THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: PA 14/24
In the matter between
MEC FOR SOCIAL DEVELOPMENT Appellant
and
ZIMISELE ARNOT SAM First Respondent
MNYAMEZELI BOMENI Second Respondent
PUBLIC HEALTH AND SOCIAL DEVELOPMENT
SECTORIAL BARGAINING COUNCIL Third Respondent
DUMISANI SONAMZI N.O . ` Fourth Respondent
CHANTEL WILLIAMS Fifth Respondent
Heard: 22 May 2025
Delivered: This judgment was handed down electronically by circulation to the
parties’ representatives by email, publication on the Labour Appeal Court website and released to SAFLII. The time and date fo r hand- down is deemed to be 26 June
2025.
Coram Nkut ha-Nkontwana JA , Mahalelo et Tokota AJJA
2
JUDGMENT
TOKOTA , AJA
Introduction
[1] The first respondent is an employee of the appellant (the Department) , and
the second respondent is an employee of the D epartment of Health. B oth the first
and second respondents applied for the position of Director: Employee Relationship,
Wellness and Health Programmes within the D epartment . After the respondents
were interviewed, they were subsequently disqualified from appointment to the
position. They then declared a dispute of unfair labour practice relating to promotion.
The dispute was referred to the Public Health and Social Development Bargaining
Council (the Bargaining C ouncil).
[2] After the dispute of unfair labour practice was referred to the Bargaining
Council , the arbitrator found that the D epartment had committed no unfair labour
practice. The arbitration award was challenged in the Labour Court , which found that
the Department had committed an unfair labour practice in respect of the first
respondent. With leave of the Labour Court, the D epartment now appeals against
the whole of the judgment and order thereof.
Factual Background
[3] On 17 September 2017, the post of Director: Employee Relationship, Health
and Wellness Programmes was advertised by the D epartment. Both respondents
applied for the position.
[4] Both respondents were shortlisted in the recruitment process. On 2 March
2018, they were interviewed. The first respondent scored the best results and the
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second respondent came second. In terms of the personnel suitability checks , they
were required to undergo a process in terms of which the D epartment was obliged to
verify the following areas , namely , their respective criminal records, finance records,
citizenship, qualifications, reference checks, licence and d irectorships.
[5] The verification tests were done by an independent company called MIE. On
12 April 2018, a report was submitted to the Department in which it was stated that
the fir st respondent was an active d irector of the following institutions: ( i) Ijelo
Labafazi , which was compliant and in business as per the CIPC; (ii) Izigodlo
Khanyisa Agricultural and Multi -Purpose Primary Co- Operative Limited, which was
also compliant and in business; and (iii) Zmish Trading Enterprise, which was at the
final stages of deregistration. It was also discovered that when the second
respondent completed his Z83 application form, he had indicated that he had no
previous criminal convictions . The first respondent did not disclose his financial
interests as required by the prescripts.
[6] The abovementioned revelations resulted in them being disqualified from
consideration for the appointment s. It was then decided to proceed by way of
headhunting for the post. The headhunting process culminated in the appointment of
the fifth respondent to the position .
[7] The respondents referred a dispute of unfair labour practice relating to
promotion to the Bargaining Council for conciliation, mediation and arbitration. The
conciliation failed and the matter was then referred to arbitration. On 14 May 2019 ,
the arbitrator issued an award in favour of the Department , having found that the
Department had committed no unfair labour practice. Consequently, so the arbitrator
found, the respondents were correctly disqualified for appointment to the position.
[8] Both respondents instituted proceedings in the Labour Court seeking an order
reviewing and setting aside the award. The Labour Court reviewed and set aside the
award.
[9] There was a faint challenge that the presence of one Mr Collins on the
headhunting panel was improper in that he was at the time at the level of middle
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management and not on the level of a Director. Since we are not here dealing with
the appointment of the fifth respondent, I need not deal with this challenge in that ,
even if it was improper, though this is denied, the respondents lacked locus standi to
challenge that. This process was conducted after they had been disqualified. In any
event , Mr Collins was already promoted to the rank of Director at the stage when the
recommendations for the appointment of the fifth respondent were signed.
Review proceedings in the Labour Court
[10] The respondents instituted review proceedings challenging the
reasonableness of the arbitration award and sought an order reviewing and setting
aside the award. The Labour Court found that, in respect of the first respondent, the
Department had committed an unfair labour practice and ordered that he be instated
to the position of Director: Employee Relationship, Health and Wellness
Programmes. The Labour Court further ordered that the D epartment pay the first
respondent all of the remuneration to which he was entitled in terms of the
instatement order , together with costs of the application. With regard to the second
respondent, the Labour Court held that he had produced no reason justifying the
review and impliedly dismissed his application.
