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IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NO: JS 898/04
Heard: 2 November 2006
Delivered electronically: 26 December 2006
In the matter between:
M M TSHISHONGA Applicant
AND
THE MINISTER OF JUSTICE AND
CONSTITUTIONAL DEVELOPMENT First Respondent
THE DIRECTOR-GENERAL OF THE
DEPARTMENT OF JUSTICE AND
CONSTITUTIONAL DEVELOPMENT Second Respondent
JUDGMENT
______________________________________________________________
Introduction
Are disclosures to the media about impropriety in the workplace protected under the Protected Disclosures Act 26 of 2000 (PDA)? What is a disclosure? When does it qualify for protection? What remedies are appropriate for compensating a victim of an occupational detriment?
These are some of the questions that have to be answered in the first claim before the Labour Court for compensation arising from the PDA.1
Applicant’s evidence
The applicant was employed in 1978 in the department of justice (the department) in Venda as a Director-General. In 1994 he became a Deputy Director-General when the various departments of justice amalgamated. He was the Managing Director of the Masters’ office business unit (the unit).
One of his tasks was to eradicate corruption that riddled the administration of insolvent estates, particularly around the appointment of liquidators. After a brainstorming exercise with the staff, it was resolved that a panel would be established to appoint liquidators.
In 2002 the first respondent, the former Minister of Justice, Dr Penwell Maduna, telephoned the applicant from Cape Town to inform him that he was with a friend, Mr Enver Motala, who would be contacting the applicant because he, Motala, was knowledgeable about liquidations.
In February 2002 Motala met the applicant for lunch in Pretoria. He expressed his dissatisfaction with the way in which he was being sidelined by the procedure for appointing liquidators. Mr Lategan, an Assistant Master in the Pretoria Master’s office was, he said, very knowledgeable about liquidators and their appointment and that he should be engaged when appointing them. The Minister, he said, liked the applicant very much and that he had great respect for the Minister. The discussion ended with the applicant being wary of Motala. It was clear to him that Motala wanted to influence him for his own purpose by abusing his relationship with the Minister.
Two insolvency practioners bodies wanted to merge. About 8 February 2002, they met under the chairmanship of the applicant. Prior to the meeting, Motala had telephoned the applicant to inform him that the Minister wanted him to attend the meeting. The applicant was unhappy about acceding to the request. He informed Dr Seriti, the erstwhile chairman of one of the merging associations. Dr Seriti was concerned. At the meeting he said it was not proper for Motala to attend whilst other liquidators were excluded. Furthermore, it was a meeting of the executive members of the practioners’ bodies. Motala nevertheless remained in attendance throughout the meeting, despite the discomfort it caused to the participants.
About 15 February 2002, the Minister telephoned the applicant expressing dissatisfaction with the way in which liquidators were being appointed. He directed the applicant to convene a meeting with the staff so that he could address them.
The meeting was attended by South African Commercial Catering and Allied Workers Union (SACCAWU) and South African Revenue Services (SARS). Motala attended again as the only liquidator. The Minister announced that he was unhappy with the way in which Motala was being sidelined. The chairperson of the panel for appointing liquidators, Irene Mokgalabone, had prepared a report which she distributed at the meeting. She explained why Motala was not appointed. (See evidence of Mokgalabone)
The discussion ended on the note that as the Minister was made aware of the procedure, if anyone was unhappy they could approach the applicant first before contacting the Minister. In the applicant’s opinion, the matter was resolved.
While the applicant was on leave in July 2002, Mr Koos Van der Merwe, the Senior Manager: Inland who was deputizing for him, telephoned to inform him that Mr Farouk Vahed, the Master of the High Court in Pietermaritzburg, had been instructed by the Minister to appoint Motala as liquidator in the Retail Apparel Group (RAG) liquidation. Van der Merwe wanted to know how to assist Vahed.
The applicant advised Van der Merwe to get help from the department’s legal advisors so that the Minister can be informed as to what his powers were. Van der Merwe replied that legal advice had already been obtained and that the Minister did not agree with it. The applicant then directed Van der Merwe to inform Vahed to exercise his discretion in terms of the law and that Vahed should get the Minister’s instructions in writing if they were beyond his powers.
On his return to work the applicant asked Vahed to prepare a report on this episode. (The Vahed report)
RAG was liquidated in May 2002.
Four liquidators originally appointed to the RAG enquiry successfully challenged the appointment of Motala in the High Court in Kwazulu Natal. The Court confirmed the opinion of the department’s legal advisers, viz that the Minister did not have the power to instruct the Master to appoint liquidators.
The Minister’s appeal to the Supreme Court of Appeal was dismissed.2
About 12 September 2002, while the decision of the Supreme Court of Appeal was pending, the Minister instructed the applicant to convene a meeting between Lategan, the second respondent, ie Director-General Vusi Pikoli, Vahed and himself. At that meeting the Minister announced that he was appointing Lategan as acting Assistant Master in Pietermaritzburg to oversee the appointment of the liquidators in the RAG case.
The applicant was surprised. He did not expect the Minister to appoint his subordinate without first approaching him. He wondered how the Minister even knew of Lategan without engaging the applicant. Furthermore, it was unheard of that an Assistant Master from one jurisdiction could be appointed to act in another jurisdiction and in a specific case.
Although RAG was one of the largest liquidations in the country involving claims in excess of R1 billion, Vahed had been reluctant to follow the Minister’s instructions for the further reason that it did not justify five liquidators.
Lategan appointed Motala as the fifth and lead liquidator in the RAG liquidation after he became acting Assistant Master in Pietermaritzburg.
The procedure for appointing liquidators was that the company in liquidation would requisition a person to be appointed. It was not open to Lategan to make an appointment without a recommendation or requisition. Lategan’s relationship with Motala was also unusual. The Finance Week of 14 April 20043 published a testimonial issued on 7 March 2001 in which he praised Motala “unashamedly”.4
The RAG enquiry in terms of s 417 of the Companies Act No 61 of 1973 proceeded in Sandton. Motala’s attorney, Brian Khan and two advisors, viz Soraya Hassim and Ratif Bhana, who were also related or personally associated with Motala, were appointed.
