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[2017] ZALCJHB 442
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Lephoto v National Institute for Humanities and Social Sciences and Another (JS274/16) [2017] ZALCJHB 442 (22 November 2017)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: JS 274/16
In
the matter between:
KIBITI
LEPHOTO
Applicant
and
THE
NATIONAL INSTITUTE
FOR
First
Respondent
HUMANITIES
AND SOCIAL SCIENCES
THE
MINISTER OF HIGHER EDUCATION
Second Respondent
AND
TRAINING
Argued:
30 October 2017
Delivered:
22 November 2017
JUDGMENT
MAMOSEBO,
AJ
[1]
The
applicant, Mr Kibiti Lephoto, approached this Court claiming that he
was subjected to an occupational detriment after he made
a protected
disclosure in terms of the Protected Disclosures Act
[1]
(the PDA). His grievance is that his dismissal was automatically
unfair, as provided for in section 187(1)(h) of the Labour Relations
Act
[2]
(the LRA). He seeks
re-instatement into his former position, alternatively, compensation
equivalent to 24 months’ remuneration
and costs of the action.
[2]
The first respondent, The National Institute for Humanities and
Social Sciences (NIHSS), is a public entity established in terms
of
section 38A of the Higher Education Act
[3]
(the HE Act) and the regulations
[4]
.
Its scope of application is to advance and co-ordinate scholarships,
research and ethical practice in the field of Humanities
and Social
Sciences within and through public Universities. The second
respondent is the Minister of Higher Education and Training
(the
Minister) joined to the proceedings because of a possible interest in
the matter and against whom no relief is sought. NIHSS
denies that
the applicant’s alleged disclosures constituted protected
disclosures as defined in section 1 of the PDA and
that his dismissal
had anything to do with the said disclosures. NIHSS further denies
that the dismissal was automatically unfair
or that the applicant is
entitled to the relief sought.
[3]
NIHSS has submitted that the Public Finance Management Act
[5]
(the PFMA) and the Treasury Regulations published in terms of the
PFMA are not applicable to this case. In its written submissions,
NIHSS explained that at its establishment it was understood that it
was a public entity as contemplated in Chapter 6 of the PFMA.
The
Chief Executive Officer, Professor Sara Mosoetsa (CEO), notified the
National Treasury as contemplated in section 46(2) of
the PFMA that
the public entity was not listed in Schedules 2 and 3 of the PFMA.
This submission was made in response to what was
pleaded by the
applicant in his Statement of Case pleading to the effect that
Deloitte Consulting (Pty) Ltd (Deloitte) a subsidiary
of Deloitte &
Touche, having been appointed as a financial service provider to the
NIHSS
,
will observe and comply with, among others, the PFMA and its
regulations.
[4]
In terms of section 1 of the Regulations for the Establishment of a
National Institute for the Humanities and Social Sciences
[6]
NIHSS means: ‘
The
National Institute for Humanities and Social Science established in
terms of section 38A of this Act
[7]
,
[Higher Education Act] and Regulation 2
’
.
[5]
The submission by Mr Roskam, appearing for the NIHSS, that the NIHSS
has not been listed in Schedule 2 and 3 of the PFMA and
therefore
does not fall under the PFMA and its Regulations, requires
closer scrutiny. The NIHSS Board approved the Supply
Chain Management
Policy (SCM) in its minutes of 09 November 2015 for deviation in
respect of values for approval by the CFO, CEO
and the Board.
Interestingly, the minutes read that the SCM policy and the
Delegation of Authority are based on principles and
aspects
encompassed and adopted in the report derived from the PFMA and
PPPFMA, BEE Act and the Higher Education Act (HE Act)
[8]
.
[6]
The adopted NIHSS SCM policy recognises the need, when contracting
for goods and services, to adopt a system which is fair,
equitable,
transparent and competitive as enjoined by section 217 of the
Constitution
[9]
. Reference is
also made to section 51 (1)(a)(iii) of the PFMA.
[10]
The NIHSS seems to be approbating and reprobating in the same breath.
This is inadmissible. The mere adoption of a policy which
recognises
and is founded on, among others, the Constitution and the PFMA, gives
credence to the application of the said legislation.
In any event,
the Constitution and its supremacy override any other legislation or
policy and practice that is inconsistent with
it. I therefore find
that the SCM Policy, the PFMA and the regulations are applicable to
NIHSS.
[7]
The issues that fall for determination are the following:
7.1
Whether the documents disclosed by the applicant constitutes a
disclosure and a protected disclosure in terms
of the PDA;
7.2
Whether the actions taken by the NIHSS against the applicant
(including NIHSS’s failure to formally
charge the applicant and
to hold a formal disciplinary enquiry) constituted an occupational
detriment as defined in section 1 of
the PDA;
7.3
Whether the dismissal of the applicant was automatically unfair in
terms of section 187(1)(h) of the LRA;
and
7.4
If the applicant’s dismissal was automatically unfair, whether
and to what extent the applicant
should be reinstated and/or
compensated.
