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Act! Prevent abuse and domestic violence

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Who is protected from domestic violence?

The Domestic Violence Act 116 of 1998 (the Act) protects people who are victims of the abuse and violence at the hand of those in the following relationships and arrangements:

  • Marriage in terms of any law, custom or religion;
  • Cohabitating but not married to each other;
  • Biological parents of a child or sharing parental responsibility;
  • Family members by blood, in-laws or through adoption;
  • Previously dating, engaged to be married or in any perceived romantic relationship or any intimate or sexual relationship for any period of time; or
  • They share or recently shared the same residence

Similar protection has been recently provided by the Protection from Harassment Act 17 of 2011 to persons who are not related or in the abovementioned relationships. What makes victims of domestic violence uniquely vulnerable however is that these crimes are committed by relatives or intimate partners, further exacerbated also by the stigma associated with abuse and domestic violence. Noticing and acknowledging an abusive relationship is said to be the first step towards ending it.

Other forms of domestic violence

Psychological experts say that the underlying cause of domestic violence and abuse is control, which can take many forms, such as:

  • Rigid control of finances and withholding financial means in order to exert control.
  • Sabotaging of the victim’s job by making them miss work and calling constantly.
  • Isolating the victim from family and friends in order to increase dependency on the assailant.
  • Intimidation designed to scare the victim into submission.

How victims can get help?

Domestic violence cases are highly prioritized by the police. The police go to great lengths to treat these cases with the urgency, sensitivity, confidentiality and empathy that they deserve.

Victims of domestic violence may:

  • Apply for an interim protection order at the nearest police station, or magistrate’s court. At the Magistrates Court the court officials will assist and direct the victim to the specialized domestic violence court for issuing of a protection order.
  • Lay criminal charges at the police station, where the police officers are obliged to arrest the assailant immediately if there is reason to believe that an act of violence has been committed or where there is a real threat that it will happen. The police will further search the premises and seize firearms and dangerous weapons in the possession of the person who has threatened to harm another.
  • Consult an attorney who will assist with the speedy application for a protection order, and with any further necessary legal recourse for the benefit of the victim.

As result of the psychological trauma associated with domestic violence victims will also be assisted to find access, where necessary, to:

  • Medical attention
  • Shelter
  • Victim counselling

What is a protection order?

Protection orders are effective in preventing further abuse and domestic violence. They are court orders which are issued at the request of domestic violence victims, ordering the assailant to stop the acts of domestic violence and often include prohibitions that the assailant should not contact the victims. These orders can be issued at any time of night or day. Before the protection order is made final by the specialized court dealing with domestic violence cases, the assailant is given a date to appear at court to give reasons why the order should not be made final. The domestic violence court setting is appropriate to deal discreetly with domestic violence cases and only legal representatives, court officials and people providing support to the victim are allowed in the hearings.

What can a victim do if the assailant disobeys a protection order?

A protection order is issued together with a warrant of arrest to enable the police to arrest the assailant who disobeys the protection order particularly where the victim is in immediate danger. After the arrest of the assailant he/she will be brought before court the next working day on criminal charges of contravening the protection order.

Where the police fail to carry out their duties in domestic violence cases, they may be reported to their station commander and such complaint will be noted in the complaints register and disciplinary steps will have to be taken against the police concerned.

Conclusion

The bottom-line is that for any of the mentioned protection to be afforded to the victims of domestic violence, the victims must take the first step to act. Once the protection order is issued victims should still take precautions such as keeping emergency numbers (including those of the police) on speed-dial or carrying them readily available, also making copies of the protection order for close and trusted friends and relatives who are aware of the situation. 

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Divorce mediation as an option

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In the case of Brownlee v Brownlee the court emphasised the duty of the parties to attempt to mediate their dispute before appearing before a competent court and the obligation of the law practitioners to advise and encourage their clients to enter into divorce mediation.

Mediation can also help address issues relating to the care of children, and in this regard Section 6(4) of the Children’s Act should also be taken note of as it determines that in every matter in which the interests of a child are at stake an approach which is conducive to conciliation and problem-solving is advocated and a confrontational approach and delays in any action or decision should be avoided as far as possible.

