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  • Writer's pictureNerine Kahn

The [fake] case of state protection failing employment justice?

Given how I have spent the last twenty or so years of my career, I tend, at second blush, when evaluating individuals in their careers, to view them through an employment relations lens (and with those higher-profile employees, a bit of governance oversight thrown in).

Did Gordhan have a case for constructive dismissal?

It was in August last year that I started thinking about how I would represent Minister Gordhan (PG), the then Minister of Finance, in his very obvious case of "international" constructive dismissal. This has been made more poignant these last few weeks, as I observed the obvious "protection" afforded to Brain Molefe over Gordhan.

Since last year everyone around the world, and in South Africa was asking when, not if, PG was going to be removed from his "job" and role as Minister. He had, of course, only been back in it for a short time. He had, by all accounts, been parachuted back in there against his "boss’s" will (President Zuma).

As a member of the cabinet, you largely give up your employment rights as you can be "hired and fired" by the president at will. Your constitutionally entrenched right to fair labour practises falls by the wayside.

Putting this aside, employment rights are linked with "master and servant" rights in our law, and so, in considering this, he can be seen as a servant.

What is required for a constructive dismissal?

In terms of labour legislation, an employee may resign and claim constructive dismissal in a specific set of circumstances. The employee needs to show that the employer's conduct rendered continued employment intolerable. This requires evidence that the continuation of employment was made unbearable without any reasonable or proper cause.

When evaluating this, the law is objective: would any reasonable person in the position of that employee find continued employment intolerable?

In an interpretive fashion, let us consider this test against the general facts.

PG endeavoured with true determination and with the support of (mainly external) stakeholders to perform his job with aplomb. He had been handed a "poorly performing division," so to speak, and he systematically set about trying to turn that around. He received very little public encouragement from his boss. In fact, history will show quite the opposite. At every turn, there was speculation, daily articles in the media, and queries from international investors about how, when, and if he was going to be fired, what his relationship with his boss was like, etc.

When Molefe resigned and was made an MP, PG was taunted by his potential successor publicly. PG received no supportive statement from his boss; rather, he (PG) was left to address this.

A constructive dismissal could have been claimed

Examining this, I have little doubt that the situation must have been intolerable and, in an objective evaluation of the facts, that no reasonable person could have been expected to continue in this role. But, PG did, a committed dutiful employee of the state, who clearly works for the reward of making a difference.

Servant of the state

Significantly, he has remained on as an MP, and continues to "make a difference", even though if he had resigned, he would have benefited financially on a personal level, viz. his pension benefits. The last week has shown that he has done this to maintain his role as servant of the state and its citizens by challenging issues as an "(extra)ordinary "MP.

The life of Brian as a state employee

Let us look then, by contrast, at the conduct and treatment of the "employment" history of an alleged successor in waiting, former MP and key protagonist in the current South African diaspora, Brian Molefe.

He has made claims at his most recent stop, Eskom, that he kept the lights on and improved service delivery. Let's, for the purposes of this examination of his "employment/servant" role, give him that*.

State capture findings amount to employee misconduct

In the "state capture" report, it was pointed out that what Molefe was doing in employment terms amounted to misconduct.

Good governance would dictate that the board, through its chairperson, should have urgently convened a process to call Molefe to account for this conduct once the report was published, obtain recommendations on whether this would constitute misconduct and charge him with a disciplinary offence if required. Certain noises were made, but the response was a media conference indicating that, in the interest of good governance, Molefe was leaving. The accounting minister (Brown), also confirmed his resignation.

Resignation, Retrenchment, Pension or unpaid leave?

Applying the law to this situation means that the employee, through his own unilateral act, terminated the employment relationship. A favourable interpretation would be that he had, with the boards' consent, negotiated to resign instead of facing an enquiry. Hence, having duly served notice, he would be at liberty to be employed elsewhere. Hence, he could legitimately take up office as an MP.