Background
and evidence adduced
[8]
During 2014 the Minister entered into a 12 month’s contract
with Deloitte, as financial service provider to provide support
in
financial functions to NIHSS. This period was however extended by the
Minister to 30 May 2016. Deloitte’s responsibilities
included:
8.1
Managing a budget of about R52 457 170.00 meant for the
NIHSS activities;
8.2
Maintaining an integrated accounting system for all approved NIHSS
activities, utilising
standard accounting procedures, which will
ensure full documentation and recording of sources and uses of funds;
8.3
Preparing the financial management reports for all NIHSS activities;
8.4
Monitoring and ensuring that the financial management activities of
NIHSS are performed
in accordance with the PFMA, HE Act and Treasury
Regulations;
8.5
Reviewing and certifying receipts and cash transfer sheets regarding
procurement of goods
and services in line with the PFMA and Treasury
Regulations; and
8.6
Managing the NIHSS expenditures, including personnel costs and
ensuring full compliance
with PFMA, HE Act and Treasury Regulations.
[9]
The applicant, a qualified Chartered Accountant, was employed by
NIHSS, as its Chief Financial Officer (CFO) on 19 November
2014. His
duties as outlined in a document entitled “NIHSS
Executive Appointments” were to: Assist the
Accounting Officer
to discharge the duties prescribed in the PFMA
.
Develop and monitor the implementation of the financial
administration and accounting policies, systems and processes. Manage
the Institute’s budget in accordance with the relevant
prescripts. Ensure effective management of the Financial Management
Services, Supply Chain and Facilities Management Services and Risk
Management Services; to provide timely and accurate financial
and
operational information; and ensure strict adherence to the
Preferential Procurement Policy Framework Act
[11]
His employment contract was for a fixed period of five years with
effect from 05 January 2015, subject to a 12-month probation
period.
[10]
On 18 August 2015 the applicant maintains that he made a disclosure
in terms of the PDA to the Board of Directors of NIHSS
under the
head: “Disclosure of impropriety in terms of the Provisions of
the Public Finance Management Act, Public Service
Act, and The Code
of Conduct for Public Service and other prescripts.” The
applicant alleged that there was a ‘questionable
relationship’
between the NIHSS’s CEO, and Mr Slingsby Mda of Deloitte, which
undermined the Rule of Law pertaining
to her obligations in respect
of the Supply Chain Management at the NIHSS. On 24 August 2015 he
furnished further details pertaining
to the alleged impropriety to
the Chairperson of the Human Resources (HR) Committee of the Board.
The said disclosure was also
made to the Auditor-General. The
applicant maintains that he was automatically dismissed as a result
of the disclosure that he
made.
[11]
The case for the NIHSS is that the CEO was dissatisfied with the
applicant’s performance and conduct which were identified
as:
(a) failure to attend meetings; (b) late submission of reports; (c)
failure to provide feedback to the CEO and to act on her
instructions; (d) failure to bring important information to the CEO’s
attention; for example, the closing down of
the NIHSS bank
account and the state of the NSFAS account; his handling of the CEO’s
disbursement claims; questioning his
appointment to the Bid
Adjudication Committee (BAC) for the office space tender and his
participation in the BAC process and reports
emanating therefrom as
well as his role in the implementation of the payroll for NIHSS. The
CEO, following an enquiry by the Chairperson
of the Board, consulted
with an attorney on 18 August 2015 regarding the applicant’s
performance and conduct.
[12]
On 26 August 2015 the chairperson of the Board wrote an email to the
CEO directing her to obtain a legal opinion on whether
he can suspend
the applicant on full pay pending an investigation and for the fund
holders, (Deloitte Consulting]) to act as applicant.
The attorneys
advised NIHSS on 20 August 2015 to appoint an investigator to
investigate the concerns in respect of the CEO’s
allegations
against the applicant and the applicant’s allegations against
the CEO. It is common cause that two separate investigations
were
conducted. First, by Mr Charles Nupen (Nupen) and, secondly, by
Professor Rosemary Moeketsi, the Chairperson of the HR Committee.
The
applicant received a notice of intention to suspend him on 27 August
2015. A resolution was taken by the HR Committee of the
Board to
suspend the applicant on 31 August 2015. The CEO addressed a letter
of suspension to the applicant dated 01 September
2015.
[13]
The applicant took issue with the fact that Mr Nupen was addressed as
“advocate” whereas he is an admitted attorney.
