Entrépo’s court battle over Govt payroll deductions on hold until November

The Windhoek High Court has postponed a case in which Entrépo Finance is challenging the government’s decision to end its payroll deductions system. The hearing of an urgent application in which the microlending company is suing the minister of finance, the prime minister and various other parties in an attempt to stop a plan to discontinue the government’s payroll deductions management system has been postponed for a month. The hearing, which was scheduled to take place in the Windhoek High Court on Friday (17 October), was postponed to 18 November on Friday, in terms of an agreement between lawyers involved in the matter. Entrépo Finance filed an urgent application against the minister of finance and 36 other respondents in the Windhoek High Court on 30 September. In the application, the company is asking 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 is also asking the court to authorise the continued operation of the payroll deductions management system with effect from 29 August, until an application to review finance minister Ericah Shafudah’s decision to discontinue the system from the end of November and to stop the loading of all new deductions on the system has been decided by the court. The deduction codes that are being discontinued 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. According to Louw, 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. Entrépo required respondents opposing its application to file answering affidavits at the court by 10 October. An answering affidavit on behalf of the minister of finance was filed only during the evening of 16 October, though. In the answering affidavit, the director of expenditure and financial management in the Department of State Accounts of the Ministry of Finance, Martinus Nakale, says current deductions loaded on the payroll deductions management system will continue after the end of November, when the finance ministry is set to take over the management of the system from the company Avril Payroll Deduction Management. Nakale also says the finance ministry has been allowing new deductions that comply with legal requirements to be loaded onto the system after an engagement with affected parties on 16 September. 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. According to Nakale, the orders that Entrépo wants the court to make would not be lawful, as current deductions for the repayment of loans given by microlenders do not comply with the Labour Act and with standards published in 2020 in terms of the Microlending Act of 2018.