During a meeting held in January 2003 to discuss how to deal with the Minister and Motala, the Director-General admitted to Mokgalabone and the applicant that he was unhappy about their relationship and remarked that the Minister became “agitated” whenever something was said about Motala.
At about 21h00 on 28 January 2003 the applicant received a telephone call at his home from the Minister informing him that he was with the trade union who was up in arms because it believed that its interests were not being taken seriously when liquidators were appointed. The Minister accused the applicant of not helping him in the RAG matter and of bad-mouthing him. He declared that the applicant would be “the first casualty”. He raged on that he was removing the applicant as head of the unit with immediate effect and that he did not care where the Director-General placed him. He refused to hear any response from the applicant.
The applicant became numb with disbelief that the Minister could be so insensitive. He telephoned the Director-General that evening to report the incident. The Director-General was also shocked. They agreed to discuss the matter the following day.
At the discussion the next day it was clear that the Minister had already contacted the Director-General. The applicant questioned how a politician could instruct the Director-General as an administrator to remove the applicant and why the Director-General would execute the instructions without following prescribed procedures. He wanted to ask the Minister for reasons for removing him. The Director-General replied that the Minister would not give reasons.
On 4 February 2003 Enver Daniels, the Chief State Law Advisor, was appointed to take over the applicant’s responsibilities as the Managing Director of the unit.5
According to media reports, the Minister had allegedly hinted that the applicant had an axe to grind after being rapped over the knuckles for poor work performance. The applicant believed that his performance was a matter that should have been raised by the Director-General not the Minister. He denied that his performance was ever in question. At his disciplinary enquiry, the Director-General acknowledged that he “did a good job” in cleaning up the Department and that he “sent a message of clean and good corporate governance.6 In the letter dated 19 February 2003 in which the Director-General gave the applicant notice of his removal to the position of Managing Director in the office of the Director-General, he assured the applicant that he needed his expertise.7
The applicant reported to work daily but was given no work in his new position.
On the Applicant’s recommendation made when he managed the unit, the Director-General had commissioned a forensic investigation into corruption. Mr Kinghorn prepared a report on his investigations (the Kinghorn report). Mr Mckensie, who had been seconded to the department by Business Against Crime to investigate corruption in the Master’s office, oversaw the preparation of the report. He gave the applicant a copy in the first week of February 2003. Copies of the Kinghorn and the Vahed reports were also given to the Director-General. The Director-General did not act on either report.
In the absence of any response from the Director-General to these reports, the applicant went to the Public Protector in February 2003. He discussed his complaint with Adv Van Rensburg of the Public Protector’s office and left copies of the reports with him.
Not having heard from the Public Protector, the applicant lodged the complaint with the Auditor-General’s Office on 16 April 2003.8 Apart from acknowledging receipt of the complaint the following day9, the applicant received no further response from the Auditor-General.
Thereafter the applicant met with Adv Khutswana from the Public Protector’s office. She had since been assigned his complaint. He received a letter dated 12 May 2003 from her informing him that his complaint relating to his treatment as a public servant should be referred to the Public Service Commission (PSC). The allegations about irregularities in the appointment of liquidators in the RAG matter were to be handled by Mrs Fourie from the Public Protector’s office.10 His complaint to the Auditor-General had also been redirected to the Public Protector to avoid duplication.
Later in May 2003 the applicant received a call from Fourie requesting a signed copy of the Vahed report. He referred her to Vahed in Pietermaritzburg. He heard nothing further about the investigation from the Public Protector’s office.
The applicant then turned to Minister Pahad as a member of the Cabinet. Minister Pahad said that it seemed that the Minister was not right; but he was not prepared to get involved. Instead, he urged the applicant to meet the Director-General and the Minister. He offered to help the Director-General set up the meeting as he had good relations with the Minister. The applicant thought that was a good idea and asked the Director-General to convene the meeting. He agreed to do so but the meeting did not take place.
On 6 October 2003 he telephoned Fourie for a progress report. She informed him that nothing had been done because there was no official complainant. The applicant persisted that he was the complainant and offered to go to her offices again to discuss the matter. Fourie said that she would confer with the Public Protector and revert shortly thereafter. The applicant did not hear from her again.
Frustrated by the lack progress in investigating the complaint, the applicant conferred with an investigative journalist on 6 October 2003, after Fourie failed to revert to him. He held a press conference two days later.
The Director-General telephoned to discourage him from approaching the media.
The applicant issued a press statement in which he set out information about the alleged improprieties.11 To justify his suspicion that there was a questionable relationship between the Minister and Motala he informed the media that Motala received liquidations to the value if R 583m from July 2000 to September 2003. Other liquidators received liquidations to the value of R1m or so. He included statistics of Motala’s appointments in his press release.
Much publicity followed.
The Minister responded with a press release explaining that he initially acted in response to a request by SARS to appoint Motala. After his decision was set aside by the High Court Lategan appointed Motala without his intervention.12
The headlines of Sunday Independent of 12 October 2003 read “Maduna throws in the towel.” Nepotism and corruption in the department were cited as some of the reasons for the Minister deciding not to be available to serve as a Minister the following year.13
On 8 October 2003 The Sowetan reported that President Mbeki was intending to appoint a judicial commission of enquiry into the allegations of corruption against the Minister.14 A commission was not established. Instead, an internal committee headed by Advocates Nkosi and Seth Nthai was commissioned to investigate corruption in liquidations. The applicant testified before the committee. To date the committee has produced no reports of its investigations of which the applicant is aware.
The Minister telephoned him after an article was published in The Citizen15 and shouted that he would not get any job in this country.
Publicly, the Minister allegedly described the applicant on national television as “a dunderhead”, “a relic of the Bantustans of old who was accommodated by Maduna’s people in the new order and who was now biting the hand that fed him.”16 He was also alleged to have said that the applicant was a timid public servant who could not box himself out of a wet paper bag.