The
applicant expressed a concern that Mr Nupen may not be independent
and fair. He also feared that the investigation will focus
on him and
not on the alleged improprieties. The NIHSS explained that
referring to Mr Nupen as an advocate was an administrative
error. The
Chairperson of the Board wrote Mr Nupen a letter dated 03 September
2015 headed: “NIHSS INVESTIGATION PROCESS”
:
which reads as follows:
“
On behalf of
the Board of the National Institute for Humanities and Social
Sciences, I would like to thank you in availing yourself
to help us
find a dignified way out of a very disturbing situation.
Please take this as
a first attempt to clarify the task at hand:
We would appreciate
a thorough investigation but also decisive advice on the options
available to our Board. Below are the initial
parameters in the two
parts that may define your investigation and your recommendations.
Dr Nthabiseng
Motsemme will be your resident host in the institute. She will
endeavour to make your work as trouble-free as possible….
PART A:
Investigation.
A1. Documents to be
studied:
·
The
founding documents of the Institute [NIHSS];
·
The
Minutes of its Board Meetings;
·
The
legal Advice Dr Mosoetsa has been given re- her relationship with the
CFO;
·
The
legal advice Dr Mosoetsa was given, re move of suspension;
·
The
original allegation of Impropriety;
·
The
response of the Chairman of the Board instituting the investigation;
·
The
response of the Chair of the HR Committee to Mr Lephoto [the
applicant];
·
The
response of Mr Lephoto to the Chair of the HR Committee; and
·
The
suspension correspondence and legal opinion.
A2. Interviews.
Primary Interview Respondents:
Dr Sara Mosoetsa (CEO) and Mr Kibiti
Lephoto (CFO)
Secondary Interview Respondents:
Prof. Ari Sitas
(Chair of the Board); Prof Rosemary Moeketsi (Chair of the HR
Committee); Mr Slingsby Mda (Deloitte and Touche –
NIHSS
fund-holder) and anyone that may be necessary, arising from the
documents and the primary interview respondents.
B.
Legal Opinion on the Way Forward to the HR Chair of the Institute
B1. An
Assessment of the Situation i.e the relevant Facts
Firstly, is there an irreconcilable
breakdown of trust between Dr Sarah Mosoetsa (the CEO of the
Institute) and Mr Kibiti Lephoto
(the CFO of the Institute);
Secondly, the CFO
sent a “disclosure of impropriety” letter to the Board,
alleging serious misconduct by the CEO. The
Board responded by
requesting substantiation of the allegations which elicited one such
submission to the Board.
Thirdly, the CFO
refused to authorise the payment of 127 service providers despite
instructions by the CEO to do so after the Board
authorised the
interim release of funds from its operational budget in consultation
with the DHET. This led the CEO (again after
legal opinion) to move
towards serving a suspension warning of the [CFO].
We would like the
investigator to listen to the respective allegations as well as
eliciting any other information necessary by speaking
to other
parties and inspecting any documentation of the NIHSS as necessary.
The investigator should then suggest a decisive way
forward.
B2. Options that
the Board must consider as necessary to the fulfilment of the
Institute’s mandate.
We look forward to
receiving your response.
Yours in
anticipation
Professor Ari
Sitas.”
[14]
The advice by Mr Nupen was that since the applicant was on probation,
there is a
prima facie
basis for the institute not to
confirm his appointment. There is also a basis to arraign the
applicant for a disciplinary enquiry.
He also advised the institute
to make the copy of his report available to the applicant and to
invite him to make representations.
The
disclosure by the applicant
[15]
In
Tshishonga
v Minister of Justice and Constitutional Development and Another
[12]
Pillay
J stated:
“
[176]
The PDA is conceived as a four-staged process that begins with an
analysis of the information to determine whether
it is a disclosure.
If it is, the next question is whether it is protected. The third
stage is to determine whether the employee
was subjected to any
occupational detriment and lastly, what the remedy should be award
for such treatment. It is not an enquiry
into wrongdoing about
whether the employee deserves protection. Structured in this way the
inclination to shift the emphasis from
the conduct and credibility of
the wrongdoer to that of the whistle-blower is real.”
[16]
Section 1 of the PDA defines disclosure as:
“
(i)
“disclosure” means any disclosure of information
regarding any conduct
of an employer or an employee of that employer,
made by any employee who has reason to believe that the information
concerned shows
or tends to show one or more of the following:
(a)
That
a criminal offence has been committed, is being committed or is
likely to be committed;
(b)
That
a person has failed, is failing or is likely to fail to comply with
any legal obligation to which that person is subject;
(c)
That
a miscarriage of justice has occurred, is occurring or is likely to
occur;
(d)
That
the health or safety of an individual has been, is being or is likely
to be endangered;
(e)
That
the environment has been, is being or is likely to be damaged;
(f)
Unfair
discrimination as contemplated in the Promotion of Equality and
Prevention of Unfair Discrimination Act, 2000 (Act No.4 of
2000); or
(g)
That
any matter referred to in paragraphs (a) to (f) has been, is being or
is likely to be deliberately concealed.”