[11] The Labour Court found that the Department was not entitled to disqualify the
first respondent because he had made the disclosure of his interests to a
subordinate of one Mr Zenzile, a Director in the D epartment . It held that even if the
first respondent did not make a disclosure, he had established that failure to disclose
such interests did not justify his disqualification
[12] The Labour Court held further that the legislation on which the arbitrator
based his decision was irrelevant. It held that the relevant policies did not require the
first respondent to make any disclosure of financial interests. It held further that if the
Department was of the view that financial disc losure should have been made, its
remedy was to institute a disciplinary process against the first respondent . It held
that in the absence of a statutory or cogent reason for the non- appointment , the
arbitrator’s award was not reasonable and had to be reviewed and set aside.
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Parties’ submissions
[13] Counsel for the appellant submitted that the findings of the Labour Court , on
which it based its conclusion, were erroneous and not supported by the evidence of
the first respondent. I agree. The appellant contended that t he first respondent
testified that he had no financial interest to disclose. He testified that in any event , he
had no obligation to disclose anything because according to him ‘ the disclosure is
not a requirement for recruitment ’. Counsel submitted that the decision of the Labour
Court was not supported either by the evidence led at the arbitration or by legislation.
Consequently, so the argument went, the appeal ought to succeed.
[14] Mr Mama Java, for the first respondent , contended that the appeal should fail.
He submitted that the Labour Court was correct in its decision. He supported the
view of the first respondent that he had nothing to disclose. He contended that there were no companies in which he (the first respondent ) had a financial interest. If there
were such companies , the first respondent did in fact disclose his interest. This latter
part of the argument cannot be found in the evidence that was led at the arbitration.
[15] Mr Java blew hot and cold in that , at some stage, he submitted that there was
nothing to disclose. He contended that the first respondent was not a Director of any
company. He could not explain the results of the CIPC reports, which revealed that
there were three companies , of which the first respondent was a Director. He
conceded, however , that the first respondent was a Director of Ijelo Labafazi , which
was a non -profit organi sation. He conceded further that there may be a financial
interest in the organi sation because the directors are entitled to monthly stipends. He
persisted, however, that there was no obl igation on the first respondent to disclose
anything to the D epartment because he was not deriving any financial benefit from
Ijelo labafazi .
Discussion
[16] The main issue for determination is whether the first respondent was a
Director of any company and, if so, whether he had an obligation to disclose his
financial interests therein. I find that the first respondent was a Director of three
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companies , one of which was on the verge of being deregistered. It is common
cause or not seriously disputed, that he failed to disclose his financial interests
therein during the financial year 2017/2018. This Court must then decide whether
there were any prescripts in terms of which he was obliged to disclose his financial interests. The Court must also make a finding as to whether , in the light of his failure
to disclose his financial interests, the Department was entitled to disqualify him from
being appointed to the position.
[17] It is trite that the appellate court will not interfere with findings of fact by a
lower court , as they are presumed to be correct. It follows that it is not op en to this
Court to depart from findings of fact by the C ourt a quo merely on the grounds that
this Court considers the finding s to be wrong or that the C ourt a quo has misdirected
itself in a material way or that it has based its findings on a misconception. It is only
when there is no evidence, as in this case, which could reasonably support a finding
of fact or where the evidence is such that a proper evaluation thereof leads
inexorably to the conclusion that no reas onable Court could have made such a
finding.
1 In that event , then this Court will be entitled to interfere.
[18] Where it has been demonstrated, through the recorded evidence, that the
findings of fact by the court a quo constitute material misdirection and are wrong, the
appellate court is entitled to make its own findings based on the recorded evidence.2
I find that the court a quo erred in finding that the first respondent disclosed his
financial interests during the year in which he was supposed to do so. I hold further
that the Labour Court erred in finding that there was no legislation requiring a disclosure of financial interests. This Court is therefore at large to make its own findings based on the recorded evidence and prescripts of the D epartment.
Legal prescripts relating to financial disclosure Senior Management S ervice Handbook
1 Betha and Others v BTR Sarmcol (A Division of BTR Dunlop Ltd ) (1998) 19 ILJ 459 (SCA) at 473F -
G.
2 S v Hadebe and Others 1997 (2) SACR 641 (SCA) at 645E - F. See: Commissioner for Inland
Revenue v Strathmore Consolidated Investments Ltd 1959 (1) SA 469 (A) at 475 et seq; Secretary for
Inland Revenue v Trust Bank of Africa Ltd 1975 (2) SA 652 (A) at 666B --D.
