Court victory for SARS whistleblower

Labour Court orders reinstatement of executives dismissed in 2015

By Tania Broughton

24 August 2022

Two executives dismissed during the controversial restructuring of the South African Revenue Service in 2015 have been reinstated by the Labour Court. Archive photo: Ashraf Hendricks

Two former executives of the South African Revenue Service (SARS), who were dismissed “for operational requirements” during the controversial Bain restructuring of the tax authority, have been reinstated to their previous positions.

Johannesburg Labour Court acting Judge Smanga Sethene has ruled that the dismissals of Hope Mashilo and Tshebeletso Seremane were unfair. Judge Sethene said Mashilo had been a whistleblower, and had made a protected disclosure about the hiring of Bain by then SARS Commissioner Tom Moyane.

Judge Sethene also said SARS “deserves the utmost censure” for not settling the matter with the two women in light of the negative public findings on the appointment of Bain and the fact that Bain had reimbursed the fees earned.

Because it had tried to “defend the indefensible”, he ordered SARS to pay punitive costs.

Read the judgment.

Judge Sethene said the case “captured the hardships endured by two single mothers and senior executives during the infamous restructuring of SARS by Bain, during the tenure of Commissioner Tom Moyane”.

“Their main sin was to question the integrity of the 2015 restructuring. Their positions were downgraded … They repeatedly requested information about the details of the positions that were being dictated to them … and refused to accept them,” he said.

This led to their dismissals.

Mashilo told the court that in 2015 she was the executive for workplace wellness, earning R1.5 million a year. She said Bain had “unveiled” the new structure at a meeting in August that year. In October she realised that her position had been phased out at executive level and had been downgraded.

She had no-one to report to and unsuccessfully attempted to get clarity on her new role.

From April 2016 to August 2017, she earned a salary for doing nothing - she switched on her computer and then read newspapers.

She was then offered the position of “Domain Specialist”. Again she asked for details of the position.

She testified that those executives who accepted “Domain Specialist” positions had no “meaningful jobs”. Even switching on computers was a waste of time as they were not receiving any emails from anyone. They were shunned.

And yet they continued to earn their normal salaries and they received bonuses.

Letter to Moyane

Mashilo then penned what she called “Breaking the Silence” - a missive which she emailed to the Minister of Finance at the time, Malusi Gigaba and Yunus Carrim, the chairperson of the Standing Committee on Finance.

She copied it to Moyane.

In it she described her personal circumstances and also described what she said was the unlawful appointment of Bain and the fact that Domain Specialists were being paid for doing no work.

This, Mashilo said, was a protected disclosure in terms of the Protected Disclosures Act, which gives whistleblowing employees protection from dismissal.

Soon afterwards, she was fired and escorted off the premises.

Judge Sethene said Mashilo had testified that she had lost everything and she was “a wreck”.

But she felt vindicated when, due to her protected disclosure, Bain had returned its fees of R217 million with interest.

A salary for doing nothing

Seremane was the Executive of Integrity and Organisational Culture, also earning R1.5 million a year.

She said she realised that during the restructuring there was a “lapse of integrity and corruption issues were becoming prevalent”.

Her position was also downgraded. She was also earning a salary for doing nothing.

She was also offered a position as a Domain Specialist but she refused to take it because she received no information about what the position entailed and it was not on the approved structure. She was also dismissed.

In support of their case, Sydwell Phokane, former Executive: Customs and Compliance Audit, said he had reluctantly taken up a Domain Specialist position. He had been advised by a mentor to “just accept and lie low”. He said during 2016 to 2019 he had “no role to play” but received performance bonuses.

He testified that the process was flawed, there was a culture of fear, and the restructuring was not in the interests of SARS.

Judge Sethene said on the evidence, it appeared that the restructuring was “steamrolled”. It was startling, he said, that Moyane had decided to restructure only a month after becoming commissioner.

“It must be stressed that the legislature had never envisaged or intended the dismissal for operational requirements to be laced with corruption or activities designed to further the objectives of state capture. Let alone, to purge employees for ulterior motives.”

“None of the SARS witnesses testified about economic difficulties to warrant dismissal for operational requirements. SARS tendered no evidence to demonstrate that Domain Specialist positions were on the approved structure … or that they were performing any meaningful jobs,” he said, finding that SARS had failed to justify the two women’s dismissals for operational reasons.

He said Mashilo’s email was a protected disclosure and, as a whistleblower, she had performed “one of the most underrated and thankless constitutional duties”.

The judge said both women had suffered injustice.

He ordered that they be retrospectively reinstated as SARS employees as of the date of their dismissals with full benefits and that they report for duty on 1 September.