Barnard v Shellard Media (Pty) Ltd (J 1470/99) [2000] ZALC 57 (28 June 2000)

Barnard v Shellard Media (Pty) Ltd (J 1470/99) [2000] ZALC 57 (28 June 2000)

The court held that the settlement amount paid to the respondent constituted gross income as defined in section 1(d) of the Income Tax Act, as it was paid in respect of the termination of employment. The law imports an implied term into the settlement agreement obliging the employer to deduct employee tax from the payment. The applicant complied with this obligation by deducting the tax and depositing the balance into the respondent's account. Any attempt by the parties to exclude tax obligations in their agreement is nullified by the provisions of the Income Tax Act. The writ of execution and attachment of goods was therefore invalid, as the employer had fulfilled its legal and...

Citation
[2000] ZALC 57
Parties
Applicant: Michael Barnard; Respondent: Shellard Media (Pty) Ltd
Court
Labour Court
Jurisdiction
South Africa
Judgment Date
28 June 2000
Case Number
J 1470/99
Procedural Posture
Urgent Application / Application to Set Aside Writ of Execution
Outcome
Application granted; writ of execution and attachment set aside.
Judges
Molahlehi
Legal Topics
Settlement Agreement, Employee Tax Deduction, Gross Income Definition, Writ of Execution, Remuneration, Implied Terms
Labour Law Tax Law Settlement Agreement Employee Tax Deduction Gross Income Definition Writ of Execution Remuneration Implied Terms

Case Brief

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Parties

Michael Barnard

Applicant

Shellard Media (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Application to Set Aside Writ of Execution

Legal Issues

  1. 1 Whether the employer was legally obliged to deduct employee tax from the settlement amount paid to the employee.
  2. 2 Whether the settlement agreement amount constituted gross income under the Income Tax Act.
  3. 3 Whether the writ of execution and attachment of goods was valid given the employer's compliance with the settlement agreement.

Ratio Decidendi

The court held that the settlement amount paid to the respondent constituted gross income as defined in section 1(d) of the Income Tax Act, as it was paid in respect of the termination of employment. The law imports an implied term into the settlement agreement obliging the employer to deduct employee tax from the payment. The applicant complied with this obligation by deducting the tax and depositing the balance into the respondent's account. Any attempt by the parties to exclude tax obligations in their agreement is nullified by the provisions of the Income Tax Act. The writ of execution and attachment of goods was therefore invalid, as the employer had fulfilled its legal and...

Court Disposition

Application granted; writ of execution and attachment set aside.

Orders

  • The writ of execution issued out of the Labour Court in this matter on 4 June 1999 and the consequent attachment effected by the Deputy Sheriff for the district of Randburg on 18 June 1999 is set aside.
  • There is no order as to costs.