7
[19] In terms of paragraph 8.2 of the Senior Management Service Handbook (SMS
Handbook) applicable to s enior members of the service: ‘[m]embers of the SMS are
also required to disclose their financial interests ’.
[20] Regulation 11 provides: ‘An employee shall abide by and strive to be familiar
with all legislation and other lawful instructions applicable to his or her conduct and
official duties ’.
[21] Regulation 18 provides that ‘SMS members, except for a head of department
shall, not later than 30 April of each year, disclose to the relevant head of
department, in a form prescribed for this purpose by the Minister, particulars of all his or her interests in respect of the period 1 April of the previous year to 31 March of the year in question ’.
[22] Regulation 19 provides:
‘The following details of interests shall be disclosed;
(a) Shares, loan accounts or any other form of equity in a registered
private or public companies and other corpor ate entities recognised by law
(i) The number, nature and nominal value of shares of any type in any
public or private company and its name; and
(ii) other forms of equity, loan accounts, and any other financial interests
owned by an individual or held in any other corporate entity and its name.
(b) Income generating assets
(i) A description of the income generating asset ;
(ii) the nature of the income; , and
(iii) the amount or value of income received.
… (d) Directorships and partnerships
(i) The name, type and nature of business activity of the corporate entity
or partnership; and
(ii) if applicable, the amount of any remuneration received for such
directorship or partnership. ’
8
[23] It is common cause that the first respondent falls within the category of
employees required to disclose their financial interests in terms of the SMS
Handbook .
Determination and Directive by the M inister in terms of s 41(3) of the P ublic Service
Act, Proclamation 103 of 1993, read with R egulations 16(c) and 18(3)
[24] In terms of s 41(3) of the Public Service Act3 (the Act) ‘ the Minister may issue
directives which are not inconsistent wi th this Act to elucidate or supplement any
regulation ’. By means of a d irective dated 16 March 2017 as envisaged in s 41(3) of
the Act read with Regulation 16(c) and 18(3) of the Public Service Regulations ,
20164, the M inister , by directive dated 16 March 2017, directed that designated
employees , who included the respondents , must disclose their financial interests
using the financial disclosure form for each financial year for the period 1 April of the previous financial year to 31 March of the financial year in question.
[25] In light of these prescripts , the Labour Court erred in holding that ‘ [t]he
legislation [which] the arbitrator based his decision on is irrelevant’ .
[26] Failure to make proper disclosure, as required by the prescripts , strikes at the
very core of employment and/or the promotion of employees into senior positions.
The objectives of the financial disclosure f ramework , as introduced in 2001, were to
assist the Executive Authorities in identify ing and managing conflict s of interest
amongst employees in Senior Management positions. It is a tool through which the
Executive Authority can promote open and accountable government as espoused in
s 195(1) of the Constitution. The scourge of corruption bedevilling this country can
be minimised only if proper monitoring of managerial employees is enhanced.
[27] Accordingly, failure to disclose financial interests in circumstances where the
employee knew or ought to have known that such information was material and the employer would rely on such disclosure or non- disclosure in appointing him/her to a
higher position, then such deliberate act of non- disclosure must amount to a
3 Proclamation No.103 of 19 94.
4 GN 877 of 2016: Public Service Regulations, 2016.
9
fraudulent misrepresentation. It was indeed a condition attached to the
advertisement of the post that ‘suitable candidates will be subjected to a personnel
suitability check (including criminal record chec ks and financial/asset record
checks) ’. It becomes worse where an employee persists , as the first respondent did,
that there is no need to disclose, notwithstanding clear instructions in terms of
directive s and regulations.
[28] It has also been held that failure to disclose the complete truth in
circumstances where there can be no doubt that silence may amount to a
misrepresentation, such an omission will invariabl y give a misleading impression.5
[29] In terms of Chapter 2 of the Public Service Regulations, any designated
employee who fails to disclose an interest or wilfully provides incorrect or misleading
details is guilty of misconduct.
[30] The power to appoint and prom ote employees of the State is located in the
heartland of the Executive Authority.6 The Executive A uthority is therefore entitled to
set norms and standards by which it will measure the appointment criteria. In terms
of Regulation 18, all SMS members ‘shall’ disclose their interests to the Head of the
Department in respect of the previous year from 1 April to 31 March of the year in
question. It does not lie in the courts’ hands to simply ignore the norms and
standards set by the Minister and regard them as irrelevant. In my view , the test is
whether the failure to disclose was material , and as such, would have inevitably
influenced the decision to appoint the first respondent to the advertised position .