In the case of Van den Berg v Le Roux the court ordered the parties to undergo mediation for all future custody disputes with regard to their 10-year-old daughter and only after completion of the mediation process could either of the parties approach a court for a ruling. In Townsend-Turner and another v Morrow the parties were ordered to attend mediation for a period of three months or at least four sessions in an effort to resolve the issue of access between the father of a 7-year-old boy and the boy’s maternal grandmother.

In essence if a person fails to consider mediation in cases where such is appropriate and required, he/she does so to his or her own detriment and may find that the court orders such a process to be followed before considering any application for divorce.

One of the most important aspects of divorce mediation to consider is the fact that the spouses reach their own mutually satisfying decision based on the guidance and facilitation of an impartial and neutral third party. Mediation is confidential and recognises the rights of all the family members. The process is also flexible which allows it to be adapted to each unique situation and the different needs of the spouses.

The success of divorce mediation lies in the hands of the spouses and not the mediator. If the spouses are willing to work together in order to achieve a settlement, mediation can be successful, if they choose not to cooperate they will have to enter into contested divorce litigation which may be a very costly and unpleasant exercise. If one of the spouses is uncertain as to whether he/she wishes to get divorced mediation can also be terminated with the spouses being encouraged to seek professional help and counselling in an effort to save their marriage.

Attorneys may be present in the mediation process and the spouses are free to consult with their attorneys during mediation, but it is preferable that the attorneys not be allowed to be present during the actual mediation sessions to allow the parties the freedom to arrive at a settlement. Where the mediator is an attorney it is important to note that he/she should not also act as the legal representative of one of the spouses but should act impartially.

Mediators have to complete accredited mediation training with a recognised organisation, of which some of the most recognised organisations are the South African Association of Mediators in Divorce and Family Matters based in Gauteng (SAAM) and the Family Mediators Association of the Cape based in the Western Cape (FAMAC). These organisations can be contacted to find an accredited mediator in your area. Using an accredited mediator would mean that the mediator will be bound by the rules of the organisation he or she is a member of, as well as being bound by its code of conduct and disciplinary procedures. These mediators are also required to maintain their mediation skills by attending on going in-service training.

Mediation in respect of divorce proceedings is certainly growing in importance and is being supported by our courts as an important step in divorce proceedings and should be considered as a viable option by spouses contemplating divorce.

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Financial distress: your obligation to inform the public

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The Companies Act has provided companies (and closed corporations) the opportunity to save their business and avoid liquidation by implementing business rescue proceedings. These are proceedings aimed at facilitating the rehabilitation of a company that is in financial distress. In other words, where a company appears to be in a position that it is reasonably unlikely that it will be able to repay its debts as they become due and payable within the next six months or it is reasonably likely that the company will become insolvent within the next six months, the company is a likely candidate for undertaking business rescue proceedings.

Although the business rescue procedure is a positive procedure aimed at resolving disputes between businesses, the negative connotation attached to a company being under business rescue, has the effect that many companies would do anything to avoid it. Sometimes a company’s refusal to consider business rescue proceedings, however leads to a situation where the company is in too much financial trouble for it to be rescued, and a sometimes preventable situation of liquidation then becomes reality.

The Companies Act accordingly makes provision for exactly such situations. The Act determines that if the company has reasonable grounds to believe that it is financially distressed and there appears to be a reasonable prospect of rescuing the company, it must consider business rescue proceedings, and if it for any reason whatsoever it decides not to commence with business rescue proceedings, it must inform all affected parties (shareholders, employees and creditors) that the company is financially distressed and provide reasons for its decision. If the directors of a company do not consider business rescue proceedings or do not inform all necessary parties of the company’s decision not to commence such proceedings, it may be determined that the directors operated the company in a reckless and negligent manner and the directors could be held personally liable.

It is therefore important that the directors of a company take the required steps in order to ensure that their actions are not deemed to be reckless and negligent. The following steps can be used as a guideline:

Step 1 – Keep track of your financial obligations and cash flow

A company is financially distressed if it is likely that it will not be able to pay its creditors on its due date within the following 6 months or it is likely that the company will become insolvent within the next six months. Although a company may believe that it is currently not under financial pressure, if there are reasonable grounds to believe that the company won’t be able to pay all its debts within the following 6 months or the company will become insolvent within the next six months, the company must consider business rescue. A company must therefore at all times keep track of its financial position in order to be in the best possible position to make a prediction as to the payment of its debts in order to prevent directors’ liability.

