May 2016


Editor's Note - May 2016 Editor's Note May 2016

This month, I was personally challenged with the very topical issue of where one draws the line between expressing a genuinely held opinion and offending people. without prejudice received an interesting and well written article for inclusion in this issue of the magazine.

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Sureties and business rescue Company Law May 2016

A pertinent issue which has arisen in the context of business rescue is whether, and when, a creditor of a company in business may pursue a surety.

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Reflective loss Company Law May 2016

In a recent judgement, the Supreme Court of Appeal confirmed and restated some important principles around the "reflective loss" principle found in the common law pertaining to companies (Itzikowitz v Absa Bank Ltd (20729/2014) [2016] ZASCA 43 (31 March 2016)). The principle precludes a shareholder of a company from claiming loss or damages (for example, a diminution in the value of their shares) resulting from circumstances where the company itself has suffered loss or damages. The courts have held that the shareholder's loss is merely "reflective" of the company's loss and, if anyone, it is the company which must institute action for that loss. The shareholder can only claim if he has a distinguishable and independent cause of action. 

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Classification of directors Company Law May 2016

The King Report on Governance for South Africa 2009 (King III) states that an independent director should be independent in character and judgement and there should be no relationships or circumstances which are likely to affect or could appear to affect this independence.

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Do directors owe a fiduciary duty? Company Law May 2016

Under South African law, the employees of a business and the employer itself have some very specific rights and obligations in terms of both the common law and existing labour legislation. One of these duties is the duty of employees to act in their employer's best interests (Tshishonga v Minister of Justice and Constitutional Development (JS898/04) [2006] ZALC 104 (26 December 2006) at [170]).

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Excessive pricing – quo vadis? Competition Law May 2016

Section 8(a) of the Competition Act, 1998 prohibits a dominant firm from charging “an excessive price to the detriment of consumers".

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Cash flow is king Construction Law May 2016

What is changing and why?

South African law is about to go through a step-change development in relation to two of the most common issues that affect construction projects:

  1. The ability of contractors and sub-contractors to obtain payment promptly; and
  2. The effective resolution of disputes.

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Insufficient adjudicators Construction Law May 2016

Statutory adjudication in the construction sector is to be introduced in South Africa, but there are insufficient adjudicators to meet the anticipated demand. The Regulations are being reviewed by the Department of Public Works and Treasury for conflict with existing legislation. They were due out by the end of March but have been delayed, with no reason disclosed for the delay.

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FIDIC: Correct contract selection Construction Law May 2016

Use of the Joint Building Contracts Committee's (JBCC) Principal Building and N/S Subcontract Agreements has dominated the South African construction landscape for some time. However, there is an increase in the use of the standard form suite of construction contracts published by The International Federation of Consulting Engineers (FIDIC), particularly in larger construction and infrastructure projects.

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The effect of the CPA on lease agreements Consumer Law May 2016

Since the enactment of the Consumer Protection Act (68 of 2008) (the CPA), there have been several changes to the law that have, in turn, affected lease agreements involving immovable property. Accordingly, it is important to become au fait with these, from both a landlord's perspective as well as a tenant's.

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Plain language is plain necessary Consumer Law May 2016

Afew years ago, with the introduction of the Consumer Protection Act (68 of 2008) (CPA) everyone was worked up about plain language, and plain language practitioners saw a surge of work. But then the Act became enforceable, and nothing happened, and slowly the compulsion to have contracts and consumer facing communications in plain language petered out.

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Tales from the US of A... May 2016 International May 2016

Blanket ban on renting to convicted criminals violates Fair Housing Act
Landlords in the US are warned to beware of imposing a blanket ban on renting to those with a criminal record. Many housing providers are using a conviction – any conviction, regardless of what it was for or how long ago it happened – to indefinitely bar people from housing opportunities. A ban requires consideration of factors such as the severity of the crime and how it might impact other tenants. This follows a 2015 US Supreme Court ruling that upheld challenges to landlord policies that have a discriminatory impact regardless of intent.- Martha Neil April 4

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Equal work for equal pay Employment Law May 2016

The Employment Equity Amendment Act, 2013, introduced two changes to s6 of the Employment Equity Act, 1998 (the EEA). The first is that discrimination in terms of s6(1) may be unfair on any of the listed grounds, or on any other arbitrary ground. The second is the insertion of s6(4) which says that “a difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value that is directly or indirectly based on any one or more of the grounds listed in ss(1) is unfair discrimination."

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No man can serve two masters Employment Law May 2016

In my previous article (which first appeared in the magazine distributed at the World Labour Law Congress in September and again in the November issue of without prejudice, p40), it was indicated that the Labour Court would still have to pronounce upon the interpretation of the deeming provision, as expressed in s198A(3)(b) of the Labour Relations Amendment Act of 2014. On 8 September 2015, our Labour Court did so, per Brassey AJ in Assign Services (Pty) Ltd v CCMA and Others [2015] 11 BLLR 1160 (LC).

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Captive power – An energy solution for the mining sector Energy Law May 2016

The mining industry is under increasing pressure to consider alternative means of power supply. The industry is faced with the effects of a growing energy deficiency as evidenced by the recent approval by NERSA of an Eskom tariff hike exceeding 9% and energy supply constraints to the mining industry and resulting losses in excess of R1.3 billion, as reported by Consultancy Africa Intelligence. Mining companies are looking inwards and exploring solutions that allow for independent electricity generation in mitigation of what EY, in its 2015 – 2016 report on business risks facing mining and metals, ranks as one of the top ten business risks in the mining industry – inadequate access to energy.

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