Apr 30, 2021 | Article
An assistant butchery manager at processed meat manufacturer, who went to work after testing positive for Covid-19 and even hugged a colleague who suffered from comorbidities – was dismissed fairly, The Star reports according to the Labour Court following a dismissal dispute.
The case concerned the fairness of the dismissal of an employee on account of gross misconduct and related negligence, related to his failure to observe Covid-19-related health and safety protocols put in place at the workplace.
The Judge remarked: ‘The facts of this case are indeed extraordinary. They are indicative of the need for more to be done at both the workplace and in communities, in ensuring that employers, employees, and the general populace are sensitised to the realities of this pandemic, and to further reinforce the obligations of employers and employees in the face of an exposure to Covid-19.’
The man was found guilty of gross misconduct by his employer as he did not tell them he took a Covid-19 test and was waiting for his results. He was also convicted and fired because after testing positive, he continued working and placed the lives of his colleagues at risk.
Source: LegalBrief
Apr 23, 2021 | Article
Wilkinson and Another v Crawford N.O. and Others [2021] ZACC 8
The facts of this matter were summarised in our previous reports about the judgements of the Cape High Court (WCHC) and the Supreme Court of Appeals (SCA). In short in 1953 a testator bequeathed part of his estate to a trust. The capital beneficiaries of the trust were to be his grandchildren. It was common cause in the Constitutional Court (CC) that he intended not to include adopted grandchildren. After his death his daughter adopted two children. Upon her death as the longest survivor of his children the trust was to be terminated. Before her death the daughter started the proceedings in the Cape High Court to attack the terms of the trust on the basis that they were discriminating unfairly on a ground prohibited by section 9 of the Constitution.
In an appeal to the CC against refusal by the WCHC and the SCA to order that the adopted children be regarded as descendants of the testator, the appellants argued that the terms of the trust were open to an interpretation that adopted children were to be included as capital beneficiaries, alternatively that exclusion of the adopted children amounts to unfair discrimination on a section 9 prohibited ground (birth).
The majority of the CC (Mhlantla J, with Khampepe J, Madlanga J, Theron J and Victor AJ concurring) ruled that although adoption is not specifically listed in section 9 it is analogous to birth, which is a prohibited ground of unfair discrimination in section 9.
In a first dissenting judgement Majiedt J disagreed and held that adoption cannot be equated to birth. The infringement on the testator’s right to bequeath as he pleases as an expression of his right to privacy, dignity and property is also unjustified.
In a second dissenting judgement Jafta J (Mogoeng CJ concurring) held that the relevant clause (6) of the trust deed, if construed correctly, already covered the adopted children and qualified them as capital beneficiaries.
The result of the majority judgement is that the adopted children will each receive one quarter of the trust capital.
Source: FISA
Mar 16, 2021 | Article
- The new national minimum wage is R21.69 per hour, an increase of 4.5%.
- Farm workers’ minimum wage is now equal to the national minimum wage for the first time.
- The minimum wage for domestic workers is still below the national wage, but has been hiked by 23% this year – and should be on par by 2022.
The government has gazetted the new national minimum wage: R21.69 per hour. This is an increase of 4.5% from last year.
Last year, the National Minimum Wage Commission recommended that the minimum wage be increased by inflation (currently around 3%) plus 1.5%.
It noted that inflation for poorer households is currently significantly higher than for higher-income earners, due to the relatively sharp increase in food prices. Because the households of minimum-wage earners spend more of their income on food, this hurts them more than higher earners.
Also, the minimum wage is still below the upper-bound poverty line (of R1,268 per person per month).
Domestic workers
The minimum wages of domestic workers increased from R15.57 per hour to R19.09, a hike of almost 23%. The commission wants the minimum wage for domestic workers – who still, even after the latest increase, earn 12% less than other minimum wage workers – to be exactly the same as the national wage by next year.
Apart from house cleaning work, domestic workers also include gardeners, drivers and people who look after children, the aged, sick, frail or disabled in a private household (but not on a farm).
Farm workers
From this year, the minimum wage for farm workers is now equal to the national minimum wage, after earning 10% less in the past year. This is thanks to a 16% bump of R18.68 to R21.69 this year.
In a note, the employment law service Labourwise reminded employers that the national minimum wage excludes allowances that are paid to enable employees to work (such as transport and equipment), or payment in kind (such as board or accommodation), as well as bonuses, tips or food.
“So, for example, one cannot argue that you pay an employee less than the minimum wage because you contribute to their uniform or provide them with meals.”
Source: Business Insider
Mar 15, 2021 | Article
This is a useful article by Phia van der Spuy setting out a simple explanation of beneficiaries rights trusts.