Step 2 – Consider business rescue

Business rescue is a positive procedure aimed at assisting parties to reach an agreement on the repayment of a company’s debts, which could benefit all affected parties. Business rescue should therefore be considered with an open mind and should the company wish not to commence business rescue, it must be able to provide a reasonable explanation for its decision. It is suggested that a company discuss the procedure with an expert in the area, to make an informed decision on whether or not to commence with business rescue and support its decision with reasons.

Step 3 – Inform affected persons

Should a financially distressed company not commence business rescue proceedings, the board of the company must notify all affected persons within five days of considering the matter. The company must complete the official form provided by the CIPC and attach a statement confirming the relevant criteria of the company’s financial distress, as well as reasonable reasons for not commencing business rescue. The reasons for its decision should confirm that its decision is to the benefit of all affected persons. These documents must be sent to all affected persons, which include the shareholders, employees and creditors of the company.

The intent of business rescue proceedings is not merely to afford a company respite from action by creditors, but to provide a beneficial solution for all parties that have an interest in the future success of the business. Following the above steps might just be the way to rescue your business and protect your interests in that which you have built up.

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Ignoring that speeding fine? Your one stop ticket to trouble

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If you are caught driving at a speed that exceeds the speed limit by 30km/h or more in an urban area, the option of a fine is no longer applicable and you will be issued with a notice to appear in court. But what does this mean?

Many people are unfamiliar with the court process. Upon your first appearance, the option of conducting your own defence, appointing an attorney of choice or applying to legal aid is given to you. Unless you have legal experience, it is not advisable to conduct your own defence, rather seek legal advice. Many people just want the ordeal to go away, and will plead guilty to expedite the matter, totally unaware of the fact that they have just secured themselves a criminal record and the possibility of having their driver’s licence suspended.

Others have ignored the notices to appear in court, hoping the matter will not be pursued, unaware of the fact that a warrant of arrest has been issued by the relevant court against them. While in an ideal system warrants of arrest are executed by the police who have your home or work address which make it a lot easier to execute your arrest, more often than not these warrants go unexecuted for long periods of time and end up being executed quite unforeseen at roadblocks and at border posts, usually at the most inconvenient of times.

It is during this time that you will probably meet a policeman who is executing a warrant of arrest against you, realise that this policeman does not care for explanations regarding what crime the warrant has been issued for, and merely cares about the fact that you are a criminal that needs to be arrested and detained in custody and taken to court to face the consequences of your failure to obey the law.

Often traffic fines are not issued on the spot and arrive some time later by post demanding payment for the joy ride you thought you had gotten away with. What is the status of these fines?

It will all depend on whether or not the joy ride took place in the operational areas of the Johannesburg or Tshwana Metro Police departments or whether it took place anywhere else in the Republic of South Africa.

The Administration Adjudication of Road Traffic Offences also known as AARTO is currently in the process of been phased in by the Department of Transport. It has already been partially implemented in the operational areas of the Johannesburg and Tshwana Metro Police departments, but the system is not applicable across the country yet.

Traffic fines under AARTO:

  • You will be sent what is known as an AARTO 03 infringement notice (camera fines) which must be delivered to you by registered mail only;
  • During the first 32 days from the date of service, you will receive a 50% discount, if you pay the fine immediately, but if you don’t then you will lose the discount and have to pay a further R60 for a letter which will give you another 30 days to pay your fine;
  • If you do then that will be the end of it, failing which an Enforcement Order will be issued against you;
  • This so called Enforcement Order will cost you an additional R60, and will block all licensing transactions on eNatis;
  • This means that you will not be able to register a new vehicle, renew your licence disc for any vehicle you own, and you will not be able to renew your driving license or apply for a new class of licence until such time as the Enforcement Order has been cancelled, which can only happen if you have paid your outstanding fine or you have made successful application to have it revoked;
  • AARTO also makes provision for a warrant of execution to be issued which allows the Sheriff to come and take your belongings in order to sell them, the money for which will then be used to pay your outstanding fines.
  • A positive point about the AARTO process is that there is no provision for a warrant of arrest.
  • You can always make representations or elect to be tried in court.