[17]
The applicant’s claim is that he made disclosures pertaining to
the questionable relationship between the CEO
and Mr Mda and
the supply chain management. Deloitte was a service provider that
ought to have reported to the applicant as the
CFO in respect of
financial issues. Instead, the communication went directly to the
CEO. Several meetings were held between the
CEO and Mr Mda where he
as the CFO was absent. It is not surprising that the applicant was
concerned that various meetings involving
finances took place in his
absence.
[18]
The following extract of the meeting between the applicant and Mr Mda
and two other officials from Deloitte Consulting
on 07 August
2015 illustrates the applicant’s concern:
“
I proceeded
to ask him (Mda) about the e-mail that he had sent to the CEO in
which I was copied relating to the meeting that he
had with the CEO.
I wanted to know whether the meeting was an isolated incident of
their interaction or whether they did interact
on a regular basis. Mr
Mda agreed that the e-mail was the tip of the iceberg [and], that he
regularly communicated with the CEO
through e-mail, telephone,
meetings, that they were on a first name basis, that he saw nothing
wrong in the relationship…”
[19]
Of further relevance to ostensibly lend support for the allegation by
the applicant that the relationship was questionable
related to the
shifting of funds, R10 Million, from operation funds to projects and
scholarships. Mr Mda was asked by the CEO to
prepare a letter to the
Board seeking authority to shift those funds. The letter was signed
by the Chairperson of the Board on
12 August 2015. The applicant only
saw a copy of the letter, not given to him by the Board or the CEO,
but by Ms Anita Rama, an
employee of Deloitte, on 20 August 2015.
[20]
What remains inexplicable is that while the applicant’s terms
of employment
(see para 5 (above))
requires that he comply with the specified prescripts the memo
dated 03 September 2015 is
telling. The CEO communicated with
Deloitte and copied the entire NIHSS team, without addressing this
aspect which squarely falls
under the applicant’s domain, to
jointly seek a solution. It reads:
“
Attached is
a list of payments that have not been paid due to the following
reasons:
·
The
Payment Authorisation Sheets have the comment ‘NSF Funds not
yet received’ and signed by the CFO. The payments are
not
authorised for payment.
·
Payments
held back and not authorised by the CFO
·
Payments
received during the CFO suspension period and not paid
The Board has authorised the temporary
use of operational funds to pay for NSF projects until the NSF funds
are received.
I hereby authorise
Deloitte to pay the attached list of payments using our operational
funds.”
[21]
The applicant stated that although Deloitte Consulting’s
contract was meant to be for 12 months, ending September 2015,
a
whistle-blower informed him that they (Deloitte team) were planning
to retain the contract for a further three years. They will
succeed
by getting rid of the applicant. This allegation by the whistle
blower, contended the applicant, was supported by the fact
that they
had extended their areas of work and added 6 new areas. These were
also discussed in his absence. He made reference to
this in the
disclosure. Some of the functions performed by Deloitte fell under
his responsibilities and he was concerned that his
position would
become redundant. Of even greater concern to the applicant was an
email by Moses Katende, an employee of Deloitte,
addressed to the
applicant on 13 July 2015 mentioning that the CEO had endorsed the
commencement of the opening balance work with
CEPD. This allegation
was not rebutted. Despite the fact that the applicant was also
promised to be furnished with proof of authorisation
of the extension
of the Deloitte contract, it was not forthcoming, which rendered it
an irregularity.
[22]
It is clear that the CEO and Mr Mda had more than one meeting during
which financial matters were addressed in the absence
of the
applicant. This is sinister, particularly in that the applicant has
the responsibility in terms of his job description to
advise the CEO
on financial matters. This also had the potential to cause animosity
in relationships.
[23]
In as far as the determination whether or not the disclosure is
protected or not, section 9 of the PDA sets
out
the criteria that must be met: Section 9 stipulates:
“
9 (1)
Any disclosure made in good faith by an employee –
(a)
Who
reasonably believes that the information disclosed, and any
allegation contained in it, are substantially true; and
(b)
Who
does not make the disclosure for purposes of personal gain, excluding
any reward payable in terms of any law;
Is protected disclosure if –
(i)
one
or more of the conditions referred to in subsection (2) apply; and
(ii) in all circumstances of
the case, it is reasonable to make the disclosure.
