Despite two legal opinions recommending the City of Johannesburg defend its decision to fire an axed internal auditor in court, a settlement agreement The Citizen has seen states that he was to instead receive three months’ salary plus annual increases along with full reinstatement.
The documents suggest the official was to return to work on 26 September (today). The City has not confirmed this as yet, but if it has happened it would raise serious concerns around whether Mayor Herman Mashaba’s administration has followed municipal legislation in approving the reappointment.
In the lead-up to the reappointment, Mashaba’s chief of staff Michael Beaumont and MMC for service delivery Nico De Jager allegedly convened a meeting on Thursday last week (21 September) in the Council Wing Boardroom with City Power acting MD Tiaan Ehlers and acting group executive director of corporate services Christo Marais, allegedly to instruct City Power to reinstate the dismissed internal auditor, who The Citizen is not naming for the moment as the person has not been reached for comment as yet.
At this meeting, which was also attended by head of legal services Isaac Mogashoa, it was decided that “the necessary structural arrangements and budget must be created in City Power to give effect to the settlement”.
The settlement being referred to was the reinstatement of a fired City Power internal auditor whose employment with the municipally owned entity was terminated on the 28th of April last year. City Power had charged the official with contravening the internal auditors’ code of conduct at the time.
The Citizen has seen more than a dozen items of electronic correspondence that seem to show how, in alleged contravention of the Municipal Systems Act and Municipal Finance Management Act (MFMA), Beaumont and De Jager interfered in an administrative matter that should have been handled by the city manager and group corporate and shared services.
The documents suggest that the case dates back as far as 2014 and the internal auditor possibly missed the prescribed period to take the matter of his axing on arbitration with the CCMA. Several sources The Citizen contacted allege the planned reappointment of the auditor forms part of Mashaba’s attempts to appease an SA Municipal Workers’ Union (Samwu) splinter group (Samwu 2).
Another source informed The Citizen that Mashaba had been in a hurry to ensure the axed employee was in office prior to the upcoming motion of no confidence against the mayor. The High Court in Johannesburg is currently considering an ANC application to conduct the vote through a secret ballot.
Before the decision to reinstate the internal auditor was communicated to City Power, the entity’s acting MD wrote to Marais and Mogashoa and cited several risks posed by the proposed reappointment.
“Possibility of Settlement – The risk for City Power is as follows: The position has been filled. To create a position specifically will contribute to the many labour complaints (IMATU and SAMWU faction 1) in a similar vein which poses risks to City Power and taunts the perception and credibility of Management.”
The risks, Ehlers stated, were too great for him as an acting officer to take on his own.
“To appointment [sic] without following proper recruitment processes is problematic. Option A is therefore problematic that the City Power team is not prepared to support a settlement as proposed and the risk is too great for me as an acting MD to take on my own. In view of no support from the City Power team (Risk and HR), I am very reluctant to proceed on my own,” a cautious Ehlers wrote.
He further advised: “I also think the risk to the City and Mayor is big and we should rather avoid this option.”
He cautioned against concluding the matter before the end of September, saying: “This is not going to work as well … The attorneys are committed to other cases. To change the attorneys at this stage will be problematic and brings the City Power Insurer into play.”
He, however, suggested Thursday 21 September to meet with the attorneys.
The following day an email, the author of which The Citizen was unable to determine, was sent to the attorney handling the case. The email lamented “that the private arbitration conducted under the auspices of the appointed private arbitrator [name withheld] is taking an inordinate amount of time to conclude”.
It also cited “exorbitant costs”.
Despite a legal opinion from two legal firms who reached a conclusion that they can “see no reason why City Power or its shareholders should interfere with the existing decision relating to the dismissal of [name withheld]”, the email to the lawyers instructed that the internal auditor be reinstated to “his erstwhile position within City Power with effect from 26 September 2017”.
During the same action-filled date of 21 September, a “settlement agreement” was signed between City Power and the internal auditor in which the City agreed to withdraw all claims and agreed to pay him “an amount equivalent to three months’ salary plus annual increases thereon from date of dismissal to date of reinstatement”.
The agreement bears the signature of the internal auditor and a witness bearing a title of a practising advocate and Marais. Insiders within the City said they were not only alarmed at the supersonic speed the settlement was concluded, but pointed out that, in terms of delegation of authority, the duly authorised official to sign on behalf of the City was Ehlers.
Instead, Marais signed the agreement in his capacity as acting head of corporate services.
The Citizen contacted Mashaba’s acting director of mayoral communications Luyanda Mfeka on Friday for comment and provided him with a deadline of Monday evening. Mfeka said that, due to the unavailability of officials, the city was only able to respond to the allegations by close of business on Wednesday.
Their responses will be reflected once they are received.