Errant employers may face prison

Those who keep their employees' pension fund contributions are being taken to task.

- By Neesa Moodley

(Unsplash)

Errant employers who fail to pay over retirement fund contributions to the funds will now face the full brunt of the law, thanks to the withdrawal of an exemption that previously shielded them.

The withdrawal of the exemption on 13 January applies to contributions to all benefit funds including pension, provident, retirement and medical aid funds.

Nicci van Vuuren, a partner at Webber Wentzel, notes that contributions to pension, provident or retirement funds are also regulated under the Pension Funds Act. In this regard, labour inspectors can now enforce compliance with section 34A alongside the existing regulatory powers of the Financial Sector Conduct Authority.

“The timing and nature of this withdrawal is significant,” she says.

“Section 50(9) of the Basic Conditions of Employment Act provides that the minister may withdraw a determination following an application by an affected party, being an employer organisation, registered trade union or covered employee.