Legalities of running a loan shark business in the workplace.
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GUEST - Kagiso Lebethe - Senior Employee Relations Specialist.
It is common for stokvel members or third parties to borrow money from the stokvel and interest is typically charged on the provided loans. This may potentially create problems within the employment context in circumstances where disputes may arise concerning the terms of the loan and/or the repayment thereof. For this reason, it is not unusual for an employer to prohibit the granting of loans in the workplace, whether on an individual basis or through a stokvel. However, the question arises: Can an employer dismiss an employee for participating in a money-lending scheme when there are no specific workplace rules in this regard?
In Kaweng v South African National Biodiversity Institute and Other, the Labour Court recently had to determine the fairness of the dismissal of an employee who was found guilty of engaging in an unlawful money-lending scheme at the workplace.
It is common for stokvel members or third parties to borrow money from the stokvel and interest is typically charged on the provided loans. This may potentially create problems within the employment context in circumstances where disputes may arise concerning the terms of the loan and/or the repayment thereof. For this reason, it is not unusual for an employer to prohibit the granting of loans in the workplace, whether on an individual basis or through a stokvel. However, the question arises: Can an employer dismiss an employee for participating in a money-lending scheme when there are no specific workplace rules in this regard?
In Kaweng v South African National Biodiversity Institute and Other, the Labour Court recently had to determine the fairness of the dismissal of an employee who was found guilty of engaging in an unlawful money-lending scheme at the workplace.