LABOUR – Dismissal – Malingering – Employee telling supervisor that he was ill
Supervisor seeing him on television at a protest march – CCMA commissioner finding dismissal substantively unfair – Probabilities were overwhelming that employee was not sick and malingering in order to avail himself for the protest action – That he was seen at protest march is sufficient enough evidence to expose his false impression – Award set aside and replaced with one finding dismissal substantively fair.
Facts: Mr Mathebula was employed as a junior investigator by SARS and one day messaged his supervisor to inform him that he was not feeling well. On the following day he said that he was still not feeling well. Mr Mathebula allegedly consulted a doctor and obtained a medical certificate certifying that he was unfit from 9 to 11 September. Whilst watching the news on television, his supervisor spotted Mr Mathebula participating in a protest march by the Economic Freedom Fighters (EFF) against Clicks on the two days that he had called sick (7 and 8 September). Mr Mathebula was found guilty on charges of dishonest and gross dishonest and dismissed.
Application: Seeking the review of an arbitration where the commissioner found that the dismissal of Mr Mathebula was substantively unfair. The commissioner ordered SARS to reinstate Mr Mathebula and to pay him for his loss of salary.
Discussion: That it was common cause that Mr Mathebula participated in a protest action on a day in which he unashamedly and audaciously indicated to SARS that he was not feeling well; that although he was not feeling well enough to attend to his contractual duties, he felt well enough to participate in a protest action; that when he represented to his supervisor that he was not feeling well so that he must be excused from work, he was not being truthful about the state of his health; and that the employee took advantage of the provisions in the policy of SARS to the effect that for illness lasting two days or less, the employer will accept the representations of the employee as to their fitness to attend duty without the need for a medical certificate.
Findings: The probabilities were overwhelming that Mr Mathebula was not sick and in fact he was malingering in order to avail himself for the protest action. If he was able to clap hands and sing, it must follow that he would have been able to perform his contractual duties. In cases of
malingering, it is an employee who alleges illness. He who alleges must prove. The fact that he was seen at the protest march is sufficient enough evidence to expose his false impression. The arbitration award of Mooi does not pass the constitutional muster.
Order: The arbitration award is reviewed and set aside and replaced with an order that the dismissal of Mr Mathebula was substantively fair.
COMPANY – Winding up – Abuse of business rescue
Stratagem to avoid winding up – Application an abuse of court process – Applicants in business rescue application non-suited – Using legal process provided for companies which may legitimately be rescued for an ulterior purpose to thwart the winding-up proceedings – Winding-up order correctly granted – Companies Act 71 of 2008, s 131(6).
Facts: PFC is a property and asset owning company. A dispute with SARS over amounts owed resulted in approaches to court and an offer of security to SARS. PFC later embarked upon a campaign to strip itself of all its assets against which a creditor could levy execution. In particular, it sold all three immoveable properties which it had undertaken not to dispose of, as well as two yachts. SARS launched a winding-up application and PFC’s registered address was suddenly changed from Gauteng, to an address within the jurisdiction of the Pietermaritzburg High Court. A few days before the hearing of the winding-up application, a family trust, the sole shareholder of PFC, launched a business rescue application in the Pietermaritzburg High Court.
Appeal: Against the winding-up order granted against PFC by the Pretoria High Court. Also appealed is the order of the Pietermaritzburg High Court refusing a postponement sought by the trustees and dismissing the business rescue application.
Discussion: The Constitutional Court case of Villa Crop Protection v Bayer; whether the conduct on the part of PFC and the trustees, in launching the business rescue application, constituted an abuse of process; whether the trustees should be non-suited if it is found that the business rescue application was launched solely to delay or disrupt the winding-up proceedings; and whether it could have the effect of suspending those proceedings in terms of section 131(6) of the Companies Act 71 of 2008.
