Friday, 22 March 2013

Same-Sex Marriage Laws

America is on the verge of deciding on two key issues relating to same-sex marriage.  Firstly, whether legislation prohibiting same-sex marriage is lawful, and secondly, whether it is lawful to withhold certain Federal State benefits on the basis of same-sex marriage. Put in a different way, America is deciding whether gay couples should be treated the same as heterosexual couples.

By way of example, in Missouri the law allows an employer to fire an employee if he or she says they are gay.  There are 29 States in America where it is lawful to fire someone for being gay. Surely, in the 21st century this should not be permitted – as a global society we must learn to be tolerant and acutely aware of diversity. US politicians, for the most part, appear to be in favour of Lesbian/gay/bisexual/transgender (LGBT) equality with current US president Barack Obama publicly backing same-sex marriage.  Indications are that the US Supreme Court will rule in favour of equality rights extending to all persons, regardless of sexual orientation.

To give some further context, in the United States, gay married couples are precluded from certain tax benefits and benefits relating to death and retirement. Conversely, in many other parts of the developed world, equality on the basis of same-sex marriage is recognized.  South Africa, for example, is at the forefront of global legislation relating to equality rights.  The Constitution of South Africa 1996 contains an equality clause which poignantly notes: “everyone is equal before the law and has the right to equal protection and benefit of the law”.

Rewind four decades and America was leading the way in social equality law making.  The seminal case relating to a mothers right to abortion, Roe v Wade, set an example that many countries followed; a mothers right to abortion is limited to the circumstances of each case and the trimester within which the abortion is requested to take place, it is however permissible, under certain circumstances, for a mother to make her own choice regarding abortion.

At the risk of verging into academics, the foundation of South Africa’s legal system is Roman-Dutch and English.  As in all other developed areas, at that time, the law was written and interpreted in a way that never included current social dynamics and was largely patriarchal in nature. Same-sex marriage.  Male rape. Same sex adoption; these issues had never been considered in a judicial sense.

In the matter of Masiya v Director of Public Prosecutions Pretoria the Constitutional Court grappled with the common law definition of rape, which was, at that time, the unlawful penetration of a woman’s vagina with a man’s penis.  The wording was problematic in that it did not include male rape nor did it include rape with external, foreign objects nor did it include anal rape.  Simply, it was gender specific and did not reflect the changing values and norms of our society.

The result was that a rapist, who elected to rape men and boys, was charged with the far lesser offence of indecent assault. The resulting sentence was clearly far lower. The Constitutional Court in South Africa recognized the problem and ordered the development of “the common-law definition of rape to include the non-consensual sexual penetration of the male penis into the vagina or anus of another person”.  The resulting definitional change of rape as, “an act of Sexual Penetration of a victim, without their consent” is far more appropriate.

Insofar as gay marriage is concerned, in South Africa the 2005 matter of Minister of Home Affairs v Fourie dealt with same-sex marriage.  Marriage, at that time, was defined as a union of one man with one woman .  All nine judges unanimously agreed that gay marriage should be permitted, particularly in light of section 9 (equality clause) of South Africa’s constitution, and the 2006 Civil Unions Act was the final result.  This Act provides for same-sex marriage and, from 30 November 2006 same-sex marriage has been permitted in South Africa.

The United States is often looked upon as a world leader – in business, technology and legal jurisprudence. The imminent decision on gay rights will define and shape many US Supreme Court decisions for years to come, and by implication, influence and shape a new chapter of equality rights on a world wide stage.

Sunday, 17 March 2013

Responsible Bank Lending: check your deductions...

The Banking Association of South Africa (BASA), together with the Minister of Finance released a statement regarding “responsible market conduct for bank lending” at the back end of 2012. The full statement is available on the BASA website.

The BASA is represented by South Africa’s major retail banks, and the review was necessitated by the tragic events at Lonmin Mines in Marikana.  Essentially, a limited review of South Africa’s banking environment found the following issues:

  • Excessive lending to households even when such loans are not affordable.
  • Illegal collection practices such as keeping ID documents, bank cards and PINs.
  • Selling inappropriate credit products to maximise margins (example: using expensive 
unsecured lending for house renovations instead of cheaper mortgage loans).
  • Extending unaffordable loans to pensioners and other social grant recipients.
  • Abuse of consumer credit and asset insurance, including excessive fees and charges. 
  • Abuse of debt and garnishee orders, and of direct payroll deductions.

The South African reserve bank’s statistics show that the ratio of household debt to disposable income remains excessively high at around 76%.   To add to this dire picture, a South African corporate law firm was mandated to investigate fraud on garnishee orders and other forms of attachment order.  The level of unlawful judgments, with excessive interest rates and incorrect legal allegations was astounding.  As a result, the BASA and Minister of Finance have agreed to, amongst other things, refrain from collecting on emolument attachment orders. The other commitments made, include:

  • Prevent future indebtedness and address current over-indebtedness where practical, BASA and its member banks will review their approach to the assessment of affordability, and ensure the selling of appropriate credit products to their customers.
  • BASA, the National Credit Regulator and the National Treasury will formulate a standard to measure affordability, which could then be incorporated into regulations as minimum standards.
  • Each relevant BASA member bank will develop approaches to provide appropriate relief to qualifying distressed borrowers by reducing their instalment burden, without additional cost to the borrower.
  • BASA members agree to minimum norms and standards for consumer credit insurance practices linked to lending, and will work with the National Treasury and the Registrar of Insurance to develop a framework that take into account the interests of customers, appropriateness and the full impact of all charges on affordability.
  • BASA members commit not to use garnishee orders against credit defaulters, as they believe the use of such orders for credit is inappropriate. (my emphasis)

I have personally reviewed many default judgments and emolument attachment orders and the rate of deception and downright fraudulent practice is startling.  If you or any of your employees are having deductions made as a result of a judgment in the Magistrates Court I would recommend you and your company urgently review these orders and attachments urgently.

Please remember, this does not mean all banks and garnishee orders are fraudulent.  Many BASA members and credit institutions have been following the letter and spirit of the legislation.  Having said that, many have not, so the prudent exercise is to review existing HR and deduction policies as a matter of urgency.