Many trustees believe that beneficiaries have no rights, especially if they are contingent beneficiaries in a discretionary trust.
Personal right against trustees for compliance with their duties
In the Gross v Pentz case of 1996 it was made clear that although contingent beneficiaries have no vested rights in the trust property, such beneficiaries still have vested interests in the proper administration of the trust. Such a right is termed a personal right of action against trustees for the performance of an obligation. In other words, the trustees must either do or refrain from doing something. A personal right is a legal right against another person (a right in personam), usually created through a contract. It ensures that the trustees perform their duties in accordance with the trust instrument. This places a huge burden on trustees, as they can be held personally liable if they do not perform their duties as prescribed by law.
Personal right in trust income or capital as stipulated in trust instrument (vesting trust)
A personal right is acquired by a beneficiary who has a vested right – a right to claim income or capital from the trustees in terms of the provisions of the trust instrument, but subject to rights attached to such vested right. It is said that such a beneficiary has a right in the assets of the trust and may be labelled an income beneficiary and/or capital beneficiary. Such a trust is also labelled an ownership trust since the trustees remain the non-beneficial owners of the trust assets, even though they will have no discretion in terms of which beneficiaries (with such vested rights) should receive distributions. A beneficiary with a vested right will have a personal right of action against the trustees to ensure that the trustees perform their duties in accordance with the trust instrument and a personal right against the trustees to claim transfer of trust income or capital, depending on what rights the vested right confers. In some trusts, beneficiaries may have a combination of rights, such as vested rights to trust income and/or capital and discretionary rights to trust capital. Any vested rights will be exposed to creditors, but subject to the terms of the trust instrument – i.e. creditors will never obtain more favourable rights than the beneficiary. These vested rights will be included in the estate of the deceased beneficiary and attract Estate Duty.
Personal right in trust capital, income and capital gains as vested by trustees in discretionary beneficiary
A beneficiary of a discretionary trust (which is an ownership trust since the trustees remain the non-beneficial owners of the trust assets) only has a discretionary or contingent right (a hope to receive something) until the trustees have exercised their discretion in favour of such beneficiary upon which such distribution vests in the beneficiary. Discretionary beneficiaries, therefore, do not have real rights (ownership) in the trust property because the trust assets belong to the trustees in their representative capacity (CIR v MacNeillies’ Estate case of 1961) on behalf of all beneficiaries.
Depending on the terms of the trust instrument, trustees can, at their discretion, vest income, capital gains and/or capital of the trust in such beneficiary, subject to certain requirements, such as payment only on a future date or when a certain event takes place. The beneficiary with such a vested right has a personal right to claim an asset and/or income and/or capital gain from the trustees in terms of the provisions of the trust instrument, but subject to rights attached to such vested right. Such distributions will also be exposed to creditors and will fall within the estate of the beneficiary.
Real rights to assets (bewind trust)
In the context of trusts, a real right (right in rem) to an asset is, for example, a right of ownership. A real right is an absolute right that can be enforced against anyone, and not just against one person. A real right, therefore, establishes a legal relationship between a thing (property) and a person when that person owns an asset outright.
The beneficiary acquires ownership of the asset upon the creation of the trust, and control and administration of the trust is transferred to the trustees to protect or care for the beneficiary who normally has a legal limitation (such as being under the age of eighteen or being of unsound mind) or some other limitation (for example, they are mentally or physically challenged) (Section 1(b) of the Trust Property Control Act). Here, it is implied that the property should be registered in the names of the beneficiaries and not in the names of the trustees.
~ Written by Phia van der Spuy ~
Feb 26, 2021 | Article
Herewith an informative article written by Phia van der Spuy:
Trustees are legally vested with the administration of the trust’s assets. They must manage the assets and liabilities of the trust in terms of the provisions of the trust instrument and the law, and not necessarily in a manner that pleases the beneficiaries.
Disharmony may exist in the administration of a trust – this is in itself not sufficient for the removal of a trustee. The Court held in the Gowar v Gowar case of 2016 that the “overriding question is always whether or not the conduct of the trustee imperils the trust property or its proper administration. Consequently, mere friction or enmity between the trustee and the beneficiaries will not in itself be adequate reason for the removal of the trustee from office… Nor, in my view, would mere conflict amongst trustees themselves be a sufficient reason for the removal of a trustee at the suit of another”.
This case made it clear that it is not that easy to remove a trustee and that the motivation should be sound for doing so. The Court has to be certain that the removal of a trustee will be in the interest of the trust and the beneficiaries. A beneficiary’s unhappiness with a trustee, and even inefficiency of the trustee, is not enough for a court to remove a trustee. More is required.