The applicant lodged a complaint of criminal defamation against the Minister. The police obtained a transcript of the broadcast and submitted it to the Director of Public Prosecutions. He declined to prosecute and advised the applicant to pursue a civil claim.
The applicant was suspended on 13 October 2003 pending disciplinary action because, it was alleged, he should not have held a press conference to reveal sensitive issues about the Ministry and the department without following protocol, nor should he have made defamatory remarks about the Minister to the media.17
In a further letter dated 23 October 2003 to the Public Protector the applicant placed on record that he had been suspended and that he suspected that the Minister would instruct the Director-General to charge him for misconduct.18
On 27 October 2003 the applicant was subpoenaed to testify at the RAG enquiry. He did not fit the criteria for relevant witnesses in terms of s 417(1) of the Companies Act. Although he suspected that he was being subpoenaed in order to be discredited, he nevertheless attended the enquiry with a legal representative. Adv Stephan Du Toit, the evidence leader, badgered him with questions that were not relevant to the RAG liquidation. He asked the applicant why he went to the press about the corruption allegations. Such questions were relevant to a disciplinary enquiry against him. Their relevance to a s 417 enquiry was also challenged by Adv Broster, SC who represented another party at the enquiry.
The applicant received a message via his professional assistant that the Director-General wanted him to return documents.
He sought a meeting with the Director-General to clarify precisely what documents were sought. The Vahed and Kinghorn reports had been impounded at the RAG enquiry. The applicant did not want to hand over documents that would assist in his defence.
The Director-General did not meet with the applicant. Instead, on 14 November 2004 he obtained a rule nisi against the applicant interdicting him from disclosing privileged information or documents of the department to the RAG enquiry and to any other person and called for the return of all documentation in his possession which were obtained without authorization and which belonged to the department.19 The rule nisi was discharged on 16 November 2004.20
The applicant was charged with misconduct on 5 December 2003.21
He challenged his suspension successfully and without opposition in the Labour Court. On 28 January 2004 he was reinstated in the position of Managing Director of the unit pending arbitration to be conducted under the auspices of the General Public Service Sectoral Bargaining Council.22
The department refused to comply with the Labour Court order because of his alleged misconduct.
His suspension persisted until 20 July 2004 when, following the disciplinary enquiry conducted by an independent chairperson appointed by the department, the applicant was found not guilty.
After the disciplinary hearing, the applicant contacted the Director-General to get his job back and to ensure that the department did not deem his employment to be terminated on the grounds of abscondment. When they met the Director-General refused to reinstate the applicant despite the Labour Court order and being found not guilty of the charges. He contended that the trust had broken down and that they should talk about a settlement. To avoid the risk of being deemed to have absconded, the applicant secured a letter from the Director-General confirming that he was on indefinite leave. Negotiations began which culminated in the applicant’s employment being terminated by agreement.
Evidence of Irene Mokgalabone
Mokgalabone was employed by the department in 1995 as an Assistant Master.
She corroborated the applicant regarding the establishment of a panel of Assistant Masters to appoint liquidators. The rationale was that it was easier to bribe or corrupt an individual but not fifteen members of a panel. Prior to the establishment of the panel, the function of appointing liquidators was rotated amongst individual Assistant Masters.
She attended the meeting called by the Minister on 15 February 2002. She found the meeting strange firstly, because the Minister had not visited the Masters’ office before. Secondly, he was accompanied by one liquidator only, viz Motala. Thirdly, the purpose of the visit was puzzling. The Minister wanted to know why Motala was not being appointed. Mokgalabone presented the Minister with a written report explaining why Motala was not appointed in certain cases and especially in response to requisitions from SARS. 23
She informed the Minister that the requisitions from SACCAWU, the trade union that nominated Motala, had not been completed properly to enable the panel to assess what the value of the claims were and how many claimants supported the nomination.
The panel members expressed their concern that the corruption uncovered was the tip of the iceberg. Part of the problem, they said, was the absence of a regulatory framework for selecting liquidators. As far as Mokgalabone was concerned, the Minister’s queries had been addressed adequately.
Mokgalabone then turned to testify about the panel’s comparative report regarding insolvency appointments for the periods 2000 to 2001, ie the period immediately before the panel was established, during its operation between the end of 2001 to April 2003 and after it disbanded from April to September 2003.24 This report had been prepared for the Minister and the industry.
The comparative analysis showed that when the panel appointed liquidators, the work was spread more widely and evenly. When the panel disbanded, Motala got the bulk of the liquidations.
Dr M S Motshekga of Sechaba Trust (Pty) LTD had responded to the report by writing to the Minister on 12 March 2003 to compliment the panel and Mokgalabone in particular about its “transparent and fair” system of appointments.25 Mr K S Manamela, a liquidator from Legae Trust, wrote to Mokgalabone on 25 October 2002 recording his appreciation of the work of the panel.26
Under cross examination, the work of the panel became even clearer. On a daily basis all appointments of liquidators were pinned to a board on the first floor of the Master’s office. Even after Mokgalabone left the service she was able to complete the report up to September 2003 with the other members of the panel. She gathered information whenever she went to the Master’s office. The panel met over weekends or after hours. It took it upon itself to complete the report up to September 2003 for the sake of transparency.
She wanted to get the report “out there” so that the public would know that the panel did a good job. Mr Hulley probed further to establish why a person who was no longer employed by the department would take the trouble to complete the report, sometimes at the expense of her new employer’s time. To this she responded convincingly that she had a passion for the insolvency industry having been involved in its restructuring.
