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BUILDING: Builders Warned Of Criminal Charges


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The Building Industry Bargaining Council (Cape of Good Hope) will proceed with criminal charges against employers in the building industry who are deducting contributions (retirement fund, medical aid etc) from their employees and failing to pay it over. Criminal procedures for not paying over contributions were initially instigated in 2005, but halted due to the lengthy process and cost involved. The Council has once again decided to implement the legal route, this time with decided force and the undertaking to publicize the names of guilty parties.

Given the current tough industry conditions, the BIBC suspects an increase in unlawful practices. Citing the general ‘collapse’ of especially the residential housing market since 2008, building projects have been very scarce. “Compliant contractors compete with non-compliant contractors often resulting in the tender or contract prices of the non-compliant party being lower, due to lower labour costs, giving the non-compliant contractor an unfair and illegal advantage,” explained Arnold Williams, Secretary for Building Industry Bargaining Council (Cape of Good Hope).
The BIBC has a dedicated team of Compliance Agents that conduct regular site inspections and blitzes. Once suspicion of nonconformity has been established, the agents investigate non-compliance to the agreement in general and should investigations reveal that deductions made for benefits have not been paid over legal procedures follow. In addition to this, employees in the industry can at any time lay a complaint at the BIBC if they become aware of benefits being deducted from their wages, but not paid over to the BIBC.

Employers found guilty of the violation will be charged with theft (general deficiency), and once all the evidence has been verified it is handed over to the Commercial Crimes Unit to prosecute the guilty parties. If found guilty, non-compliant employers are likely to be fined, and could face a jail sentence. Although the procedure is lengthy and costly, taking up to two years should guilty parties’ contest the charges, the BIBC believe that the process is critical to ensure that employee’s rights are protected and the industry operates on a level playing field. The BIBC explain that whether a builder is a member or a non-member of the parties to the Council, it is necessary to comply and that no employers are above the law. “All employers within the scope and jurisdiction of the Bargaining Council have to comply with the Collective Agreement, simply due to the fact that the agreement is extended to non-parties of the Council by the Minister of Labour,” added Williams. It is also important for employers to understand that contributions need to be paid over on a monthly basis, as even if the employer pays over the benefits at year end, it still has a negative impact on the employee’s death and pension benefits since the interest that he should have earned is lost. Furthermore , the employer shall be held liable to pay to such employee or his beneficiary an amount of money equal to the death, disability and/ or funeral benefits that would have been payable to the employee under the rules of the applicable fund for being non compliant.

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