Why Employees Receive Garnishee Orders
Employees may become subject to a garnishee order for various reasons. The most common include unpaid loans, court judgments, or child maintenance orders. Often, these result from unforeseen personal or financial hardships rather than deliberate neglect. In a high-profile investigation, it was found that some South African employees had up to 12 garnishee orders against them, effectively leaving them with no net income at month-end. While concerning, these cases highlight the systemic nature of financial distress and why dismissing an employee for this reason alone may be short-sighted.
Employer Responsibilities When Served
In South Africa, once a garnishee order is lawfully issued, the employer is legally obligated to comply. This includes:
- Implementing salary deductions as directed by the order
- Ensuring that the total deductions do not exceed 25% of the employee’s earnings, as prescribed by the Basic Conditions of Employment Act
- Providing written notification to the employee regarding the deductions
- Continuing compliance even if the employee changes departments, shifts, or locations—unless employment is terminated
Failure to comply can lead to legal consequences for the employer. It’s critical for payroll teams and HR departments to stay up to date with applicable legal processes and ensure prompt implementation.
Can You Legally Dismiss an Employee?
Simply put, no—employers in South Africa cannot legally terminate an employee solely because they are subject to a garnishee order. The Labour Relations Act is clear that all dismissals must be substantively and procedurally fair. Financial hardship, by itself, does not constitute misconduct, incapacity, or operational requirement— the three valid grounds for termination.
Dismissal in such cases may even be considered automatically unfair if it relates to arbitrary grounds like personal debt, which is often protected under anti-discrimination provisions. Employers must tread carefully or risk costly litigation and reputational damage.
When a Garnishee Order Might Signal Deeper Concerns
While a single garnishee order should not raise alarms, multiple or recurring orders could suggest broader issues, particularly in finance-sensitive roles. For example, employees handling cash, procurement, or strategic accounts may expose the business to risk if they are under severe financial pressure. In these cases, employers must assess the situation holistically.
Instead of focusing solely on the order itself, consider performance trends, disciplinary records, and role-specific vulnerabilities.
Ethical Considerations: Supporting Employees in Crisis
Dismissing an employee due to a garnishee order, especially when they are already experiencing financial hardship, may appear punitive and lack empathy. It sends a message that the organisation does not value employee well-being.
The better approach is to foster a culture that supports financial resilience. This can include:
- Encouraging employees to disclose financial issues early, without fear of judgment
- Offering flexible financial wellness programmes or workshops
- Providing access to reputable debt counselling services
- Educating staff on the long-term consequences of taking on unsecured debt
Alternatives to Disciplinary Action
Instead of punitive measures, employers can take proactive steps to help employees regain control of their finances. These include:
- Referrals to licensed debt counselling services such as those provided by DCM Corporate
- Adjusting duties temporarily to reduce financial risk exposure in sensitive roles
- Offering Employee Assistance Programmes (EAPs) that include financial guidance
Such support not only improves employee morale and loyalty but also reduces absenteeism and improves workplace productivity.
Union and Bargaining Council Perspectives
South Africa’s labour environment is highly regulated, with unions and bargaining councils playing an active role in protecting workers’ rights.
They also push for holistic approaches to employee financial wellness, highlighting the need for structured employer responses that protect the dignity of affected staff.
Best Practices for Employers
To manage these orders fairly and effectively, South African employers should:
- Create internal policies that outline clear procedures when a garnishee order is received
- Train HR teams to handle these orders sensitively and in compliance with labour law
- Partner with credible debt solution providers such as DCM Corporate to offer ongoing support
- Monitor staff workloads and stress levels, especially among those known to be under financial pressure
These actions demonstrate corporate responsibility and contribute to a more stable and trustworthy workplace culture.
Conclusion
A garnishee order should never be grounds for automatic dismissal. While it may raise legitimate concerns in certain high-trust roles, it is not, in and of itself, an indicator of professional incompetence or misconduct. South African employers are encouraged to act within the law and with humanity—recognising that financial struggles are often temporary and solvable with the right support.
At DCM Corporate, we help employers navigate the complex territory of garnishee orders through expert debt counselling and employee support services. If you’re looking to better support your workforce while remaining compliant with employment law, contact us today.