It emerged that before the panel was appointed, white males mainly were appointed as liquidators. The number of previously disadvantaged individuals (PDI’s) (ie white females, Coloured, Africans, Indians and disabled) increased from 13 in 2000 before the panel was established to 18 in 2001 and to 112 in 200227 when the panel made the appointments. The number of PDI’s who received appointments in big liquidations rose from 12 in 2001 to 73 in 2002 and plummeted to 26 between April to September 2003.28
Motala had received 8 appointments as liquidator for the total value of R265 000 between 27 June 2000 to 31 December 2000. From 1 January 2001 to 31 December 2001 Motala ranked fourteen on the list of liquidators after having 67 appointments and was second highest in terms of the value of the estates to which he was appointed. For the greater part of 2001 appointments were made by individual Assistant Masters and not the panel.
Between 1 January 2002 to 31 December 2002 Motala dropped to 10th in terms of the value of the liquidations in which he was appointed and had 38 appointments. Between April and September 2003 Motala escalated to the top of the list of PDI’s receiving 39 appointments to the total value of R309 787 000. Of this, 11 appointments were in respect of claims above the value of R5000.29
Mokgalabone was challenged on the basis that white males got the bulk of the liquidation work from the panel. One Mr Lyn was cited as an example. He had 3 appointments to the value of R1m in 2000, 8 appointments to the value of R184,5m in 2001 and 42 appointments to the value of R292,1M in 2002. Mokgalabone explained that Lyn was favoured by the banks as a liquidator. He was appointed on requisition.
The PDI’s were identified by an asterisk on the list of liquidators. Mokgalabone elaborated that the asterisk implied that 90% of those liquidators’ appointments had been “discretionary” as distinct from appointments on requisition. A discretionary appointment was made by the panel when a PDI was teamed with a liquidator who was not a PDI or who had been appointed on requisition.
Two lists of insolvent estates were kept – one for estates above R5m and the other for estates below R5m. A roster of liquidators was maintained for each list. Discretionary appointments followed the list alphabetically. As there were many more estates below R5m, the roster in respect of small estates went through faster with many PDI’s getting more appointments.
The list of liquidators was updated by the panel on a daily basis. In the absence of a regulatory body to supervise the appointment of liquidators, a monitoring committee was established with representatives of the executive committees of the practioners’ bodies. The panel interviewed all the candidate liquidators in the presence of the committee before they were allowed on to list. It also inspected all the appointments made by the panel on a monthly basis.30
With regard to appointments on requisition, the panel had to appoint the nominated liquidator if the requisition was in order. The panel did spot checks to establish whether the requisitions were in order. It was not possible to check every requisition because of capacity constraints. The panel also referred fraudulent claims to the Scorpions. By way of example Mokgalabone testified that many requisitions received from SARS were rejected because the assessments were not attached. As a result the value of the SARS’ interest as creditor could not be assessed.
SARS’ assessments were liquid claims. That gave SARS an advantage over most other creditors whose claims had still to be proved. If an assessment was higher than other claims, then SARS’ nominee would be appointed. SARS’ assessments were sometimes questionable. It submitted claims when it owed a refund. On other occasions it failed to produce an assessment even after Mokgalabone had asked for it. Thus the panel could not assume SARS’ requisitions were valid in spite of its preferred status. Because of its status the panel had to be especially vigilant.
Mr Hulley disputed that the discretionary appointments were made fairly. He questioned how one PDI (Ledwaba) could get 14 appointments to the value of R19,5m whilst another PDI, Bahm got one appointment valued at R40 000. Mokgalabone explained that liquidators came on to and left the panel at different times. Bahm might have been on the panel for a short time in 2002. Similarly, Mandela Magato came on to the list later in 2002; hence he received only 3 appointments.31 When it was pointed out to her that Makgato was already on the list for 200132, she explained that there could have been two Makgato’s. She might have confirmed that if she telephoned someone all the Master’s office to check the files.
There was no request that Mokgalabone be allowed to make the telephone call. Nor was the court prepared to stand the matter down to allow her to do so as it was always open to the respondents to refute Mokgalabone’s testimony by producing the Master’s office files.
In March 2003 Mokgalabone and Van der Merwe were instructed to meet the Minister at his offices.
They waited outside his office for thirty minutes before being invited into the room where about thirty people were assembled. The meeting had already been discussing Mokgalabone before she arrived. The complaint of the liquidators assembled seemed to have been about the appointment of white liquidators. The Minister was angry with Mokgalabone and Van der Merwe and encouraged the others to also voice their complaints. He told Mokgalabone and Van der Merwe that they could leave the department or sue him but he would fight to the bitter end.
After the meeting, the Acting Master, Mr Jordaan and Van der Merwe assembled the panel. Jordaan praised them for their work saying that since the panel started appointing liquidators, he had never received a compliant. Van der Merwe directed them to report to Lategan thenceforth as he was the Director: Insolvency.
This arrangement embittered the members of the panel as it meant that their success in transforming the industry would be reversed as the authority to appoint liquidators reverted to one individual. Lategan could overturn their recommendations.
In a letter dripping with bitterness and disappointment, the panel informed Jordaan that it was disbanding.33
Jordaan replied by letter dated 9 April 200334 repeating his appreciation of the work of the panel and reminding them of their duties regarding the appointment of liquidators in future.
Frustrated by this turn of events, Mokagalbone resigned and accepted appointment as a Manager: Estates with ABSA Trust in July 2003. As her resignation was forced by intolerable circumstances in the workplace she considered claiming for unfair dismissal from the department. On advice, she abandoned such action as the “fish was too big” and she was “small fry”. She had overcome her grievance by the time she completed the comparative report. She currently holds the position of Regional Manager: Wills at ABSA.
Submissions for Applicant
The applicant’s case was brought squarely within the four corners of the PDA. Mr Woudstrar, SC took the court through the general principles on protected disclosures. He examined firstly, what the requirements were for a disclosure by reference to the definition of that word in s 1(a) and (b) of the PDA.35 Secondly, he answered the question whether the disclosure was protected affirmatively by referring to s 5, s 6, s 7, s 8 and s 9 of the PDA.