(2)
The conditions referred to in
subsection (1)(i) are –
(a) that at the time the employee who
makes the disclosure has reason to believe that he or she will be
subjected to an occupational
detriment if he or she makes a
disclosure to his or her employer in accordance with section 6;
(b) that in a case where no person or
body is prescribed for purposes of section 8 in relation to the
relevant impropriety, the
employee making the disclosure has reason
to believe that it is likely that evidence relating to the
impropriety will be concealed
or destroyed if he or she makes the
disclosure to his or her employer;
(c) that the employee
making the disclosure has previously made a disclosure of
substantially the same information to
–
(i)
his or her employer; or
(ii)
a person or body referred to in section 8,
In respect of which
no action was taken within a reasonable period after the disclosure;
or
(d)
that
the impropriety is of an exceptional nature”.
[24]
The Labour Appeal Court has summarised these requirements in the case
of
Malan
v Johannesburg Philharmonic Orchestra
[13]
as
follows
:
“
There must
be a disclosure; the disclosure must be made in good faith; the
disclosure must concern an impropriety, either a criminal
offence or
that a person has failed, is failing or is likely to fail to comply
with any legal obligation to which that person is
subject; it must be
reasonable for the employee to make the disclosure; and, that one or
more of the conditions referred to in
subsection 9(2) must be
satisfied – for present purposes, any one of them is
sufficient. Where the disclosure is made to
the employer subsection
(c) which is relevant for the present purposes provides that the
employee making the disclosure must have
previously made a disclosure
of substantially the same nature to his or her employer”.
[25]
In
CWU
v Mobile Telephone Networks (Pty) Ltd
[14]
Van
Niekerk AJ (as he then was) pronounced
:
“
It does not
necessarily follow though that good faith requires proof of the
validity of any concerns or suspicions that an employee
may have, or
even a belief that any wrongdoing has actually occurred. The purpose
of the PDA would be undermined if genuine concerns
or suspicions were
not protected in an employment context, even if they later prove to
be unfounded.” See also
H
& M Limited
[15]
;Randles
v Chemicals Specialities Ltd
[16]
.
[26]
In dealing with the reasonableness of the employee’s belief,
Mlambo JP said the following in the
State
Information Technology case
[17]
“
for a
disclosure to qualify for protection it must show that the employee
reasonably believed that the information disclosed and
any allegation
contained in it was substantially true.”
[27]
The applicant raised concerns pertaining to a lack of compliance with
SCM Systems. The irregularity also related to employing
personnel
responsible for supply chain management. On 11 August 2015 this
letter was addressed to the CEO by the applicant:
“
Dear CEO
It is common
knowledge that procurement in the public sector is regulated by
statute. The design, location and roll out of Supply
Chain Management
System is prescribed in public sector prescripts. As I pointed out on
numerous occasions, the prescripts
are applicable to the NIHSS
as well. Your refusal to allow and implement Supply Chain Management
in a manner required by the PFMA
(as per my recommendation) has
serious financial and legal implications. It also places a severe
limitation on my scope of work
and makes it impossible for me to
perform my responsibilities as they relate to Supply Chain
Management. I hope that you will reconsider
your decision and fulfil
the legal obligation in this regard.”
While
the CEO’s response to the applicant was to claim ignorance of
what was referred to, one cannot fully comprehend this
response
because the CEO’s earlier communication is indicative of the
fact that the NIHSS policy processes resonated with
her.
[28]
The applicant testified that he was under a duty in terms of the
PFMA, as a senior manager, to report irregularities of which
he
encountered several. This duty transcends to him as a professional
Chartered Accountant as well. This duty applies equally to
senior
managers in government.
[29]
As stated earlier, the applicant’s case is that he disclosed
the impropriety on
these
grounds: First, the questionable relationship between the CEO and Mr
Mda as well the CEO’s undermining of the rule of
law by
disregarding her legal obligations relating to Supply Chain
Management at the NIHSS. In my view, the applicant had a reasonable
suspicion which warranted an investigation. The law is clear that he
does not need to prove the truth thereof. I am therefore satisfied
that the applicant has made a disclosure as contemplated in section
1(i)(b) of the PDA.
Is
the disclosure protected
?
[30]
Section 1(ix) of the PDA defines a protected disclosure as a
disclosure made to:
(a)
a
legal adviser in accordance with section 5;
(b)
an
employer in accordance with section 6;
(c)
a
member of Cabinet or of the Executive Council of a province in
accordance with section 7;
(d)
a
person or body in accordance with section 8; or
(e)
any
other person or body in accordance with section 9;
but does not include a
disclosure –
(i) in respect of which
the employee concerned commits an offence by making that disclosure;
or
(ii)
made by a legal adviser to whom the information concerned was
disclosed in the course of obtaining legal advice in accordance
with
section 5.