Removal in terms of trust instrument
Trust instruments usually stipulate specific criteria for the removal of trustees which may include the removal of a trustee as approved by the majority of trustees, or beneficiaries. Such a clause does not seem to give the protection for which many people hope. Even though a trust instrument may contain a clause that empowers trustees, or beneficiaries to remove another trustee by majority vote, it is not sufficient to enforce this clause without reason (Ritom Trust versus van Niekerk case of 2018).
Trustees are required to act reasonably and exercise reasonable care when removing another trustee. Removal without good cause is against public policy (as found in the South African Constitution in terms of the Minister of Education v Syfrets Trust Ltd case of 2006) and the principles of ubuntu, reasonableness and fairness. If a trustee is requested by others to resign, they shall vacate their office only in the event of a written letter of acceptance.
Removal by the Master
The Master of the High Court can play a role in ensuring that the trustees conduct themselves in a proper way in accordance with both the law and the trust instrument. In certain instances, the Master may even remove a trustee from office. The Master does have the power to remove a trustee in terms of Section 20(2) of the Trust Property Control Act if a trustee does not comply with a lawful request of the Master of the High Court, such as a request to provide accounts and documents for the trust in terms of Section 16 of the Act. Note that in terms of Section 23 of the Act, anybody who feels aggrieved by the removal of a trustee by the Master may apply to the Court for relief.
Removal by the Court
Section 20 of the Act allows the Master, and any person having an interest in the trust property, to apply to the Court for a trustee to be removed. In the Burger v Ismail case of 2013, the Court held that it should be cautious about removing a trustee and should consider alternative measures first.
The Court will remove a trustee if it is satisfied that such removal will be in the interests of the trust and its beneficiaries. Apart from the Master, only a beneficiary – and not a person other than the beneficiary who has “sufficient interest in the matter” – is permitted to apply to Court for the removal of a trustee (Ras v Van der Meulen case of 2011). A trustee cannot be the applicant to remove a co-trustee since a trustee has no interest in trust property.
The Court is not bound by the requirements of Section 20(1) but has inherent power to remove a trustee from office at common law. In terms of our common law, a trustee may be removed where the non-removal of a trustee would prevent the trust from being properly administered, or where the continuance of the trustee in office would be detrimental to the welfare of the beneficiaries as a whole, not to one disgruntled beneficiary. Neither dishonesty nor misconduct is required for the removal of a trustee – the only requirement is that their removal is in the interests of the trust and its beneficiaries.
The Court’s power to remove a trustee must be exercised with caution. It should always consider whether the trustee’s conduct endangered the trust property or its proper administration. Conflict between the trustees and/or beneficiaries is not sufficient reason for a court to remove a trustee. The overriding factor is the welfare of the beneficiaries and the proper administration of the trust and the trust property. The removal of a trustee will only be ordered if the trustee’s continuance in office will prevent the trust from being properly administered, or be detrimental to the welfare of the beneficiaries. The Court may remove a trustee who places their own interests above those of the trust beneficiaries (Mofokeng v Master of the North Gauteng High Court case of 2013).
In the Tijmstra v Blunt-Mackenzie case of 2002, it was held that
a trustee may be removed from office, even if they acted bona fide (without an intention to deceive). It was argued that a trustee’s office should be terminated by the Court if they allowed maladministration of the trust by the other trustees, without acting on it. It further argued that mala fides (acting in bad faith) or even misconduct are not necessary requirements for the removal of a trustee. This view of the Court is a strong warning to trustees, who should be aware of this view, and the possible consequences for turning a blind eye.
Feb 26, 2021 | Article
SA’s legal practitioners, already disgruntled with alleged corruption at the country’s 15 Master’s Offices, say the disarray in winding up deceased estates – worsened by Covid-19 deaths – risks taking them out of the R30bn sector. Business Day says the functioning of the offices has been a contentious issue with concerns raised especially over the huge backlogs. The pandemic has worsened the situation as Covid-19 deaths add to the bottleneck of deceased estates.
Louis van Vuren, CEO of the Fiduciary Institute of Southern Africa, a non-profit organisation representing fiduciary practitioners, said that while turnaround times and service levels ‘are under strain in most Master’s Offices’, this did not apply to all as some offices cope better with their workload than others. ‘The vast majority of complaints from the major centres in the last three years relate to the Master’s Offices in Johannesburg, Pretoria and Cape Town, while no complaints have been received about the offices in Bloemfontein and Kimberley.’
A G Jenkins Attorneys have a roster of it’s Candidate Attorneys who visit the Pietermaritzburg Master’s Office two or three times a week to personally follow up on matters requiring attention by the Master’s Office, in order to try and expedite matters, and so we have luckily been able to manage the situation as best as possible in the current situation.
Recent Comments