Thirdly, he supported his submission that disclosure to the media was protected in terms of s 9 by submitting that a “wide and unqualified” meaning should be attributed to the word “any” in 9(1). 36 He referred to the manual issued to public service managers by the PSC 37 and a Master’s Degree dissertation.38 Particular requirements of s 9 were discussed to show that the applicant complied fully in that the disclosure was made in good faith, in the reasonable belief that the allegations were substantially true and for no personal gain.
Fourthly, he submitted that the applicant was subjected to an occupational detriment as defined in s 1 (a) (b) and (1) of the PDA.
Fifthly, he invited the court to draw an adverse inference from the respondents’ failure to testify39 and to admit certain hearsay evidence.40
Sixthly, the applicant’s claim for the costs of legal representation for defending himself at the enquiry was based on s 186(2)(b) and (d) and s 191(13) read with s 193 (4) and s 194(4) of the LRA and s 4(2)(b) of the PDA. The quantum of the compensation should be assessed on the basis that it is a solatium for an unfair labour practice.41 The claim for legal costs was patrimonial and should be allowed.42
Lastly, the applicant sought a punitive order for costs.
Submissions for the Respondents
The disclosures were not protected under the PDA firstly, because they were made to the news media which is not a body contemplated under the PDA,43 and secondly, because they were not made in a responsible manner as envisaged in s 3(1)(c)44 of the PDA.
In the absence of any South African cases on the incidence of the onus in proceedings under the PDA, he referred to case law from the United Kingdom (UK) to show that the applicant bore the onus of proving that his actions fell within the terms of the PDA. 45
Returning to South African authorities on the onus of proof generally46 and in employment contracts specifically47 Mr Hulley contended that the onus lay with the applicant to justify that the respondents were not entitled to exercise their powers of dismissal, discipline and suspension and to prove that his actions fell within the terms of the PDA, specifically s 9.
“Information” in the definition of disclosure in s (1)(1) of the PDA, means “facts or knowledge provided or learned.”48 Personal opinion is not information contemplated in the PDA.49 The applicant did not have “reason to believe” in the truth of the disclosures.50 He relied on the Vahed and Kinghorn reports and his own knowledge to conclude that “the Minister had played an integral role in ensuring the appointment of Motala”.51 The Kinghorn report did not state that the Minister was party to corruption involving R950 000,00. Nor did he know the identity of the person reporting to Kinghorn. Further investigations had to be done and the applicant was unaware and made no enquiries to establish whether they had been undertaken.
The applicant was aware that the Minister was taking up the cudgels on behalf of SARS in wanting Motala to be appointed. The Minister was therefore not furthering his own interests. The applicant’s “reasonable belief” that the Minister was guilty of “alleged corruption” was an indication of his bad faith as there is no such crime as “alleged corruption”.52
A disclosure made in good faith53 is not one that is deliberately aimed at embarrassing or harassing an employer.54 The applicant’s disclosure was inspired by a personal grudge against the Minister. It was made one week after the Minister “sidelined” him. He chose not to refer his complaint to the PSC. He failed to investigate whether there was an innocent explanation for the Minister’s conduct despite the Vahed report suggesting that there might be such an explanation.
“Gain” is defined in the Collins English Dictionary as “to acquire (something desirable); obtain”. It has been interpreted in the context of s 30 and s 31 of the Companies Act to mean
“a commercial or material benefit or advantage, not necessarily a pecuniary profit, in contradistinction to the kind of benefit or result which a charitable, benevolent, humanitarian, philanthropic, literary, scientific, political, cultural, religious, social, recreational or sporting organisation, for instance, seeks to achieve.”
The applicant had an axe to grind. He did not have “clean hands” or “pure motives.” His actions were not “truly selfless or altruistic.” He testified at the disciplinary enquiry that he made the disclosure because the department was not settling with him and because he (without reason) feared for his life. For these reasons the applicant disqualified himself from claiming the protection under the PDA.
The respondents persisted in justifying the charge of insubordination because the applicant refused to return the department’s documents, despite the rule nisi being discharged and the applicant being found not guilty at the disciplinary enquiry. The contention was that the PDA did not authorize the applicant to remove and withhold documentation from the employer.
With regard to the relief claimed, the respondents acknowledged that compensation involves the payment of a sum of money55 for pecuniary and non-pecuniary loses56 subject to fairness to both parties.57
The applicant was not dismissed and has been fully remunerated. As his claim is based on alleged insults and ill treatment short of defamation58 there is no reason to link his claim to his remuneration the amount of which, in any event, has not been proved. The applicant’s claim was delictual and none of the factors for assessing compensation for damages to his personality59 were canvassed during the trial.
The respondents deny that the applicant is entitled to costs of legal representation at the disciplinary enquiry as they were incurred at his instance. Furthermore, as a matter of policy employees should not be able to recover such costs.
Costs should follow the result.
Legal issues for determination
The crux of the case was whether the applicant’s disclosures to the media were protected under the PDA. Ancillary issues that arose include the relevance and admissibility of documentary evidence, the relevance of the evidence of Mokgalabone, the onus of proof, whether the applicant’s suspension from duty and disciplinary proceedings constituted “occupational detriment” as contemplated in the PDA and therefore unlawful, whether the applicant’s claim for compensation was delictual, and whether the applicant’s claim for costs of procuring legal representation for his disciplinary enquiry was competent.
The PDA takes its cue from the Constitution of the Republic of South Africa Act No 108 of 1996. It affirms the “democratic values of human dignity, equality and freedom”. In this respect its constitutional underpinning is not confined to particular sections of the Constitution such as free speech or rights to personal security, privacy and property. Although each of these rights can be invoked by whistle-blowers, the analysis in this case is from the perspective of the overarching objective of affirming values of democracy, of which the particular rights form a part. Democracy embraces accountability as one of its core values. Accountability, dignity and equality are the main themes flowing through the analysis that follows.
Evidence
The starting point is to clarify the relevance, admissibility, quality and weight to be attached to the oral and documentary evidence.