[31]
In
Radebe
and Another v Premier, Free State Province and Others
[18]
Mlambo
JP remarked:
“
[20]
Broadly, s 1 contains two qualifying requirements for a disclosure
that will be regarded as protected in terms of the PDA.
These are
that the employee making the disclosure must have ‘reason to
believe’ that the information disclosed ‘shows’
or
‘tends to show’ that an impropriety has been committed or
continues to be perpetrated. These are the general requirements
found
in s 1 in terms of which all disclosures have to comply in addition
to the specific requirements found in the particular
section within
which the disclosure is sought to be located.”
[32]
An employee who makes a protected disclosure contemplated in section
4 (2) of PDA is protected from dismissal. In
State
Information Technology Agency (Pty) Ltd v
Sekgobela
[19]
Mlambo
JA (as he then was) pronounced:
“
[28] What
has to be determined is whether the disclosure was made in good faith
by the respondent, that he reasonably believed that
the wrongdoing he
disclosed fell within matters which, in the ordinary course, are
dealt with by the appellant and that the information
he disclosed is
substantially true. An affirmative answer to these questions means
that disclosure was protected.”
[33]
The applicant reported the impropriety to the NIHSS Board. There was
no evidence proving that the disclosure was not made in
good faith
and that the applicant reasonably believed that there was wrongdoing.
The applicant did not make the disclosure for
his personal gain. I am
therefore of the view that the disclosure accords with sections 1
(ix) and 6 of the PDA. It follows that
this was a protected
disclosure as contemplated in the PDA.
Was
the applicant subjected to any occupational detriment?
[34]
Mlambo JP in the
Radebe
judgment
[20]
explains
occupational detriment as follows:
“
[18]
An occupational detriment is defined in section 1 by reference to a
number of instances that could
occur in the employment environment
arising from the making of a disclosure by an employee. For purposes
of this judgment, the
following instances are relevant: subjecting an
employee to any disciplinary action; dismissing, suspending,
demoting, harassing
or intimidating an employee. Furthermore, the
wrongdoing targeted by the PDA is referred to as an ‘impropriety’.
This
is defined as any conduct falling within any of the seven
instances of wrongdoing …. the so-called seven types of
improprieties.”
[35]
Strikingly, the date of the disclosure is 18 August 2015 and nine
days later, on 27 August 2015, the applicant was served with
a notice
of his suspension and subsequently suspended on 01 September 2015.
[36]
Finally, there was the alleged failure by the applicant to make
payment in respect of 127 invoices. However, the chronological
consideration of the invoices shows that he endorsed on each of them
that payment cannot be made because of insufficient funds.
Why the
CEO did not engage him directly on this aspect to jointly seek a
solution including shifting funds that was subsequently
resorted to,
is incomprehensible. It is evident that the CEO communicated on 11
August 2015 with an employee of Deloitte
informing her that
the Board has approved shifting the funds. The applicant was merely
copied in that communication. On 12 August
2015, the Chairperson of
the Board wrote to Mr Mda confirming such approval
.
The
applicant is once more overlooked in this process. However, on 17
August 2015 an employee of Deloitte writes to the applicant
asking
him to authorise payment. He responds that the last date he was
involved in the payments was 16 July 2015. He only received
the
approval letter by the Board on 20 August 2015 from an employee of
Deloitte. Although mention is made by the CEO of the 127
unpaid
invoices, there were in actual fact only 39 which she (the CEO)
subsequently authorised payment of on 25 August 2015. This
aspect of
unpaid invoices was actually moot. The Chairperson of the Board wrote
to the CEO on 28 August 2015 asking her to seek
a legal opinion on
whether he can suspend the applicant with full pay pending an
investigation and request Deloitte to act as CFO.
It was argued by Mr
Roskam that the applicant contradicted himself in evidence when he
said he only became aware of the letter
on 20 August 2015 whereas he
had written an email to the CEO on 26 August 2015 alleging that he
was not aware of the approval for
the shifting of funds. In my view,
this does not change the fact that he was made aware of the letter
not by the CEO or the board
but by Ms Rama of Deloitte.
[37]
If the NIHSS deemed it necessary to have the conduct of the applicant
investigated as a precursor to a disciplinary process
it is
incomprehensible why the process was not embarked on earlier. It is
inexplicable why the NIHSS waited for the disclosure
before they
pursued the investigation route. In my view, the terms of reference
furnished to Mr Nupen were convoluted. The investigation
of the
disclosure should have been confined to the allegations of
impropriety. There is a clear nexus between the disclosure and
the
applicant’s dismissal. In any event, a mere suspicion or
perception of bias or partiality on the part of Mr Nupen was
sufficient to demand of the NIHSS to replace him, as investigator,
with someone who was independent and impartial
.
In any event, the applicant had never been the subject of a
disciplinary enquiry.