So, given that in the national consciousness, Molefe had resigned as Eskom CEO, when he subsequently resigned as an MP, and popped back up as CEO of Eskom, all over a weekend, his status and protection as an employee, who could be freely reinstated, was called into question.

The initial explanation was that he had returned because his retrenchment payment of R30 million rand was not approved by the Minister. Then this package was explained as an early retirement. When that didn’t wash, he was said to have been on unpaid leave. What the litany of excuses does highlight is that, as an employee, Molefe was certainly in it for the reward and the money, and certainly not held accountable.

If he had been legitimately retrenched, a process would have needed to be followed with legitimate justification. As an executive, he is more vulnerable in this regard as "strict adherence" to the letter of legal process is not necessarily required. Either way, there was no need for him to be retrenched as Eskom required a CEO, as evidenced by its advertisement for the position subsequent to his departure.

The next explanation offered was that Molefe was going on early retirement. This would usually be governed by pension fund rules. What is clear is that, being younger than 50, he didn’t meet the cut, and another "justification" was sought.

Violating both employment contracts at the same time

The absence and reinstatement were then explained as unpaid leave; in other words, the resignation that was initially touted was actually incorrect and that the excursion to become an MP was just a diversion. This explanation violates the 2 employment relationships Molefe was engaged in at the same time: one as an MP holding another job is forbidden, and in terms of Eskom’s own extraneous (moonlighting) employment policy, the requirements would be similar.

The irony for me is that at an executive level, where currently the most common practise is a simple agreement terminating the relationship, or stipulating the nature of the ongoing relationship, would have addressed this state of affairs. (But governance requirements and PFMA would have prevented a significant package payment.) What is clear is that exactly such a deal was struck before the requisite approvals were obtained, and Molefe, having already "resigned," then threatened legal action.

Not a servant of the state

As an employee of the state, given the apparent misconduct charges hanging over him, he clearly demonstrates that he is working for money, personal interest, and status, and not as a servant of the state.

The protection afforded him has been further extended by the decision of the ANC NEC that while he shouldn’t remain Eskom CEO, his talents should not be lost and another role should be found for him. This is how a favoured employee is treated, not withstanding serious breaches of the employment contract and obligations by the employee.

What are we learning or gaining from this obvious disparate treatment?

This brings me to the points I wish to emphasise:

  1. PG as Minister of Finance, clearly could have claimed a constructive dismissal, long before he was actually dismissed. As a state servant he was exposed, unsupported by the hidden powers of the state. But vocally supported by the citizens who he continues to serve, not showing any heed for “extra” remuneration. He has now been left to remain an MP.

  2. Molefe has publically demonstrated his lack of integrity, knowledge, accountability, and avaricious greed, but been continuously protected by the hidden power of the state who in protecting him have violated the very employment laws that they should uphold, and which were fought for at the forefront of dismantling apartheid.

  3. This state of affairs from an employee relations and organizational discipline point of view disables Eskom (and the State) in its ability to manage its people. Picture a shop steward from NUMSA, UAASA, or NUM (recognized Trade unions at Eskom) defending a worker from an absconscion, a misconduct or a retrenchment charge citing the conduct, over looked by the board, of the CEO when presenting a defence. Arguing that discipline as a key cornerstone of a good workplace must be consistently applied to ALL employees. All pigs** are equal in employment law in other words.

  4. PG has added untold value in his role, representing integrity, servant leadership and accountability. Molefe has a cloud over him in relation to integrity (Saxonwold Shebeen speech, misleading the public on his actual reasons for leaving), misconduct (State Capture Report findings, not addressed by Eskom Board), and yet he is endorsed to hold another role as an employee of the state. This leave little doubt that there is no requirement of accountability (to a board, or citizens), or to follow employment rules if you are a” protected” state employee.

You ignore the laws, workplace rules and protect only some employees at your peril, as this can then lead to chaos.

In the State and Eskom this selective protection of employees violates good governance, creates uncertainty and entrenches conflict.

*For a more accurate analysis reference to research by Chris Yelland is suggested.

**Viz Animal farm

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