Respondents’ failure to testify
The applicant testified in person and called one witness Mokgalabone to corroborate his evidence regarding certain meetings with the Minister and the Minister’s interventions regarding the appointment of liquidators, and Mokgalabone’s own knowledge of operations in the Master’s office regarding liquidations.
The respondents led no evidence. No explanation was tendered for this failure. They were material witnesses. For instance, only the Minister could explain his relationship with Motala and whether he said that he was his friend. Only he could say why he wanted Motala to attend meetings which were not opened to other liquidators, why he was dissatisfied with the way in which the panel operated, whether, and if so, why he circumvented the ruling of the Kwazulu Natal High Court by having Lategan appoint Motala while the decision of the Supreme Court of Appeal was awaited, why he took the extraordinary step of appointing Lategan to act as Assistant Master in another jurisdiction in a specific case, why he summarily sidelined the applicant without following any procedures, whether he made derogatory, unsubstantiated remarks about the applicant to the media, whether he lied about the applicant being taken to task for poor performance and not knowing Motala “from a bar of soap” after he had disclosed to the applicant that Motala was his friend and whether he subjected the applicant to occupational detriment.
Only the Director-General could explain why he removed the applicant from his position as the Managing Director of the unit to a post that did not even exist without ensuring that his removal was procedurally and substantively lawful and fair, why he did not resist this instruction from the Minister, why he discouraged the applicant from asking the Minister for reasons for sidelining him, why he did not act on the Vahed and Kinghorn reports, and if he did, what the outcome was and whether he subjected the applicant to occupational detriment.
Their evidence was relevant to show that any belief that the applicant held was reckless, dishonest, unreasonable or in bad faith. And any action against the applicant was lawful and justified.
The failure of a party to call a witness is excusable in certain circumstances,60 such as when the opposition fails to make out a prima facie case.61 But an adverse inference must be drawn if a party fails to testify or place evidence of a witness who is available and able to elucidate the facts as this failure leads naturally to the inference that he fears that such evidence will expose facts unfavourable to him or even damage his case.62 That inference is strengthened if the witnesses have a public duty to testify.
The respondents are publicly accountable for the actions against the applicant. Their defence is paid from public funds as will any compensation award. They owe the applicant and the public an explanation. The claim is not against them as individuals but in their official capacities.
Their failure to testify results in a dearth of factual material on their side which makes it impossible to exercise any discretion in their favour.63
There was no suggestion from Mr Hulley that the respondents were not available or able to testify. In fact, there was no explanation at all for why they did not testify.
The court must therefore accept the evidence for the applicant, qualified by its probative value.64
Probative value of the applicant’s evidence
As a mature, legally trained, former public servant who had extensive experience in a senior position in the department, the applicant was measured and meticulous in the presentation of his evidence. He was unwavering in every material respect. His responses were complete and coherent.
Whistle-blowers who do not also have a personal grievance against the employer are exceptional. Caution has to be exercised in assessing the evidence of a whistle-blower who is consumed by ulterior motives. Such a person will not be as reliable as one who is driven by the singular desire to prevent or stop wrongdoing. Unquestionably, the applicant was aggrieved by the way the respondents treated him. That does not automatically disqualify from being a reliable witness. His grievance for being removed from his post as the Managing Director of the unit was manifestly legitimate. That triggered the disclosures.
The more credible were his disclosures, the greater the risk he was to the Minister, the fiercer his retaliation, the stronger the legitimacy of his grievance and the more reliable was his evidence. Retaliating against the applicant as the messenger instead of responding to his message strengthened the applicant’s credibility.
How the applicant went about making the disclosures also impacted on his credibility. He willingly accepted Minister Pahad’s suggestion that he meets with the Minister because he genuinely wanted to find a resolution to the impasse. Fame and heroism were not forces that drove him to make the disclosures to the media. He was therefore unlikely to colour his evidence for dramatic effect.
Relevance and Reliability of Mokgalabone’s evidence
Mr Hulley submitted that the evidence of Mokgalabone was irrelevant because it was not her state of mind that had to be tested but that of the applicant’s. In those respects that her evidence was relevant, it was not reliable as it was contrived to favour the applicant, so he submitted.
Mokgalabone’s evidence was relevant firstly, to corroborate the applicant’s evidence in certain material respects.
Secondly, the applicant had to show that his reliance on information about the workings of the panel was reasonable and that it was gleaned from someone who was involved operationally in the system. He had to also show that there was a rational, objectively fair procedure for appointing liquidators which was achieving transformation of the liquidation industry by spreading work equitably to PDI’s, that the system worked well, and consequently, that the Minister’s interference in seeking the appointment of Motala was unjustified.
Mokgalabone was unhappy about the treatment she and the panel received from the Minister. However, she was not so close or disposed to the applicant to tailor her evidence in his favour. The applicant had asked the office manager for someone who could assist him with information about the work of the panel. Mokgalabone obliged. She set about preparing her affidavit even before discussing the matter with the applicant. They met once before the press conference. Her “passion for the industry” as she described it, inspired her to testify.
Mokgalabone was a reliable witness because she was knowledgeable about the operations of the Master’s office and the liquidation industry. She corrected Mr Hulley when he put it to her that the panel did not have a mandate to investigate the claims filed by SARS and other creditors because claims were proved at the first meeting of creditors. Claims, she said, were not proved at the first meeting of creditors. Ninety-nine percent of claims were simply lodged at the first meeting without the creditors attending.
The more she was cross-examined, the more she exuded confidence. As a legally qualified person she understood what information she needed to adduce to verify the panel’s report. She firmly resisted suggestions that she was not knowledgeable about the contents of the report. Her calm replies veiled her irritation at being challenged about her personal knowledge of the work of the panel.
She was genuinely committed to ensuring that the unit was corruption-free and transformed to represent PDI’s fairly. The panel was keenly conscious of the potential for corruption if responsibility for appointing liquidators rested with an individual instead of a panel. She understood what needed to be changed to eliminate corruption and had implemented a plan that was working to achieve that end.