In the event of your joy ride taking place anywhere else in South Africa you will receive an old school traffic fine under the Criminal Procedure Act:

  • You will receive what is known as a “first notice of offence” under section 341 of the Criminal Procedure Act and which may be sent to you by ordinary mail;
  • At this point you can admit guilt and pay the fine immediately;
  • You will always have the option to make representations in the form of a letter to the relevant traffic authorities prior to the fine payment expiry date;
  • Or you could just wait for a section 54 summons to be issued and served on you.
  • On receiving a section 56 issue (issued by a traffic officer at the time of the offence) or a section 54 summons (issued with respect to a camera and offences where you are not served at the time), you have the following options available to you:
  • You can admit guilt and pay the fine immediately;
  • You can make representations to the senior public prosecutor, who has the authority to withdraw the matter against you;
  • You can appear in a court of law and take your chances in defending the matter; or
  • You can ignore the summons, fail to appear in court and get arrested on a warrant of arrest.

As you can see ignoring your speeding fine could have severe consequences and could result in you spending a weekend in jail or not being able to register that brand new sports car you have your eye one. Accordingly, it is advisable that you consult your attorney for assistance when receiving a speeding fine or if you are currently in a position where you have ignored your speeding fine for some time already.

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New beach house: In my name or the family trust?

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Each buyer’s situation is different, so there is no one correct answer to this question. The entity in which a buyer should buy his property will depend on his personal financial circumstances and the reasons why he wants to buy the property. In order to make an informed decision, the advantages and disadvantages of Adrian’s options must be considered.

Purchase in personal capacity

If Adrian purchases his holiday home in his personal name, the following principles will apply:

  • No transfer duty is payable on the first R600 000.00 of the purchase price.
    • From R600 001.00 to R1 000 000.00 transfer duty at a rate of 3% of the amount above R600 000 will be charged.
    • From R1 000 001.00 to R1 500 000.00 transfer duty of R12 000 plus 5% of the amount above R1 000 000.00 will be charged.
    • From R1 500 0001.00 transfer duty at R37 000.00 plus 8% of the amount above R1 500 000.00 will be charged.
  • In the case of property purchased primarily as a primary residence, the first R2 million of the capital gain on the sale is disregarded for purposes of capital gains tax.
  • If the property is not purchased primarily for residential purposes the sale will have capital gains tax consequences. R30 000.00 of the total capital gain will be disregarded. After that, 33.33% of the capital gains derived from the alienation of the property will be included in a seller’s annual taxable income.
  • At the owner’s death the holiday home will form part of his estate for estate tax duty purposes. A deduction of R3.5 million against all assets in the estate is allowed with the balance of the estate taxed at 20%.
  • Capital gains tax will also be relevant at the owner’s death, regardless of whether the beach house is sold or not. The fair market value of the property at the date of the owner’s death will be determined and consequently, the growth in the value of the property in his estate will be taxed. If the property is bequeathed to the owner’s surviving spouse, no capital gains tax will be payable. If however the surviving spouse dies or the property is sold, the capital gain on the disposal will be calculated from the date the property was bought.
  • The property will continue to be susceptible to seizure by creditors if the owner of the property becomes insolvent.
  • If the owner dies, his will determines to whom the beach house must be bequeathed. However, complications may arise where more than one heir stands to inherit the beach house. Questions such as who is entitled to use it, who is responsible for the maintenance thereof and who is entitled to the income earned thereon, are often questions that arise when property is owned by more than one owner.

Purchase in family trust

If Adrian however purchases the beach house in the name of his family trust, the following principles will apply:

  • Transfer duty was calculated in the past at a fixed rate of 8% from the first Rand. However, since 23 February 2011 trusts pay transfer duty at the same scale and with the same exemptions as natural persons.
  • Capital gains tax can be calculated in two ways. First, the capital gains can be taxed in the hands of the trust, in which case 66.6% of the profit is included in the trust’s taxable income and taxed at 40%, which results in an effective capital gains tax rate of 26.7%. Secondly, the capital gains can be distributed to the beneficiaries, in which case the capital gains will be taxed at the respective income tax levels of the beneficiaries. Individuals pay income tax at a rate ranging between 18% and 40% and accordingly capital gains tax at a maximum rate of 13.3% will apply.
  • Income earned by the trust will, as in the above case, be taxed in the hands of the trust, or it can be distributed to the beneficiaries in order to be part of the gross taxable income of the various beneficiaries.
  • Income tax and capital gains tax can therefore be reduced by distributing the income and the capital gains of the trust among major beneficiaries with lower income tax levels.
  • No donation tax is payable if the capital gains made on the disposal of the beach house is distributed to beneficiaries.
  • The beach house will not form part of an owner’s estate for tax purposes, and accordingly the trust plays an important role in estate planning.
  • Since the beach house is not part of the owner’s estate, no capital gains tax is payable upon his death.
  • The complications that arise when the beach house is owned by more than one owner can be largely eliminated as the trust remains the owner of the beach house, even after the owner dies.
  • The trust is a separate legal entity and the trust assets are accordingly protected from seizure by creditors.
  • Should financing be required to purchase the beach house, the trustee can apply for financing and the rent the property to Adrian and/or others in order to service the instalments.

