The former Eskom CEO, Brian Molefe, fights his dismissal via the Labour Court. Patrick Deale from Deale Attorneys joins the Afternoon Drive with John Maytham on CapeTalk, sharing his expert labour and commercial law perspective on the situation.
John Maytham (CapeTalk):
If you just joined us in the last minute or so, you might have missed the news that Brian Molefe had approached the labour court today for an urgent hearing on Eskom’s Board accepting the verdict of the ANC – communicated via the Public Enterprises Minister Lynne Brown, that the reinstatement of Brian Molefe as the CEO of the service provider should be revoked.
He was unable to do so because answering papers from the Minister and from Eskom were not available. We know that the DA is going to court tomorrow morning. It appears with Brian Molefe’s agreement for an order of the court, which will state that Brian Molefe will not go to any Eskom offices, will not engage in any way with Eskom businesses until the outcome of his Labour Court. And the DA is going to apply to be a party to the Labour Court action as well when it happens.
I haven’t read Brian Molefe court papers, so I don’t know exactly what they contain. There’s been a very brief summary in the media suggesting that he is saying to the Labour Court that the decision to him remove as reinstated CEO was not rational.
Patrick Deale is a labour lawyer on the line to us from Johannesburg. None of this, Patrick, has been rational. The only rational thing was getting rid of Brian Molefe it seems to me. But the labour court might not think differently. Does he have a case of any sort?
Patrick Deale (Deale Attorneys):
I think he does have a case, John.
And let me say that I agree with you – it’s a real mess this. It started essentially with an error by the Board when they had a conversation in November last year about the basis upon which Molefe would exit. So, that’s where the problem started.
What is his case then, that you think he has?
Well, I think the case is that he effectively signed a reinstatement agreement. And the reinstatement agreement followed a whole sequence of events which I could take you through briefly. But maybe starting from the end…
I don’t think it’s possible to take us through it briefly! [Laughter]
I mean if you want to follow a maze of legal niceties, it would take a day or two!
But look, in short, there was an agreement of termination by mutual consent between the Board and Molefe. And this followed the Public Protector’s report which painted him in a bad light and proposed that there be the commission of inquiry.
So Molefe felt ‘burdened’ – was the term used by the Board – and the Board also felt it was under pressure. So, they had a conversation and they came up with a termination agreement. And unfortunately, that termination agreement went wrong. Instead of terminating on the basis of retrenchment rules, they terminated and give him early retirement. Instead of doing it in terms of the retrenchment agreement, they did it in terms of the other way around.
So effectively what has happened is that the Board had to rescind it because the Minister stepped and said, ‘I’m not going to accept this’. And the Board had to say they made a mistake by using the wrong rules. They agreed with Molefe to reinstatement and there is a signed reinstatement agreement putting him back into his position which sweeps away all of the processes that preceded it.
So effectively Molefe is in a position where he effectively is entitled to his job in terms of a written contract of reinstatement with the Board of Eskom.
But surely there is an argument that that written contract is based on the fruit of the rotten tree?
…That that reinstatement contract cannot be rational because of the all the irrationality that preceded it?
There will be arguments for sure along those lines. There is a conference of political dealings in this. There is an influence of social outrage about it. But there is also the labour law issues in relation to it as well. And all of these things are getting entangled.
In so far as rationality on the laws’ concerned: Yes, it could be argued that the Board should have known better, it shouldn’t have made a mistake. Why did they make a mistake? Why did they enter into an agreement when they ought to have known that they never didn’t the power to do so? Is that a bit sinister or is that not sinister? Secondly, could they have made an honest mistake? Had it been only their mistake, or it could have been having previous experience with Molefe [Unclear – 5:00-5:04] and the others not? Then, the party who wasn’t mistaken, can accept or enforce the agreement?
And so, essentially, it comes down to the bottom line that there is a reinstatement agreement. And whether that reinstatement agreement is valid or not – will be what the contest will be about. On paper, it looks as though it could be binding. So that’s why I’m saying he could well have a case. That would force the Board to have a conversation with him about termination on different agreed terms – rather than the terms that they originally agreed with him, which was wrong [Unclear – 5:49-5:52] for whatever reason. Then it led to the termination by mutual consent – but also his reinstatement.
Basically, it’s back to square one.
Which is going to fuel those people who believe that Brian Molefe is doing this. And probably he and Ben Ngubane have plotted a strategy – which sees them having that different conversation, which you referred to there, Patrick – and that different conversation leading to a significant pay-out. Brian Molefe accepting that he will not go back to Eskom, ‘Let me not go back to Eskom with many millions of Rands, rather than with the relatively few millions of Rands that I sit at the moment.’
Well, exactly. It does give you a sense of shock that a person with two years’ service odd, with three years left in his contract, could be paid out R30 million. The sense of outrage, the sense of shock that it gives you, leads you to suspect that this is an abnormal situation. That is for sure.
But just on the legal papers, as far as I’ve seen, I haven’t seen, like you, the legal papers that Brian Molefe put in over the weekend and today. I’m basing what I am saying from the original papers that the Board put in in relation to the DA and EFF’s cases – which they’ve actually joined together – which will be heard tomorrow.
Patrick Deale, labour lawyer, thank you very much. Far from being a slam dunk against Brian Molefe, we are told.
End of interview transcript.