Her responses were direct, unequivocal, firm and confident. To the suggestion that SARS was “deeply aggrieved” by the handling of the requisitions by the Mater’s office she replied that the panel members too were also “deeply aggrieved” by SARS’ behaviour.
Where her memory failed her and whenever it was suggested that she was not testifying truthfully or correctly she was keen to check the files in the Master’s office to verify her testimony. If the panel’s report was contrived and not drawn from data in the Master’s office she would have been reluctant to refer to the source documents. The respondents could have called her bluff if they genuinely believed that she was misleading the court by producing the files themselves.
Her evidence is admitted in all material respects.
Contradiction
In one respect the applicant and Mokgalabone contradicted each other. The applicant testified that he got the data about Motala’s appointments from Mokgalabone and that he had received the panel’s report from which the data was extracted after the press release.
Mokgalabone could not recall whether the applicant had a copy of the report at their meeting on 5 October 2003 or at the press conference. She was aware that eventually he did have a copy. She explained it to him briefly as the focus of the meeting was on her affidavit.
Mokgalabone had seen the applicant’s press statement65 only after it had been released. She could not recall giving him the statistics concerning the number of liquidations awarded to Motala. She denied that she would have done the calculations herself as she was not good with numbers. She recalled pointing out the R30m discrepancy between the panel’s report and the press release but by then the press statement had already been released.
The relevance of the contradiction, it was submitted, was that the applicant was bent on putting the Minister in a bad light. He inflated the value of the liquidations in which Motala was appointed by R30m and did not bother to verify his data.
From the way in which the witnesses testified on this aspect, it seemed that their inconsistency stemmed more from their loss of memory than any deliberate attempt to mislead the court. The inconsistency does not show the witnesses to be necessarily dishonest. It is also not material as the error does not detract from the central thrust of the applicant’s claim namely, that Motala was getting the lion’s share of the liquidations.
Documentary evidence
Both parties tendered bundles of documents on the basis that they were what they purported to be, that they were authentic and could be before court without proof, but the truth of their contents was not admitted and had to be proved in the ordinary course. With regard to the record of the disciplinary enquiry, there was the further admission that it was correct.
Other documents in the bundles included press clippings, judgments, court orders and a document titled “Whistle-blowing - a Guideline for Public Sector Managers-Promoting Public Sector Accountability, Implementing the Protected Disclosure Act.”
Mr Hulley objected on several occasions to the applicant being examined on the contents of the press clippings on the basis that the applicant’s evidence about their contents amounted to hearsay.
The admission pertaining to the status of the documents, limited as it was, is nevertheless sufficient evidence to show what information was available to the applicant and whether he could rely on them to form a reasonable belief to justify his disclosures to the media. In International Tobacco Co (SA) Ltd v United Tobacco Co’s (South) Ltd 1953 (3) SA 343 (W), evidence of rumours conveyed to a traveler were admitted as proof that rumours were circulating, not that the rumours were true.66 Wright v Does d Tatham 1837 (7) Ad and El 313 was a decision in which letters written to a testator were admissible to prove not the truth of their contents but that the testator was a person of reasonable intelligence and understanding and that he therefore had testamentary capacity.67
The documents are divisible on the basis of those that were available when the disclosures were made and those that were generated later. The former are relevant to prove the reasonableness of the applicants belief when he made the disclosures. The latter are relevant to prove whether his belief remained reasonable throughout, whether they fortified his initial belief and whether he had reason to withdraw his disclosures or this action.
Evidence of theTelevision Broadcast
Mr Hulley submitted that the evidence of the broadcast on national television during October 2003 when the Minister allegedly referred to the applicant in disparaging terms68 was inadmissible as it was hearsay. The authenticity of the recording that was broadcast had to be proved69 in order to substantiate his delictual claim for compensation. The broadcasters or other persons having direct knowledge of their contents had to attest to the truth of their contents before the broadcasts could be admissible as proof of his claim in delict.
Whether the applicant’s claim is delictual is discussed under “remedy”. The evidence that the applicant sought to have admitted is firstly, the fact that there was a broadcast of statements attributed to the Minister. That is not in dispute. The fact of the broadcast is admissible and relevant as evidence of material that shaped the applicant’s belief.
Secondly, the applicant wanted the Minister’s statements that were broadcast admitted as evidence. What is in dispute is whether the Minister said what he is alleged to have said. Proof is required that the Minister issued the statements.
What is hearsay?
Under the common law hearsay was defined as
“oral or written statements made by persons who are not parties and are not called as witnesses(.They) are inadmissible to prove the truth of the matters stated… 70
S 3(4) of the Law of Evidence Amendment Act 45 of 1988 defines it as
“evidence, whether oral or in writing, the probative value of which depends upon the credibility of any person other than the person giving such evidence.”
The statements were allegedly made by the Minister. Under the common law the statements are hearsay as the Minister did not testify.
In terms of the statutory definition the alleged utterances are also hearsay because their probative value depends on the credibility of the Minister.71
Admissibility
Are the utterances admissible as an exception to the hearsay rule?72
The constitutional right to a fair trial is at the heart of the question as to whether hearsay evidence is admissible.73 Hearsay is inadmissible because it cannot be tested by cross-examination and is therefore unreliable.74
The singular consideration for the admissibility of hearsay under s 3(1)(c) Law of Evidence Amendment Act is the interests of justice.75 The interests of justice is not dependant on whether the declarant testifies. Nor is the disavowal or non-confirmation of a statement enough to prevent it from being admitted, if it is in the interests of justice to do so. Its reliability can be weakened if it is disavowed or not confirmed.76 Prejudice which is always present when hearsay is admitted against a party will not usually outweigh the interests of justice.77 To outweigh the interests of justice it will have to be prejudice of the kind suffered by accused if the prosecution is allowed to reopen its case to lead hearsay evidence after the accused have closed their case.78
Safeguards must be applied to ensure a fair trial whenever hearsay is tendered. What would be appropriate safeguards could be different for criminal and civil trials79. In criminal cases where an accused against whom the statement is sought to be used is unrepresented, the court must exercise greater caution.
