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t all started with one of her work­ers strug­gling to pay off a debt, Wendy Appelbaum ex­plains from her favourite chair in her house on the De Mor­gen­zon wine es­tate in Stel­len­bosch.

Appelbaum, who owns the wine es­tate, is a lead­ing busi­ness­woman and phi­lan­thropist. She fronted this week’s debt judg­ment, which ex­perts say will have a rip­ple ef­fect across the econ­omy.

A ma­jor vic­tory was scored when Western Cape High Court Judge Si­raj De­sai ruled that de­duc­tions from em­ploy­ees’ salaries for so-called gar­nishee or­ders were illegal.

The Na­tional Credit Act makes it com­pul­sory for cred­i­tors to make an af­ford­abil­ity as­sess­ment be­fore giv­ing credit to those who ap­ply for it. The trou­ble started when one of Appelbaum’s em­ploy­ees bought some­thing on credit, but a proper af­ford­abil­ity as­sess­ment was not done be­fore­hand.

“In the case of my em­ployee, they filled in one on his be­half. They filled in that he paid no rent, no food, noth­ing to pay and only needed R50 a month to sur­vive. Who lives on R50 a month? He has five chil­dren. They [mi­crolen­ders] break all the rules be­cause they get away with it as the in­dus­try is not reg­u­lated.”

Gar­nishee or­ders, as they are col­lo­qui­ally known, are emol­u­ment at­tach­ment or­ders that al­low de­duc­tions to be made straight from the wages of em­ploy­ees who de­fault on loans and other credit ex­tended to them. Through his judg­ment, De­sai has man­aged to strike down sev­eral com­mon prac­tices that can en­slave work­ers.

Sum­mit Gar­nishee So­lu­tions, a com­pany that au­dits pay­rolls for sus­pect gar­nishee or­ders, says 40% to 50% of these or­ders are is­sued in wrong ju­ris­dic­tions, mak­ing them illegal.

This means of the es­ti­mated 1 mil­lion gar­nishee or­ders that have been granted, as many as 400 000 could be un­law­ful.

Appelbaum es­ti­mates that debt col­lec­tors steal about R5 bil­lion from the poor by over­charg­ing on in­ter­est, le­gal fees and trac­ing fees im­posed on overindebted bor­row­ers who de­fault on loans.

She also doesn’t un­der­stand how so many gar­nishee or­ders can be ob­tained in courts that are far from where peo­ple bor­row money. This, she said, opened the whole sys­tem up to abuse.

“They bribe the clerks of the courts in small towns. How can it be pos­si­ble that in a tiny town, up to 300 to 350 gar­nishee or­ders are made a day out of ju­ris­dic­tion with­out it be­ing ab­so­lutely rot­ten to the core? There is such a gross abuse of the sys­tem.”

Appelbaum is scathing in her crit­i­cism of gov­ern­ment, which she says has taken lit­tle ac­tion de­spite stud­ies done by the Univer­sity of Pre­to­ria in 2008 and 2013, re­spec­tively, which rec­om­mended how to deal with the is­sue of un­se­cured lend­ing and gar­nishee or­ders.

The study rec­om­mended that salary at­tach­ment or­ders be ob­tained in a court that has ju­ris­dic­tion over the in­debted em­ployee’s busi­ness premises. It also found that in cases where it is sus­pected that an in­debted em­ployee will not take home enough money to live off af­ter the money owed is de­ducted from their salary, they should be able to ne­go­ti­ate



Wendy Appelbaum’s con­cerns have led to a court rul­ing on gar­nishee or­ders

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