It is clear from the above explanation that the objectives of the buyer must be taken into account in order to identify the most appropriate entity in which he can buy his new property. The buyer must therefore ask himself the following questions to determine his position:

  • What do I want to do with the property? Do I buy it for a short term period, or do I keep it as a long term investment?
  • How do I finance the property? Will it be a rental property? How do I structure this?
  • Will I restore and renovate the property in order to sell it again at a profit, or do I buy the property with the intention of bequeathing it to my children one day?
  • Do I wish to protect my assets from creditors?
  • Will the property be my primary residence?

Considering Adrian’s circumstances and objectives, a trust will be an appropriate entity in which to purchase his beach house, especially because he sees it as a long term investment. Adrian will in this case enjoy protection from creditors and not pay estate duty. He can also nominate his sons as capital beneficiaries in the trust to ensure that the beach house is inherited by his sons. His wife can be nominated as an income beneficiary in his trust to earn the rental paid on the property.

Finally, the Minister of Finance’s budget speech for 2013 must be kept in mind. It appears that the flow of income and capital gains through trusts to beneficiaries may come under fire in future. All income not actually distributed to beneficiaries may be at risk of being taxed in the trust. Income that is distributed to beneficiaries will then probably be allowed as a deduction for the trust and taxed as ordinary income in the hands of the beneficiaries.

Yet at this stage the proposed amendments of our tax laws is still only a possibility about which there currently is only speculation. In the meantime it would be advisable to seek professional help in order to assist you in analyzing your financial situation, circumstances and choice of the most appropriate entity in which to buy your property.

The following conclusion can be made: Due to the fact that the first R2 million capital gains made on the sale of your primary residence is exempt from capital gains tax, it may from a tax perspective be preferable to buy your primary residence in your personal capacity. However if your concern is about protection against risk, then a trust that is properly managed is an important option for consideration. If you are buying a second home and your estate is worth more than R3.5 million, you may wish for both tax and protection purposes, to consider purchasing the property in a trust. Most importantly: seek advice as to what is appropriate to your specific circumstances.

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Can you recover losses from a dismissed employee?

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The dismissed employee however benefits from this pragmatic view and if there are criminal proceedings instituted against the employee the attitude adopted by the employer is normally lax, often because criminal proceedings take time to be finalized without any guarantee as to whether the dismissed employee will be found guilty or not.

The Labour Court recently ruled on the situation when it confirmed an employer’s counterclaim for breach of contract against two former senior employees and ordered the employees to pay their erstwhile employer R8 million in damages for losses suffered as a result of their misconduct.

In the case, two employees were charged with and found guilty of misconduct by an independent chairperson of an internal disciplinary hearing and dismissed after the chairperson found that their misconduct caused R7.8 million losses to their employer. Both dismissed employees challenged their dismissals at the CCMA and the Director of the CCMA transferred their referrals to the Labour Court.

The employer then instituted a counterclaim for damages against the employees in terms of the Basic Conditions of Employment Act. The employer claimed damages against both dismissed employees on the basis that the fraud committed by them resulted in damages suffered as a result of the failure of the employees to honestly and faithfully serve the employer and their failure to exercise due and reasonable diligence as was required by their contracts of service.

In the evidence presented, it was clear that the employees had actively participated in fraud against the employer in return for bribes which resulted in a loss to the employer in the amount of R8 million.

The court further held that both dismissed employees not only had the express duty to maintain the highest level of ethics and transparency but, as senior employees, they had a fiduciary duty to ensure total honesty and integrity when goods and services were procured.

