OVERPAYMENTS


21 February 2020

In terms of section 35(5) of the BCEA, we see that an employer may not require or permit an employee to repay any remuneration except for overpayments previously made by the employer resulting from an error in calculating the employee’s remuneration.

The Labour Court has ruled that where an overpayment had been made, all the employer must do is advise the employee of the error in payment and the amount of the deduction it intends to make. It is important to note that this section only applies to an existing employer-employee relationship and to errors in calculating an employee’s remuneration.

Where an employer continues to pay an employee after the employee has left the service of the employer, this section will not assist the employer to recover the money as the section only applies to an existing employer-employee relationship and to errors in calculating an employee’s remuneration.

This section contains provisions relating to the way remuneration is to be calculated.

Section 35 of the BCEA provides for a series of interlocking calculations.

The starting point is the number of hours the employee ordinarily works. Section 35(2) of the BCEA then contains certain deeming provisions, for instance, that the employee ordinarily works 45 hours in a week. Section 35(3) of the BCEA provides that an employee’s monthly remuneration is four and one-third times the employee’s weekly remuneration or wage.

If there are considerable fluctuations in the employee’s remuneration (or if the employee’s remuneration is calculated with reference to something other than time), section 35(4) of the BCEA provides for averaging the employee’s remuneration over a 13-week period.

i. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ii. Compiled by Jaques Bloem, with the assistance of LEXISNEXIS, LABOUR, 19 February 2020.