Former National Lotteries Commission executive heads to Labour Court

Sershan Naidoo says he was questioning the use of Lottery funds

Photo of National Lotteries Commission board

Senior National Lotteries Commission executive Sershan Naidoo is headed for the Labour Court. Archive photo: Raymond Joseph

By Ciaran Ryan

9 October 2019

Sershan Naidoo, for many years the public face of the National Lotteries Commission (NLC), was dumped in December 2017 after 19 years at the NLC for reasons that remain shrouded in mystery. He wants his job back and is now heading to the Labour Court after failing to get reinstated at a Commission for Conciliation, Mediation and Arbitration (CCMA) hearing more than a year ago.

Naidoo was a member of the NLC agency tasked with evaluating funding requests for Arts, Culture and National Heritage. He started as a driver, then worked as media spokesperson before joining the team tasked with evaluating funding.

What started out as a dispute over the terms of his employment has morphed into something more sinister, says Naidoo: “I was questioning how the NLC was allocating funds, and I was interrogating some applications which looked suspicious,” he says.

It’s not known whether this had anything to do with his dismissal, but Naidoo suspects that it does. Nor is he the only person to face the axe at the NLC in recent years - There were 48 labour relations matters in the last financial year, which is high for an organisation with 307 staff.

Naidoo was offered a new contract post as part of the NLC restructuring and, after discussions with NLC executives, he was assured that he would receive the same salary he had earned in his previous permanent position. But when handed the new contract by Thabang Mampane, the NLC’s Commissioner, he was offered 20% less and lost all accumulated benefits.

Naidoo says he refused to sign the contract as it did not reflect the salary previously agreed, and had discussed the matter with NLC chair, Prof Alfred Nevhutanda, who assured him that he would get an independent labour expert to address this. After Naidoo had reminded the NLC that his contract was outstanding well into his first year of service, and questioned the terms not being in line with discussions, the NLC claimed that he had repudiated the contract. The NLC’s acting commissioner, the controversial Phillemon Letwaba, then had him escorted by security staff off the premises and he has been in dispute with the organisation ever since.

Naidoo took a case of unfair dismissal to the CCMA.The NLC argued that Naidoo had been given an opportunity to resolve his employment dispute but had chosen not to, and that he had failed to follow internal grievance procedures. Notwithstanding his 19 years of service, the CCMA found that there was no employment contract and that Naidoo had not been dismissed. Naidoo has taken this decision on review to the Labour Court.

“I was marched out of the NLC offices like a criminal by security on the day I was dismissed,” says Naidoo. “How do you follow internal grievance processes under those circumstances?”

“Something more sinister was behind my dismissal, and it has to do with the fact that I was diligent at my job and was asking uncomfortable questions about funding – which I was employed to do – and others in the organisation started to get uncomfortable.”

Naidoo believes his dismissal had to do with his ruthless interrogation of funding requests to the NLC. He is known to be a stickler for detail.

“We would get applications to fund grand pianos for rural schools across the country. Some of the requests were not realistic, and when I traced it back, though the funding requests came from different entities, the line items were identical and were really coming from the same source. We got many requests for funding from schools, and we would generally assist them by giving an amount of R50,000 for agricultural projects and R50,000 for musical development. But then we started getting unusual requests for big ticket items such as orchestral instruments and grand pianos, with no evidence of who was going to teach the different instruments. Once we saw this, we put in place measures to limit the extent to which we funded schools.”

“There were also organisations applying for large grants without the necessary experience. Questionable line items for food, travel and accommodation seemed to receive priority. VIP tents and toilets too. We were strict, on my insistence, with regards to what we would actually fund. We’d ask for proof of experience and demonstration that there was actually a need.”

Naidoo has written to the Department of Trade and Industry and former DTI Minister Rob Davies repeatedly since his dismissal in December 2017, as well to as the Parliamentary Portfolio Committee on Trade and Industry and the Presidency, with no success.

The NLC has come under particular scrutiny for its so-called pro-active funding. The Lotteries Act was amended in 2015 to allow the Commission to conduct research on “worthy good causes” and invite applications for grants without having to go through the regular funding approval process. This opened the door for corruption, as reported by Groundup.

Naidoo says the introduction of pro-active funding in 2015 was an open invitation to game the system. “Those arts and culture projects that received proactive funding would be part of our report. We were surprised to see that junior staff had been adjudicating on them, as the only persons allowed to make decisions on them were the distributing agency members, or the NLC Board if there was an appeal. That’s where we raised concerns and refused to have them as part of our report.”

In one instance Naidoo came across “research” by the NLC repackaged as an outside application for funding, down to the last cent, he says.

In the 2018 financial year the NLC adjudicated nearly 12,500 grant applications and disbursed more than R2 billion in grants, of which roughly R140 million was for pro-active funding. The Arts, Culture and National Heritage agency has an annual budget of about R300 million. Charities account for nearly half the total annual disbursement and sport 22%.

In response to a request for information from GroundUp, the NLC replied: “The matter you refer to with the said employee has been settled at the CCMA. The NLC will not be commenting further on the issue.”

Questions were also sent to the Trade and Industry Minister Ebrahim Patel but no reply had been received at the time of publication.

Naidoo is now waiting for his application for review to be heard at the Labour Court.