In the end the Labour Court accepted that the employer had established that both former employees caused the losses and that there was a causal link between the breach and the damages suffered by the employer. The employee’s dismissal was held to be fair and the dismissed employees were held liable for the amount of R8 million and criminal charges were also laid against both employees by the employer.

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Grondeise: Wat elke koper moet weet

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Die kooptransaksie om die betrokke stuk grond te bekom, moet by wyse van ‘n koopooreenkoms aangegaan word om sodoende geldig en afdwingbaar te wees. Hierdie ooreenkoms sal die basis van die kooptransaksie wees en sal gevolglik as die belangrikste dokument dien waarvan die inhoud noukeurig nagegaan moet word. Weens die belangrikheid van die koopooreenkoms word dit ten sterkste aanbeveel dat ‘n prokureur sodanige dokument opstel.

‘n Klousule van uiterse belang in die koopooreenkoms is die “waarborge en vrywarings” klousule waarin die verkoper sekere inligting aan jou (die koper) in goeie trou openbaar ten einde jou gerus te stel dat die koop nie ‘n skyntransaksie uitmaak of tot die verkoper se eensydige voordeel aangegaan word nie. Dit is belangrik dat die verkoper die volgende waarborge rondom veral grondeise skriftelik, hetsy vrywilliglik of op aanvraag, aan jou voorsien ten einde die nodige sekerheid te verkry dat die koop in goeie trou geskied:

  1. Dat geen gedeelte van die eiendom onteien is nie.
  2. Dat geen eis vir die herstel van enige grondreg, ten opsigte van die eiendom, insluitende dié van huurarbeiders, bywoners, gemeenregtelike belanghebbendes, trust begunstigdes of voordelige okkupeerders, ingestel is nie.
  3. Dat die streekgrondeisekommissaris geen kennisgewing ten opsigte van sodanige grondeis ingevolge die Wet op Herstel van Grondregte 22 van 1994 gepubliseer het nie.

Verder kan vrywarings wat betrekking het op moontlike regte deur huurarbeiders, plaaswerkers, okkupeerders en ander informele regte op die grond ook ingebring word om beskerming te verleen rondom ander aspekte wat die gebruik van die grond mag affekteeer.

Die waarborg wat handel met die streekgrondeisekommissaris is die kern kwelpunt waarvan min voornemende, dikwels gesoute boere, of grondeienaars bewus is. Meeste mense is onder die indruk dat sodra ‘n grondeis ingestel word teen ‘n betrokke eiendom, die eiendom nie verder ontwikkel óf verkoop kan word nie, wat in beginsel korrek is. Waarvan hul egter nie bewus is nie, is dat sodanige verkoop of ontwikkelling van die eiendom wél kan geskied indien die nodige skriftelike kennisgewing aan die streekgrondeisekommissaris gegee word een maand voordat sodanige voorneme verwesenlik word. Na sodanige kennisgewing aan die streekgrondeisekommissaris gegee is kan die verkoper voortgaan om die eiendom wettiglik te verkoop terwyl die koper onbewus kan wees van die feit dat eiendom gekoop word waarteen ‘n grondeis ingestel is, veral as die bogemelde klousules ontbreek in die koopooreenkoms.

Gevolglik is dit van kardinale belang dat jy as koper die nodige voorsorg tref om te verseker dat voldoende waarborge deur die verkoper gegee word in terme van die koopooreenkoms om sodoende die spyt en jare lange opskorting van ontwikkelling opsy te skuif en te verseker dat die uitbreiding van jou plaas en nalatenskap die aanwins is wat dit behoort te wees.

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POPI: Are you all set?

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POPI will have as its main aim the protection of personal information. It has been stated that POPI has been designed to protect personal information given the fact that in today’s digital age there are serious implications in how this type of information is handled. Should an organisation or “responsible party” as named by POPI, request your personal information, they can only capture and use it with your consent. Organisations will further have to ensure that it is kept up to date and that they have put in place, reasonable security measures which are in line with industry standards. This in itself can be quite a tall order for many organisations that handle personal information of their clients.

As soon as POPI is signed into law all public and private organisations that process personal information will have a transition period of one year to address their compliance. The onus rests on the organisation to comply and compliance failure cannot only bring about reputational damage but can also lead to fines of up to R10 million or imprisonment of up to 10 years.

