Automated Summary
Key Facts
The case involves Engineering Industries Pension Fund and Metal Industries Provident Fund (applicants) seeking payment of outstanding pension and provident fund contributions from Installair (Pty) Ltd (in liquidation) and its directors Paolo and Sandra Orso (respondents). The applicants allege non-payment of contributions for the period January 2020 to July 2020 under sections 13A(8) and (9) of the Pension Funds Act, which impose personal liability on directors for non-compliance. The court ordered the directors to submit contribution schedules, pay R93,715.53 in outstanding contributions, and cover legal costs. The judgment was delivered on 16 January 2025.
Issues
- Whether directors are personally liable under s13A(8) & (9) of the PFA for unpaid pension and provident fund contributions by the employer.
- Whether the third respondent, as a director, was sufficiently involved in the employer's financial management to incur personal liability under s13A(8)(a).
- Whether the respondents' claim of no deductions from employee salaries negates their liability under the PFA.
Holdings
- Directing the Second and Third Respondents to pay over the accrued amount of R93 715.53 (Ninety-Three Thousand, Seven Hundred and Fifteen Rand, Fifty-Three Cents) to the Applicants, based on contribution schedules already submitted but not paid.
- Granting the Applicants leave to approach the Court on the same papers, as supplemented, to seek relief once the amounts payable by the Respondents are quantified based on the schedules and forms provided.
- Directing the Second and Third Respondents to pay all outstanding pension and provident fund contributions, together with prescribed interest, to the respective Applicants within one calendar month after the Applicants determine the amounts based on the provided schedules.
- The Second and Third Respondents, jointly and severally, are ordered to pay the Applicants' legal costs in respect of this application on an attorney and own client scale.
- Directing the Second and Third Respondents to provide the Applicant with outstanding pension and provident fund contribution schedules for the periods May 2020 to July 2020 within 30 calendar days of the Court Order.
Remedies
- The Second and Third Respondents, jointly and severally, are ordered to pay the Applicants' legal costs in respect of this application on an attorney and own client scale, described as punitive due to the neglect of statutory responsibilities.
- Directing the Second and Third Respondents to provide outstanding pension and provident fund contribution schedules for the periods May 2020 to July 2020 within 30 calendar days of the Court Order, as contemplated in Regulation 33 of the Pension Funds Act.
- Directing the Second and Third Respondents to pay all outstanding pension and provident fund contributions, together with prescribed interest thereon, to the Applicants within one calendar month of the Applicants determining the amounts payable based on the provided schedules.
- Directing the Second and Third Respondents to pay R93 715.53 (Ninety-Three Thousand, Seven Hundred and Fifteen Rand, Fifty-Three Cents) in monies owing to the Applicants, determined based on contribution schedules already submitted but not paid over.
- The Applicants are granted leave to approach the Court on the same papers, as supplemented, to seek relief once the amounts payable by the Respondents have been quantified based on the returned schedules and forms.
Legal Principles
The court applied s13A(8) & (9) of the Pension Funds Act (PFA) to hold directors personally liable for unpaid pension contributions. The judgment emphasizes that statutory obligations under the PFA override unilateral employer decisions to withhold contributions, and directors regularly involved in financial management cannot evade liability even if the employer is in liquidation. The 2014 amendments to the PFA reintroduced criminal sanctions and personal liability for non-compliance, which the court enforced against the respondents.
Precedent Name
- Motseotsile Clement Marumoagae
- Joint Municipal Pension Fund v Ehlanzeni District Municipality
Cited Statute
- Financial Services General Laws Amendment Act, 22 of 2008
- Pension Funds Act, 24 of 1956
Judge Name
Parker AJ
Passage Text
- [26] ... s13A(8)(a) now permits them to hold not only the employer, but also the employer's directors personally liable for the employer's debts 'without the need to pierce the corporate veil'.
- [21] Second Respondent contends that no actual deductions were made from employees in this period. In terms of s13A(1) read with ss(3), it is peremptory to pay over the contributions deducted from salaries. Section 13(8)(a) imposes personal liability on those directors of the employer who are regularly involved in the management of the employer's overall financial affairs.
- [32] ... directing the Second and Third Respondents to pay over the monies owing to the Applicants ... R 93 715,53 (Ninety-Three Thousand, Seven Hundred and Fifteen Rand, Fifty-Three Cents).