[38]
The preamble to the PDA places a responsibility on every employer to
take all necessary steps to ensure
that
employees who disclose such information are protected from any
reprisals as a result of such disclosure.
[39]
It must be borne in mind that the appointment of the applicant and
his responsibilities, among others, were to ensure effective
management of the Financial Management Services, Supply Chain
and Facilities Management Services and Risk Management Services;
to
provide timely and accurate financial and operational information; to
ensure strict adherence to the Preferential Procurement
Policy
Framework Act
[21]
Undoubtedly,
as evinced from the communication between the CEO and the Department
of Higher Education and Training both the CEO
and the applicant
accepted that the PFMA and the Treasury Regulations applied to the
NIHSS. That being the case, the concerns by
the applicant were
legitimate.
Mlambo
JP’s remarks in the
Radebe
judgment
[22]
are helpful in this regard.
[40]
I am satisfied that on the balance of probabilities the applicant’s
suspension and later dismissal was a consequence
of his protected
disclosure and therefore that he endured an occupational detriment.
Was
the dismissal automatically unfair?
[41]
Section 187(1)(h) of the LRA stipulates:
“
(1)
A dismissal is automatically unfair if the employer, in dismissing
the employee, acts contrary
to section 5 or, if the reason for the
dismissal is –
…
..
(h)
a
contravention of the
Protected Disclosures Act, 2000
, by the
employer, on account of an employee having made a protected
disclosure defined in that Act.”
[42]
The Labour Appeal Court in
Sekgobela
[23]
said
the following
:
“
[15]
In cases where it is alleged that the dismissal is automatically
unfair, the situation is not much different
save that ‘the
evidentiary burden to produce evidence that is sufficient to raise a
credible possibility that an automatically
unfair dismissal has taken
place rests on the applicant [employee]. If the applicant succeeds in
discharging his evidentiary burden
then the burden to show that the
reason for the dismissal did not fall within the circumstances
envisaged by s 187(1) of the LRA
rests with the {employer]. It is
evident therefore that a mere allegation that there is a dismissal is
not sufficient but the employee
must produce evidence that is
sufficient to raise a credible possibility that there was an
automatically unfair dismissal.”
[43]
It is the applicant’s case that his dismissal was as a result
of the disclosure he made. To the contrary, the NHISS alleged
misconduct on the applicant’s part pertaining to his failure to
authorise payment of invoices and the irreparable trust relationship
between the CEO and the applicant) as NHISS’s reason for his
dismissal. Even if it could be assumed or accepted for a moment
that
the dismissal was as alleged by the NHISS, it must still prove that
the dismissal was for a fair reason and was preceded by
a fair
procedure, which is not the case
.
[24]
.
To
determine the true nature of the dismissal, the Labour Appeal Court
provided guidelines on the enquiry to be followed in
SACWU
and Others v Afrox Limited.
[25]
It
is essential to show both the factual and the legal causation. While
the NHISS alleged misconduct against the applicant, no disciplinary
enquiry was conducted. I am inclined to even think that the alleged
misconduct was brought up to obfuscate the investigations and
to
derail the process. There was no basis to suspend or dismiss the
applicant. I therefore find that the dismissal was automatically
unfair as contemplated in section 187(1)(h) of the LRA.
[44]
The applicant has, in my view, established a
prima
facie
case for the relief sought. I must point out that the NIHSS had the
option to call Mr Mda, Katende, the Chairperson of the Board,
the
Chairperson of the HR Committee of the Board and Mr Nupen as
witnesses but chose not to. I am therefore of the view that an
adverse inference under these circumstances can be drawn that the
NIHSS feared that their evidence will expose facts that are
unfavourable to it.
[26]
On
the evidence testified to by the applicant where the NIHSS witnesses
failed to rebut same I accept such evidence as true
and reliable.
[45]
The applicant is seeking to be re-instated to his previous position
with retrospective effect to the date of dismissal. I am
of the view
that the CEO did not afford the applicant an opportunity to function
effectively as the CFO supporting the CEO in carrying
out her
responsibilities and serving the NIHSS. Their working relationship
was clouded and obstructed by the role that Mr Mda played
whilst he
may have been on a frolic of his own. I do not believe the trust
relationship has been broken. The following are instructive
remarks by Mlambo JP in
Radebe
[27]
.
“
By way of
relief, it appears justified to award the appellants full relief that
restores the status quo ante between them and their
employer which
will go a long way towards addressing the humiliation they suffered
arising from the occupational detriment they
suffered. Such relief is
justified in view of the fact that they blew the whistle on what was
at face value irregular conduct by
their employer and fellow
employees. The action taken against them was precipitate and totally
unjustified. The full redress proposed
is enough to express our
displeasure at how the appellants were treated. It should also send a
clear message to other employers
that this court will not hesitate to
come to the aid of the employees who blow the whistle on unlawful
and irregular conduct.