POPI restricts how personal information can be collected and used and to this end sets out eight principles of compliance for organisations:

1. Accountability

All responsible parties which range from the man on the street to corporate giants must adhere to all of POPI’s principles.

2. Processing limitation

Lawfulness is key. The method of information collection must be lawful and not infringe on one’s right to privacy. Processing must be adequate, relevant, not excessive, relative to the purpose for which the processing was undertaken and only done with the consent of the individual (barring a few exceptions). Personal information must always be collected directly from the data subject, unless the POPI provides otherwise.

3. Purpose specification

Collection of personal information must be for a specific, explicitly defined and lawful purpose of which the individual must be aware. The purpose for which your information is going to be used must be explicitly stated and only kept until the desired result for which it was collected has been achieved.

4. Further processing limitation

Further processing of the information must be in accordance or compatible with the purpose for which it was originally collected.

5. Information quality

The organisation must take all reasonable steps to safeguard personal information while making sure it is accurate, complete, not misleading and updated whenever it so demands. When taking these steps, regard must be had as to the purpose for which the information was gathered or would be used for further processing.

6. Openness

The responsible party must at all times disclose to the individual all reasons behind the collection of their personal information. This includes for example the source, application and the individual’s rights in respect of such information and who will have access to the information.

7. Security safeguards

A responsible party must secure the integrity and confidentiality of personal information in its possession or under its control by taking appropriate, reasonable technical and organisational measures to prevent loss of, damage to or unlawful access to personal information.

8. Data subject participation

An individual can at any time, free of charge request from an organisation whether they hold any of their private information. Upon provision thereof, the individual may demand correction or deletion of information that is inaccurate, out of date, misleading or that was obtained illegally.

Organisations need to take note of these principles and assess to what extent these principles will apply to them. Proactively obtain help to assess the compliance of your business and start putting measures in place to ensure your compliance with POPI as compliance will not be an overnight exercise and will require planning and understanding on your part.

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Debt Review: Manoeuvring through the thorns

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In terms of Section 86 of the Act, an over-indebted individual may apply to be placed under Debt Review with Debt Review offering the following remedies:

  • Credit providers are unable to take legal steps against the consumer while under Debt Review.
  • Re-arrangements can be made regarding the manner in which payments must be made by the consumer and distributed amongst the affected credit providers.The consumer’s obligations can be re-arranged by extending the period of the agreement and reducing the amount of each payment due.
  • The Debt Counsellor may apply for certain credit agreements to be set aside or altered on the basis that they were recklessly provided.

Considering the current economic situation, Debt Review appears a marvellous idea, and in theory, one can obtain leeway in dealing with an intimidating amount of debt. However, it can also be an unopened parachute if one fails to pay attention to the detail and take the correct steps, leaving you dangling upside down in a thorn tree.

Many consumers fail to recognize that Debt Counselling is not a charitable service. There are specific fees which are applicable, and though they may seem insignificant, they can all add up. Failure to actively participate in one’s rehabilitation, research the options or consequences of certain decisions, make responsible changes to one’s lifestyle, or abide by the restructured agreement, can result in a substantial increase in your debt obligations. Accordingly, it is crucial that before starting a Debt Review process, you as consumer do the following:

  • Research debt counselling – read about it on the internet, ask Debt Counsellors questions, speak to acquaintances who have applied for Debt Review and in general acquaint yourself with the debt review process.
  • Change your lifestyle – shop at cheaper stores, cut down on luxuries such as satellite tv, alcohol, entertaining, and if necessary, even downgrade your vehicle or residence.
  • Ensure that your Debt Counsellor is registered with the National Credit Regulator.
  • Disclose all debt that you have to the Debt Counsellor, and ensure that you abide with the restructured payments and obligations placed on you. Failing to do so may result in a credit provider applying for the cancellation of your Debt Review.