These are civil proceedings in which the parties are legally represented and are themselves legally trained.80
They are in terms of the PDA and the LRA. The movement towards “good, effective, accountable and transparent governance”81 is the overarching purpose of the PDA. Fairness is the cornerstone of the LRA. Both statutes serve to protect employees as vulnerable people.
Governance in the public service is at issue. So is the credibility and dignity of the Minister and the applicant. Both were high ranking public figures. As the utterances were broadcast the public is owed an explanation. The public has an expectation created by s 195(1) of the Constitution that public administration would be governed by democratic values and principles, including the following:
“(f) Public administration must be accountable.
(g) Transparency must be fostered by providing the public with timely, accessible and accurate information.
(h) Good human-resource management and career-development practices, to maximise human potential, must be cultivated.”
An overly technical approach that excludes the content of the Minister’s statements would defeat the purposes of the statutes and the scheme of the Constitutional project which they are designed to serve82. The nature of the proceedings therefore, favour the admission of the hearsay statements in the interest of justice.83
The nature of the hearsay sought to be admitted84 is the oral evidence of the applicant that the Minister made the statements. It was not disputed that the statements were broadcast. Only the authenticity of the broadcast was put in issue to deny that the Minister said what was broadcast.
That happened when Mr Hulley objected to the applicant being examined on the contents of the broadcast. Nothing was specifically pleaded in the statement of case or defence about the broadcast. The applicant mentioned it in the Minutes of the Pretrial Conference of 27 January 2005 in the context of elucidating the relief claimed and the criteria to be considered to assess compensation. The broadcast is one of several factors that the applicant wants to be considered in support of his claim for 12 months remuneration. When the respondents requested further particulars for trial no particulars were sought about the broadcast or any other aspect of the calculation of compensation.
It follows from this that the purpose for which the hearsay is tendered85 is firstly not central to the applicant’s case. It was limited to proving the amount of the compensation claimed. Courts are slow to admit hearsay if it is central to the case.86 Secondly, the applicant had no prior notice that a challenge would be pitched during the trial at the admissibility of the content of the statements that were broadcast. Although no reasons were advanced as to why someone was not available and able to testify, it is not hard to see why the applicant called no one. The Minister was the best person to say whether he issued the statements.
In Executor Estate late Phillips (above) the probative value of sworn evidence tested under cross-examination and found to be credible by a previous court was held to be high87. In S v Ndlovu (above) the Supreme Court of Appeal allowed a warning statement by one accused to be admitted against a co-accused before the defence had closed its case.88 In the recent criminal case of Shaik v The State (above), the Supreme Court of Appeal expanded the limits of the interest of justice to admit hearsay evidence of an encrypted fax which was central to one of the main charges.89 Despite it being common cause that the author of the encrypted fax was unreliable and dishonest, the court found that it was highly improbable that the content of the fax would have been false.90
The probative value of the evidence in this case91 is enhanced by the following:
The fact that the statements were broadcast is not in dispute.
The broadcast was on national television. The broadcaster’s reputation for credible, reliable and accurate reporting would have been at risk if it disseminated false information. Moreover, it could find itself being disciplined by the media regulatory authorities.
There was no retraction or correction by the broadcaster or the Minister despite the potentially defamatory content of the statements.
The broadcast was reported on in the print media, also without attracting any retraction or correction from the Minister.
In Shaik v The State, the author of the encrypted fax refused to come to South Africa to testify. The Supreme Court of Appeal admitted the fax because it was open to the accused to call him as a witness or apply to have his evidence obtained on commission.
In this case the reason why the evidence was not given by the person upon whose credibility the probative value of the evidence depends92 was because that person was the Minister, who failed to testify. He had direct knowledge of what he said. Unlike Shaik who had the advantage of having attended meetings where the fax was discussed, the applicant was not present when the Minister allegedly made the statements. Contesting the authenticity of the statement lay firmly, if not exclusively, within his grasp. The applicant would have been at a disadvantage if the Minister testified and denied having made the statement. He chose not to testify and must bear the adverse consequences of that election.
Whereas, in Shaik v The State (above) the court found that the accused would not be prejudiced because cross-examination of the author of the fax was unlikely to yield positive results for them93 any prejudice that the Minister might endure by the admission of the content of the broadcast94 could have been avoided if he had testified.
That is a factor95 that leads inevitably to a finding that on the probabilities, the Minister did make the statement. As a highly qualified lawyer he would have been aware that the statements were potentially defamatory and that his failure to correct any inaccuracies in the broadcast could aggravate damages.
In all the circumstances the evidence of the content of the broadcasts is admitted in the interests of justice.
The philosophy and purpose of the PDA
Internationally, there is growing recognition that whistleblowers need protection.96 Whistle-blowing is healthy for organizations. Managers no longer have a monopolistic control over information.97 They have to be alert to their actions being monitored and reported on to shareholders and the public. Everyone is alive to their loyalty to the organization. As a safe alternative to silence, whistle-blowing deters abuse.98
If employees did not turn a blind eye or were not afraid to rock the boat and if employers did not turn a deaf ear or blame the messenger instead of heeding the message, many catastrophes could have been averted.99
Whistle-blowers are not impipis, a derogatory term reserved for apartheid era police spies. Whistle-blowing is neither self-serving nor socially reprehensible. In recent times its pejorative connotation is increasingly replaced by openness and accountability.100 Employees who seek to correct wrongdoing, to report practices and products that may endanger society or resist instructions to perform illegal acts, render a valuable service to society and the employer. Still, of 230 whistleblowers in the United Kingdom and the USA, a 1999 survey found that 84 percent lost their jobs after informing their employer of fraud, even though they were not party to it.101
Employees have a responsibility to disclose criminal and other irregular conduct in the workplace.102 Public servants have an obligation to report fraud, corruption, nepotism, maladministration and other offences.103 A company can have a cause of action against its directors for failing in their duty to report wrongdoing.