Answer to a question from a reader

Can my employer withhold my provident fund if I was dismissed on a safety-related charge?

The short answer

No, only the provident fund can withhold an employee's provident fund for reasons stipulated in Section 37 of the Pensions Act.

The whole question

Dear Athalie

I was dismissed by my employer on 10 September 2021. My trade union has lodged an appeal with the bargaining council for conciliation at the CCMA. My employer is not allowing me to withdraw my benefits from the provident fund, stating that since I am appealing the dismissal I will not be able to withdraw my benefits, even if the process takes a whole year. 

Can my employer do this? 

There is no case of fraud and I do not owe the employer money. I was dismissed on a safety-related charge.

The long answer

To start with, each provident fund established by a bargaining council will lay down its own rules, which are hard to access by non-members, and I could not access the rules of your particular provident fund. But what I have managed to glean about bargaining council funds is that a worker can usually only withdraw benefits after a year of leaving the company “if he or she is still unemployed or was re-employed outside the industry. If the worker is re-employed in the same industry before one year is up, then contributions carry on as if there was no change in job.” Bargaining Council funds do not allow a worker to withdraw benefits if he or she leaves one company to go and work for another company in the same industry.

This may be what your employer is relying on to delay paying out your provident fund benefits.

But no provident fund allows withholding of benefits outside of the reasons given in Section 37 of the Pensions Act, which is to do with fraud and dishonesty, and apply only when the provident fund member has admitted in writing to the alleged fraud or dishonesty or if the employer has lodged a criminal case in court against the member. 

Even then, the employer may not withhold the provident fund benefits: the decision to withhold the provident fund benefits can only be made by the fund itself after the employer has applied to it. In the case of SA Metal Group versus Deon Jeftha in 2019, the court found further that the fund had to balance the competing interests of the employer and employee, and that the fund had to afford the member an opportunity to be heard as well as the employer. 

Perhaps the best thing is to contact the administrator of the fund and ask them on what grounds they are withholding your provident fund since no dishonesty has been alleged in your dismissal. 

If the administrator is unhelpful or you are not satisfied with the fund’s answer, you could lay a complaint with the Pensions Adjudicator. The adjudicator's office investigates and decides complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty concerning pension and provident funds. You need to make a written complaint to the fund or the employer and allow them 30 days to respond before you can approach the Adjudicator. 

The Office of The Pension Funds Adjudicator is in Pretoria, Gauteng. You can contact the office for general enquiries or to lodge a complaint at or call 012 346 1738.

Unfortunately there is a long backlog of cases at the Adjudicator’s office, and it may be that your appeal against your dismissal will be concluded before your complaint is taken up.

Wishing you the best,

Answered on Nov. 11, 2021, 4:36 p.m.

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