South Africa's Protected Disclosures Act, 2000 ("PDA") offers protection for employees who are whistleblowers, and who make "protected disclosures", namely those that provide information exposing criminal or other irregular conduct in the workplace. However, in order to constitute a "protected disclosure" and be afforded protection against any reprisals as a result of making a disclosure, a disclosure must comply with the provisions of the PDA.
In National Institute for the Humanities and Social Sciences (NIHSS) v Lephoto and another, Mr Lephoto challenged the fairness of his dismissal from the NIHSS, which he alleged was a result of him making a protected disclosure and was therefore an occupational detriment as defined in the PDA. He argued that this constituted an automatically unfair dismissal in terms of the Labour Relations Act, 1995.
Mr Lephoto had been appointed as the Chief Financial Officer of the NIHSS on a five-year, fixed-term basis, subject to a twelve-month probationary period. Approximately eight months into Mr Lephoto's appointment, the CEO, to whom he reported, consulted an attorney on behalf of the NIHSS regarding concerns about Mr Lephoto's performance and conduct. This included the failure to attend meetings, to provide the CEO with feedback, to act on instructions, to bring important information to the CEO's attention, the late submission of reports, and his role in the implementation of the NIHSS payroll system.
Subsequent to a second consultation between the CEO and the attorney, the CEO was informed that a document had been submitted to the board by Mr Lephoto, in which he made various allegations against her, including her "questionable relationship" with the project team leader of the auditing company rendering services to the NIHSS, and a disregard of her legal obligations in respect of the supply chain management of the NIHSS.
As the allegations made by Mr Lephoto were unclear, the board requested clarification. Mr Lephoto responded with an "explanatory memorandum".
The NIHSS then appointed an independent investigator, Mr Charles Nupen, to investigate the concerns raised in respect of Mr Lephoto's performance and conduct, as well as the allegations levelled against the CEO. Mr Nupen issued a report in which he found no impropriety on the part of the CEO. Notably, Mr Lephoto had indicated that the CEO's conduct was questionable in terms of the Public Finance Management Act, 1999 ("PFMA").
The NIHSS gave Mr Lephoto the opportunity to comment on Mr Nupen's report, and a deadline was set for the submission of comments. However, after numerous extensions, excuses and delays, Mr Lephoto failed to comply with any of the deadlines or provide any comments on the report. The NIHSS board took the view that the delays were unreasonable and notified Mr Lephoto that his employment had been terminated.
Mr Lephoto challenged the fairness of his dismissal in the Labour Court. The court found that his dismissal was unfair in that it constituted an occupational detriment as defined in the PDA. The court reinstated him with retrospective effect and awarded him compensation. The NIHSS then appealed to the Labour Appeal Court (the "LAC").
The LAC determined that the critical question was whether Mr Lephoto had made a protected disclosure as defined in the PDA. The LAC considered the PDA's definition of "disclosure", which contains the key requirements that the employee making the disclosure must have "reason to believe" that the information being disclosed "shows" or "tends to show" that an impropriety as defined in the PDA has or will be committed.
The key question in this case was therefore whether Mr Lephoto had a reason to believe that the so-called questionable relationship between the CEO and the project team leader of the service provider showed, or tended to show, that a criminal offence had been committed, or that there had been a failure, or a likelihood of a failure, to comply with any legal obligations, or that there was a likelihood of a miscarriage of justice.
In answering this question, the LAC considered the following:
- because the NIHSS is not a listed public entity, the PFMA does not apply to it. Even if the PFMA did apply, nothing contained in it "suggests that a project team leader from a service provider should not have a direct working relationship with the CEO of a public entity to which the service provider renders services";
- the unsubstantiated and vague nature of the allegations made by Mr Lephoto against the CEO;
- serious examples of Mr Lephoto's inability to perform his job as required, which justified the CEO's decision to suspend him a week prior to his purported disclosure;
- the irretrievable breakdown in the relationship between Mr Lephoto and the CEO; and
- notwithstanding the NIHSS providing Mr Lephoto a number of opportunities to respond to Mr Nupen's report, Mr Lephoto's repeated failure to respond.
The LAC noted that the NIHSS had taken extensive steps to fully investigate and address the allegations made by Mr Lephoto. The LAC also acknowledged that the concerns raised in respect of his performance and conduct, and that the allegations levelled against the CEO by him were carefully considered by Mr Nupen, despite Mr Lephoto's misplaced objections and accusations of a lack of independence and fairness directed at Mr Nupen.
The LAC ultimately found that there could be no basis on which to believe that the information provided by Mr Lephoto fell within the definition of "disclosure". Rather, his actions, on a reasonable inference, appeared to be in retaliation for the difficulties in which he found himself as a result of his own incompetence or poor performance. The LAC concluded its decision by succinctly stating that:
"However, the PDA was not enacted to encourage employees, whose own conduct renders them liable to dismissal, to exploit this legislation in a desperate attempt to fend off the inevitable consequences of their own actions or performance. That the PDA should be interpreted generously in order to vindicate its purpose is one thing, but in a case such as the present, where the facts are overwhelmingly in support of the conclusion that its provisions were abused, the court should have no truck with an attempt to invoke its protection."
The LAC's message is clear and should serve as a warning to employees: while the PDA seeks to ensure protection for legitimate whistle blowers, it will not protect employees seeking to abuse its provisions to avoid the consequences of their own actions. This judgment also provides guidance to employers when faced with purported disclosures. The NIHSS took extensive steps to properly address the allegations made by Mr Lephoto in a transparent manner. Furthermore, the LAC relied significantly on Mr Nupen's report when arriving at its decision. It is therefore unlikely that a court will look favourably upon an employer that merely dismisses purported disclosures by employees as attempts to avoid their own misconduct or performance issues without taking legitimate and constructive steps to determine their veracity.
Originally published 05 May 2020
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