And with it comes a timely reminder to employers that, while their “zero tolerance” alcohol-at-work policies may be key to maintaining health and safety in the workplace, they have their limits when it comes to disciplining offenders. 

Two teaspoons of cough mixture

A forklift driver with an impeccable six-year record of service at a beverage manufacturer arrived an hour late for work, then failed a routine breathalyser test – routine in that all employees knew they would be tested on entering and leaving the factory.

He was adamant that he hadn’t been drinking but explained that he’d had some of his neighbour’s cough mixture the night before and another two teaspoons that morning, without knowing that it contained alcohol as he hadn’t read the label.

Critically, he didn’t smell of alcohol and displayed no visible signs of impairment or of being intoxicated.

Nevertheless, he was dismissed for gross misconduct on the grounds that he had breached his employer’s Alcohol, Drug and Substance Abuse Policy, which he knew about and which prohibits employees from having any intoxicating substances in their bloodstream during working hours. It further forbids them from using any alcohol during work or within six hours of the start of their shift. What’s more, it includes a zero-tolerance clause to the effect that no alcohol in an employee’s blood is permitted, and that higher levels of alcohol will automatically lead to a disciplinary hearing and possible dismissal.  

The employee disputed his dismissal at the CCMA (Commission for Conciliation, Mediation and Arbitration) which found it to be substantively unfair and ordered his reinstatement with an award of R24,600 in lieu of arrear salary. This despite the employer’s explanation that a zero-tolerance approach was required because an employee working on machinery while under the influence posed a serious occupational and health risk. 

The employer took the CCMA’s reinstatement award on review to the Labour Court, but it was unable to convince the Court that dismissal was justified. Its failure to do so holds valuable lessons for all employers and employees. 

What must an employer prove to justify dismissal?

As an employer, your duty to ensure health and safety in the workplace may well call for a zero-tolerance policy against substance abuse, particularly in safety-sensitive situations like employees operating heavy machinery (the heavy-duty forklift in this case being a good example). 

But a zero-tolerance policy “will only be accepted where the circumstances necessitate its implementation”. Even then, it doesn’t mean that you can automatically dismiss an employee contravening it. You have to go further.

You need to treat each case on its own merits, and be ready to justify whatever sanction you decide to impose by proving that:

• There was a workplace rule in place.
• The employee was aware of it. Ideally, you should educate staff on the importance of the policy with specific reference to the dangers of alcohol and other banned substances being present in food products, cooked foods, medicines and the like.
• The employee wilfully broke the rule.
• The nature and responsibilities of the job, the significance of the rule, the employee’s disciplinary record, the process of progressive discipline, and the potential harm caused by the misconduct (fitness for duty and threats to workplace safety would be major factors here) are all sufficient to show that dismissal is “appropriate and proportional to the offence that was committed”.

The employer’s challenge in this case was that it couldn’t prove that the forklift driver knew there was alcohol in the cough mixture, leading the arbitrator to accept his version that he had not knowingly breached the zero-tolerance rule. It was also unable to prove that the driver’s faculties had been impaired, an important factor in the arbitrator’s conclusion that dismissal was not an appropriate sanction here. 

No doubt the employer’s case would have been stronger had its zero-tolerance rule specifically required employees to check for alcohol content in all medicines used – but even then, it would still have had to show overall fairness and proportionality.

Are zero-tolerance policies pointless? 

Not at all. Our labour courts have previously upheld dismissals in similar cases. Every case is different, with each matter being a balancing act between the employer’s duty to ensure safety in the workplace on the one hand, and its duty to act fairly in enforcing its disciplinary policies on the other. 

Bear in mind also that this Court was not “re-trying” the matter but only assessing whether or not the arbitrator’s decision could be considered reasonable in light of all the facts and evidence presented. Another arbitrator presented with a different set of facts could well have decided in the employer’s favour. 

The fairness factor

Review your workplace policies and procedures to ensure that they are as tightly worded and as justifiable as possible, and bear in mind that, as the Labour Appeal Court has summarised the legal position, (emphasis supplied): “the law does not allow an employer to adopt a zero-tolerance approach for all infractions, regardless of its appropriateness or proportionality to the offence … The touchstone of the law of dismissal is fairness and an employer cannot contract out of it.”

Employees: This is no “get out of jail free” card

One wonders how often the “cough mixture” defence has been tried both by employees breathalysed at work, and by late-night jollers pulled over at police roadblocks. Of course, it could get you off the hook, just as it did our forklift driver here, but don’t take a chance on it. And don’t unwittingly break the rules – check what’s in your medicines before you take them!

Our employment laws are complex and the penalties for getting them wrong substantial, so call us if you need any help in reviewing or enforcing your workplace policies.

“South African drivers, beware! Scammers are issuing fake traffic fines to catch you off guard! Always use AARTO approved collecting agents for your payments.” (Road Traffic Infringement Agency)

The national rollout of AARTO has again been postponed, this time to July 2026. Speculation is that we now won’t see the demerit system implemented before the middle of 2027, but both dates remain provisional until gazetted. 

None of this should stop us from sharing with our families, friends, colleagues and staff this warning: Scammers don’t care about the delayed rollout date, they’re too busy stealing from harried motorists.

How to avoid being scammed 

Beware of these common scams:

• Phishing emails, SMSs and WhatsApp messages. They can look exactly like official communications from genuine organisations – your local traffic department perhaps, or the National Traffic Information System (Natis).
• Links to fake payment portals and official websites, cloned to look like the real thing.
• Phone calls from helpful “officials”, warning you of “overdue” fines and kindly offering to guide you through a quick and easy payment process to avoid all the horrendous consequences of failing to pay. 

These “ghost fine” frauds all take advantage of the confusion swirling around everything AARTO, and use a blend of threats (“If you don’t pay you face arrest and suspension of your driver’s licence”), incentives (“Pay within 5 days to get a 50% discount) and deception to con you into rushing payment.

Use only official, legitimate payment channels. If you aren’t sure, check with your local municipality (or ask us to check for you).

“Beneficiary”, “Heir” or “Legatee”?

Commonly used interchangeably in the context of wills and estate planning, these terms do in fact carry different meanings, and the distinction can be important. Simply put, a “beneficiary” is anyone who benefits under a will. A “legatee” is a type of beneficiary who is left a specific item, amount or benefit (e.g. “I bequeath R100,000 to Mary”). An “heir” on the other hand, is a beneficiary who is left the residue of the estate (or a percentage of the residue) after all other beneficiaries, estate debts and administration costs are settled.

A final thought – if you haven’t heard of a legatee before, you’re in good company. It’s used mostly in legal circles because “beneficiary” and “heir” are more widely understood by lay clients and often used as umbrella terms covering all three concepts.