High Court judgment gives hope to the poor, marginalised and vulnerable members of our society
The South African Human Rights Commission (SAHRC) welcomes the judgment handed down yesterday by the Western Cape High Court in a matter relating to the lack of judicial oversight in the granting of emolument attachment orders ("EAOs"). The SAHRC intervened in the matter as amicus curiae, to champion the human rights of people who are poor and vulnerable. In handing down his judgment, Judge Desai placed on record the court's 'indebtedness to the amicus curiae and their counsel.'
This case raised important questions about the protection of human rights of people who are poor, marginalised and vulnerable. The case was instituted by against the Minister of Justice, the Minister of Trade and Industry, the National Credit Regulator, 13 micro-lenders and a firm of attorneys. The applicants were a group of low income earners living in Stellenbosch, who support themselves and their families on salaries of between R1200.00 and R8000.00 per month. They were represented by the University of Stellenbosch Law Clinic.
Prior to this judgement, EAOs were issued in the magistrate courts to compel employers to deduct moneys (instalments in terms of judgment debt) owing to creditors, from the wages of employees. This continued until the full amount of the debt was paid off. Such orders, were issued by a clerk of court. The clerk was not obliged to evaluate the implications of the order on the livelihood of the debtor. This meant that there was no judicial oversight in the entire process. The orders could also be issued in courts where the debtor did not live or work.
Yesterday's judgment declares the granting of such EAOs unlawful and therefore unconstitutional.
The SAHRC welcomes the fact that the Department of Justice, as one of the respondent's in the case, has undertaken to abide by the Court's decision. The judgment must result in timely legislative reform to correct this situation.
In its submission to court, the SAHRC advanced various arguments on business accountability for human rights to the court. The SAHRC drew the court's attention to domestic and foreign law which relate to judicial oversight in terms of attaching property and salary for debts. In advancing its argument, the SAHRC highlighted practise in the USA, Australia, Germany and Rwanda, where EAOs are capped and recommended the same should be done in SA. The SAHRC recommended that red flags should be raised where an EAO exceeded 30% of the debtor's salary.
The court noted its concern that money lenders 'forum shop for courts which entertain the applications for judgment and the issuing of EAOs,' in addition it expressed concern that that the respondents indicated they have 150 000 active cases. On this basis it assumed that thousands, if not tens of thousands... [of cases] involving ordinary working people in debt, are having significant portions of their salaries or wages deduced based on unlawfully obtained EAOs.'
The court called on the respondents not to 'pursue EAOs obtained against debtors in the wrong jurisdiction' and that the South African Human Rights Commission, along with the Law Society, to 'endeavour to ensure that appropriate measures are in place to monitor the situation.'
In support of the SAHRC's representations in this case, the judgement notes that 'the UN Guiding Principles on Business and Human Rights place a duty upon the state to take measures to prevent the abuse of human rights in their territory by business enterprises. States are obliged to reduce legal and practical barriers that may deny individuals remedy.'
The SAHRC views this judgment as a victory for people who are poor, vulnerable and marginalised and do not always have the means to challenge decisions which affect their lives. The judgment is an affirmation of the vision of our constitutional democracy, which is to improve the quality of life of all citizens and free the potential of each person. The SAHRC will continue to engage on the topic of business and human rights, particularly within the micro lending sector to address the egregious impact of unethical business practices which deny people who are poor access to constitutional rights and remedies.