Africa-Press – Namibia. A Judge has authorised the continued operation of the government’s payroll deduction management system, which the finance ministry was planning to discontinue at the end of November.
In an order issued by deputy judge president Hannelie Prinsloo on Friday, the court directed finance minister Ericah Shafudah not to interfere in the loading of new deductions on the government’s payroll deductions management system and not to issue instructions that no new deductions may be loaded onto the system.
The order was given in an urgent application that the microlending company Entrépo Finance filed against the minister of finance and 36 other respondents in the Windhoek High Court at the end of September.
In the application, the company asked the court to direct the finance minister not to interfere with the loading of new deductions on the Ministry of Finance’s payroll deductions management system, and also not to issue instructions that no new deductions may be loaded on the system.
Entrépo also asked the court to authorise the continued operation of the payroll deductions management system, until an application to review Shafudah’s decision to discontinue the system from the end of November and to stop the loading of new deductions on the system has been decided by the court.
After issuing her order on Friday, Prinsloo postponed the hearing of the application to review Shafudah’s decision to 6 March.
The deduction codes that the finance ministry wants to discontinue allow microlenders like Entrépo to have repayments of loans granted by them deducted directly from the salaries of government employees and paid to the lenders.
The discontinuation of deduction codes on the system is “irrational, irregular and reviewable”, and also unreasonable and disproportionate, Entrépo group chief executive Leonard Louw claims in a sworn statement filed at the court.
Louw says Entrépo, other holders of deduction codes, trade unions representing government employees and public service staff members themselves were not given an opportunity to make representations to the finance minister before a decision to discontinue the payroll deductions management system was taken.
In an answering affidavit, the director of expenditure and financial management in the department of state accounts of the finance ministry, Martinus Nakale, says current deductions loaded on the payroll deductions management system will continue after the end of November, when the finance ministry was set to take over the management of the system from the company Avril Payroll Deduction Management.
The company has been managing the system since 2003.
A notice about the discontinuation of deduction codes through the current payroll deductions management system from the end of November made it clear that deductions from government employees’ salaries for the repayment of current loans loaded on the system would continue until the loans have been paid off, Nakale says.
In another affidavit filed at the court, finance ministry executive director Michael Humavindu claims deduction code facilities in relation to microlenders “are unlawful in a number of material respects”.
Humavindu claims Avril Payroll Deduction Management is not registered by the Bank of Namibia as a payment service provider in terms of the Payment System Management Act, which he says makes it unlawful for the company to render a payment service
Humavindu says the current system is no longer necessary because the finance ministry now has the capacity and ability to make deductions from staff members’ salaries itself.
The ministry will save about N$11.5 million monthly if it no longer has to pay Avril Payroll Deduction Management for the services it is providing with regard to the system, Humavindu says.
Senior counsel Raymond Heathcote, assisted by Frank Pelser and Ramon Maasdorp and instructed by Shaun Ellis, is representing Entrépo Finance.
The finance minister is represented by Gerson Narib and Tinashe Chibwana, instructed by Janseline Gawises.
Johannesburg senior counsel Alistair Franklin, assisted by Shannon Quinn, represented Avril on instructions from Cobus Visser when arguments were heard by Prinsloo on 18 November.
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