[31] In my view , the first respondent’s non-disclosure was material to a decision
whether or not he was fit to be appointed in a managerial position as advertised,
which demands absolute integrity and impartiality. It follows , therefore, that a senior
employee, like the first respondent , had a fiduciary duty to disclose his financial
interests in the companies aforementioned.
5 Marais v Edlman 1934 CPD 212.
6 Section 9 of the Act.
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[32] As alluded to above, the first respondent was incli ned to approbate and
reprobate in that at some stage he said he disclosed his interests and at some other
stage he argued that he was not aware that he had a duty to disclose his financial
interests. Regulation 11 makes it plain, as a code of conduct, that an employee must
abide by and strive to be familiar with all legislation and other lawful instructions
applicable to his or her conduct and official duties. Regulation 14 makes it obligatory
that an employee must promote sound, efficient, effective, transparent and
accountable administration. Failure to adhere to the code of conduct constitutes a
misconduct. Therefore, the first respondent cannot be taken seriously when he
argued that he was not aware that he had a duty to disclose.
[33] The duty of disclosure is rooted i n the duty of impartiality , but was also an
implied (if not express) term of the first respondent’s appointment to the advertised post. To that end, an essential corollary of the implied requirement of the first
respondent to act fairly should include the legal duty to make disclosure.
[34] In the context of an ex parte application for a search warrant , with reference to
full d isclosure of material information, the Constitutional Court in Thint (Pty) Ltd v
National Director of Prosecutions and Others ; Zuma v National Director of Public
Prosecutions and Othe rs
7 stated thus:
‘A similar view was expressed in Powe ll8 in the context of search and seizure
under the NPA Act under section 29(5). In this case, the Supreme Court of Appeal ha d to consider , among other things, a challenge to the validity of a
search and seizure warrant based on a failure to disclose material facts. In the
course of dealing with this challenge, the court held:
“In invoking a procedure without notice to the party sought to be subjected to
it, Ferreira engaged the processes of justice in an inevitably one- sided
process. She was consequently under a duty to be ultra- scrupulous in
disclosing any material facts that might influence the Court in coming to its decision. ”’
9
7 2008 (2) SACR 421 (CC) at para 299.
8 Powell NO and Others v Van der Merwe NO and Others 2005 (5) SA 62 (SCA) (Powell ).
9 Id at para 42.
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[35] In view of the above, it is clear that the Labour Court misdirected itself both on
the findings of fact and law. Accordingly, the appeal must succeed.
[36] Before conclusion, there is one procedural aspect relating to the r ecord of
appeal which requires some comments . In terms of Rule 6 (11) (h) and (i) of the
Rules of this Court10, the record of appeal must not contain the record of oral
argument and heads of argument . Further, the Rules provide that a document must
not be included in the record more than once.11 Volume 8 of the record consisted of
heads of argument before the Labour Court by both parties. The judgment of the
Labour Court appears twice in volume 9. By including unnecessary documents, the
appellant may attract an order of costs. Care should be taken when preparing
records of appeal not to include unnecessary material , as this goes to costs. Legal
practitioners often charge for perusal of the whole record, which may not be fair to
clients where it is not necessary to do so.
Costs
[37] What r emains is a question of costs. In terms of section 162 of the Labour
Relations Act12, an order of payment of costs may be made in accordance with the
rules of law and fairness. Unlike civil matters , costs in labour disputes do not
necessarily follow the result .13 This remains a discretion of the court , taking into
account the conduct of the parties during the proceedings and the relationship that
exists between the employee and employer. I do not consider an order of costs as
appropriate in this matter.
[38] In the result , the following order is made:
Order
1. The appeal is upheld.
10 GN 4775 of 2024: Rules Regulating the Conduct of the Proceedings of the Labour Appeal Court.
11 Rule 6(10).
12 Act 66 of 1995, as amended.
13 Union for Police Security and Corrections Organisation v South African Custodial Management
(Pty) Limited and Others (2021) 42 ILJ 2371 (CC) at para 24; Zungu v Premier of the Province of
KwaZulu- Natal and others (2018) 39 ILJ 523 (CC) at para 24.
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2. The order of the Labour Court is set aside and substituted with an
order in the following terms:
‘The application for review is dismissed with no order as to costs.’
3. There is no order as to costs.
B R Tokota
Nkutha- Nkontwana JA and Mahalelo AJA concur .
APPEARANCES:
FOR THE APPELLANT: F T Pretorius and Z Zito
Instructed by the State Attorney
FOR THE FIRST RESPONDENT : Mr M Java of Java attorneys