Findings: Business rescue proceedings are aimed at restoring a company to solvency, and are not to be abused by a company with no prospects of being rescued but mainly to avoid a winding-up or to obtain some respite from creditors. The conduct of the trustees in launching the business rescue application amounts to an abuse of process as described in Villa Crop. The facts show that from the outset, the launch of the business rescue application was a stratagem and that the trustees had no intention of prosecuting that application to its conclusion. The trustees knew or ought to have known that the business rescue application had no prospect of success. PFC’s very existence, if it was ever a genuine asset holding company, was destroyed by the dissipation of all of its assets. It was clear that PFC is unable to pay its debts, and is commercially and factually insolvent.
Order: The appeals are dismissed.
WEINER JA (SCHIPPERS JA, MBATHA JA, HUGHES JA and UNTERHALTER AJA concurring)
PROFESSION – Misconduct – Attorneys as directors
Whether financial misconduct of one director of law firm invokes liability of all directors – Every director has a fiduciary duty towards the company of which it is a director – Ignorance of financial matters when faced with allegations of misappropriation does not absolve other directors – Sufficient facts to justify an interim suspension – Offending conduct in respect of the financial affairs of the firm has been established – Legal Practice Act 28 of 2014.
Facts: The first respondent is Chueu Incorporated Attorneys, the law firm of which the second to eighth respondents were directors. Various complaints from members of the public were received by the Limpopo Legal Practice Council (LPC). These were to the effect that the firm had represented them in litigation against the Road Accident Fund, collected monies, but failed to pay it over or to account for monies claimed. The firm was handling approximately 6,000 files, with an estimated gross value of R6,2 billion.
Appeal: The High Court granted an order of suspension against the second respondent for a period of 12 months, pending the finalisation of investigations into his conduct and disciplinary proceedings against him. The court dismissed the application for the suspension of the other directors and the Limpopo Legal Practice Council appeals.
Discussion: The liability of all the directors of a law firm, when the financial misconduct has allegedly been committed by only one of the directors; that in terms of the Legal Practice Act 28 of 2014, practitioners may establish private companies to conduct their legal practice; that the Investigating Committee of the Limpopo LPC found evidence of numerous breaches of the code of conduct; and that the common thread running through the
defences of the third to eighth respondents was that their shareholding, if any, was minor, and as individuals they had nothing to do with the firm’s finances which they alleged was entirely within the knowledge and control of the second respondent.
Findings: Every director has a fiduciary duty towards the company of which it is a director. To plead ignorance of financial matters, when faced with allegations of misappropriation, does not absolve a director. Abdication of responsibilities does not absolve legal practitioners of their duties. Once
a legal practitioner is appointed as a director, whatever the factual terms of the arrangement may be, they bear full responsibility for the finances of the firm. All that is necessary at this stage is that sufficient facts have been shown to justify an interim suspension. There can be no doubt that the offending conduct in respect of the financial affairs of the firm has been established.
The record: The court was saddled with a record of 1,427 pages put together in an entirely haphazard fashion with the notice of motion commencing on page 470. The LPC is the regulator of the profession. Of all litigants, one would have expected assiduous compliance with the rules of this court by the Limpopo LPC. See paras - and that the Limpopo LPC should not be entitled to the costs of the appeal.
* See also paras - and that the language used in the notice of appeal ill befits the watchdog of the legal profession.
Order: The appeal is upheld and the order of the High Court replaced with one where the third to eighth respondents are suspended from practicing as attorneys for a period of six months pending the finalisation of investigations into their conduct as directors of the first respondent. Directions are given for the administration of the trust accounts, accounting records and other matters.
NICHOLLS JA (SALDULKER JA, CARELSE JA, NHLANGULELA AJA and MALI AJA concurring)
ABOUT THE EDITOR
Louis Podbielski spent ten years at Juta working on various law reports and has read many thousands of judgments for case selection. He has considerable experience in writing flynotes and headnotes, compiling case annotations, and in refining subject indexes. During his four years at LexisNexis he was involved with legal data, analytics and in developing various legal tech solutions. He now runs his own case law service Louis Case Law
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