In addition to the abovementioned, it is imperative that one knows and understands the effect of the fees that you will have to pay in terms of the Debt Review process. The fees are fixed in terms of the law, and if your Debt Counsellor is charging in excess of the set fees, one can report them to the National Credit Regulator or Credit Ombud, whose contact details are easily available online. The standard fees as of 2011, until such date as they are altered are the following:

  • Application fee is R50
  • Rejection fee is R300
  • Restructuring fee is capped at R3000 for a single application, and a maximum of R6000 for a joint application.
  • A monthly “care fee” is 5% on one’s monthly instalment for the first 24 months, and 3% thereafter, but capped at R400 per month.
  • A legal fee of R750 for the consent order which needs to be obtained in the Magistrates’ Court.
  • Should one withdraw from Debt Review after the restructuring process has begun, one is responsible for 75% of the restructuring fee.
  • And finally, the element that is often overlooked – is interest on these fees.

It is important to understand that applying for Debt Review is not in itself a total solution for your debt problems. It also asks of you to take responsibility in rehabilitating yourself, understanding the process and participating therein. A casual and irresponsible attitude may result in your debt increasing rather than decreasing and as reduced payments means the payment of debt over a longer period, a committed attitude for the long haul is essential to making the process work.

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The Amended BEE Codes of Good Practice

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These new Codes have introduced a number of significant points which we have listed below:

1. The new Codes have a 12 month transitional period starting 11 October 2013 in which businesses have a choice to report under either the old Codes or the new Codes. Once this period is over, reporting under the new Codes will become mandatory.

2. The new Codes do not, however, replace the sector charters and these will still remain in force.

3. The number of points necessary to qualify for a particular level is adjusted as set out in the table below, requiring substantially higher points to achieve a good BEE level than under the old Codes:

B-BBEE Status Qualification under
the new Codes		 Qualification under
the old Codes		 B-BBEE
recognition level
Level 1 ≥ 100 Points ≥ 100 Points 135%
Level 2 ≥ 95 but < 100 Points ≥ 85 but < 100 Points 125%
Level 3 ≥ 90 but < 95 Points ≥ 75 but < 85 Points 110%
Level 4 ≥ 80 but < 90 Points ≥ 65 but < 75 Points 100%
Level 5 ≥ 75 but < 80 Points ≥ 55 but < 65 Points 80%
Level 6 ≥ 70 but < 75 Points ≥ 45 but < 55 Points 60%
Level 7 ≥ 55 but < 70 Points ≥ 40 but < 45 Points 50%
Level 8 ≥ 40 but < 55 Points ≥ 30 but < 40 Points 10%
Non-Compliant < 40 Points < 30 Points 0%

 

4. The thresholds for different level of scorecard compliance, have also been adjusted as follows:

  • EMEs require a turnover of less than R10 million
  • QSEs require a turnover of between R10 million and R50 million
  • Generic Entities require a turnover of more than R50 million

5. The previous 7 elements have been reduced to only 5 elements with Procurement now forming part of Enterprise and Supplier Development and Employment Equity being integrated to form part of Management.

6. EMEs and QSEs which have 100% Black ownership will automatically qualify as Level 1 contributors and EMEs and QSEs which have 51% or more Black ownership will automatically qualify as Level 2 contributors. Importantly, these entities will only have to provide an affidavit confirming that their turnover is under the relevant threshold and the percentage of Black ownership is above the required level.

7. EMEs with Black ownership of less than 51% will automatically qualify as Level 4 contributors while QSEs with less than 51% Black ownership will have to report under all 5 of the elements.

8. 3 Priority Elements have been introduced, namely Ownership, Enterprise and Supplier Development and Skills Development.

9. QSEs will have to meet a subminimum of 40% of the target for Ownership and one of the other Priority Elements or they will lose a level, while Generic Entities will have to meet the subminimum for all three Priority Elements or risk losing a level.

10. The target for Skills Development has been increased to 6% of the Leviable Amount, meaning that businesses will have to spend 2.4% just to meet the subminimum of 40%.

The changes mentioned above are only a few of the many changes which will be brought about by the new Codes and as always the devil is in the detail, and there is a lot of detail which will have to be assimilated to understand the full extent of the impact of the new Codes. These will have a major effect on current BEE scores, with the Ownership element becoming vitally essential for businesses if they want to get a certificate better than a Level 8 or even avoid non-compliance.

There are numerous errors and uncertainties in the new Codes and it will take time before these are corrected or clarified. Until we reach this point it can only be speculated as to how the Codes will practically be interpreted and implemented by verification agencies. Most importantly, take note of the new Codes and start preparing your business to comply as the new Codes will definitely affect your current BEE strategy.

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