It is also justifiable under the circumstances
to award the appellants costs.”
[46]
In
Chemical
Energy Paper Printing Wood & Allied Workers Union & Another v
Glass & Aluminium 2000 CC
[28]
the
Labour Appeal Court stated the following:
“
[44] In
considering these issues, it is necessary to bear in mind the
provisions of s 194(3). They read thus:
‘
The
compensation awarded to an employee whose dismissal is automatically
unfair must be just and equitable in all the circumstances
but not
more than the equivalent of 24 months’ remuneration calculated
at the employee’s rate of remuneration on the
date of
dismissal.’”
I
therefore find that the applicant should be compensated for 12
months.
Costs
[47]
Counsel for the applicant motivated for costs including costs of a
senior counsel. I agree that this application was of a sufficiently
complex nature and importance to justify such an order.
[48]
In the circumstances, the following order is made:
Order
1.
The
dismissal of the applicant was both procedurally and substantively
unfair.
2.
The
applicant is reinstated with effect from 4 January 2016 being the
date of his dismissal.
3.
The
first respondent, the National Institute for Humanities and Social
Sciences, is ordered to pay the applicant 12 months’
compensation, an equivalent of 12 months’ salary subject to
statutory deductions payable within 30 days from the date of
this
order.
4.
The
first respondent is ordered to pay the applicant’s costs which
costs shall include costs consequent upon the employment
of senior
counsel.
_________________
M C Mamosebo
Acting
Judge of the Labour Court of South Africa
Appearances:
For
the Applicant:
Advocate HvR Woudstra SC
Instructed
by:
Motla Conradie Inc
c/o
Uys Jordaan Attorneys
For
the Respondent:
Mr A Roskam
Instructed
by:
Haffegee Roskam Savage Attorneys
[1]
Act
26
of 2000.
[2]
Act
66
of 1995 as amended.
[3]
Act
101
of 1997.
[4]
GNR No. 952 of 05 December 2013 (GG
37118).
[5]
Act 1 of 1999.
[6]
Government Gazette
37118
No 952 dated 5
December 2013.
[7]
S
ection
38A
of the
Higher Education Act, 101 of 1997
, is substituted by section
2 of the Higher Education and Training Laws Amendment Act, 23 of
2012, (Government Gazette No 36022
dated 19 December 2012).
Substitution
of section 38A of Act 101 of 1997, as inserted by section 3 of Act
38 of 2003
2.
The following section is hereby substituted for
section 38A
of the
Higher Education Act, 1997
:
Establishment
of national institute for higher education
38A.
(1)
The Minister may, after consultation with the Council on Higher
Education, establish a national institute for higher education
as a
juristic person [in Mpumalanga and in the Northern Cape] with a
specific scope or application.
(2)
A national institute for higher education is managed, governed and
administered by a board.
(3)
If the Minister establishes a national institute for higher
education in terms of subsection (1), the Minister must
prescribe
particulars of the establishment of the national institute for
higher education, its board and its specific scope or
application in
the Government Gazette.
[8]
[9]
The Constitution of the Republic of
South Africa, 1996, as amended.
[10]
51. General responsibilities of
accounting authorities. –
(1)
An accounting authority for a public entity –
(a)
must ensure that that public entity has and maintains –
(iii)
an appropriate procurement and provisioning system which is fair,
equitable, transparent, competitive and cost-effective.
[11]
Act 5 of 2000.
[12]
2007
(4) SA 135
(LC); [2007] 28 ILJ 195 (LC) at para 176.
[13]
(JA61/11)
[2013]
ZALAC 24
(12 September 2013 at para 29.
[14]
(2003) 24 ILJ 1677 (LC) at para 21.
[15]
(2005) 26 ILJ 1737 at 1738B.
[16]
[2010] 7 BLLR 730 (LC).
[17]
(2012) 10 BLLR
1001
(LAC) at para 32.
[18]
(2012) 33 ILJ 2353 (LAC) at 2366 para
20.
[19]
(2012) 33 ILJ 2374 (LAC) at 2384 para
28.
[20]
Supra
at
2366 para 18.
[21]
Act 5 of 2000.
[22]
At 2373 para 40C.
[23]
Supra
at
2380 para 15.
[24]
See
Pedzinski
v Andisa Securities (Pty) Ltd
2006]
2 BLLR 184 (LC).
[25]
[1999] 10 BLLR 1005
(LAC) at 103G –
104P.
[26]
See:
TshishongaSupra
)
at 156 para
[27]
Supra
at
2373E – G para 41.
[28]
(2002) 23 ILJ 695 (LAC) at 707I –
J para 44.