Johannesburg - Experts have warned that payment of huge sums of taxpayers’ money as golden handshakes could further erode public trust in the state.
Efficient Group chief economist Dawie Roodt said while these hefty payments were meant to reward excellence, golden handshakes in South Africa were used as a way of getting rid of public servants.
Suspended South African Revenue Service commissioner Tom Moyane is the latest senior public sector employee to ask for a payout.
TimesLive reported that Moyane has urged President Cyril Ramaphosa to consider paying him a multimillion-rand settlement to walk away from his position, including bonuses “due to him” for successfully collecting trillions of rand.
Moyane is currently facing disciplinary charges linked to alleged misconduct and a violation of his duties and responsibilities.
“I will not be surprised if there is also a case of blackmail, but I think this thing has become established in South Africa, and it’s not a good thing. Golden handshakes should absolutely be the exception.
“They should be paid when the employer, the state, is at fault and not the employee. People should be getting fired,” Roodt said.
He noted there were typically two types of government golden handshakes.
The first occurs when a large amount of money is paid from the pockets of taxpayers to a particular person who is rewarded despite having engaged in misconduct or their performance being inadequate.
The second type of golden handshake occurs when, for political reasons, the government decides to remove an appointee without reason, and is forced to pay the individual out for the remainder of the term of their contract in order to enforce a dismissal.
“The payments include severance payments, outstanding leave, legal costs, restraint of trades and pay in lieu of notice; these are all justifiable in accordance with employment contracts and relevant legislation.
“However, in one form or another, these payouts seem far larger than necessary. It is also a matter of mismanagement of public funds at state-owned enterprises; this is one of the examples of the misuse of public funds,” Roodt added.
Ian Cruickshanks, chief economist at the South African Institute for Race Relations, said golden handshakes could be seen as illicit financial flows between those who are asking for them and those who are making the payments.
“It’s wrong in principle, it’s morally wrong. The public deserves more transparency on issues that lead up to people being paid these huge amounts of money,” he said.
Former Eskom chief executive Brian Molefe received a R30million golden handshake last year - he was later ordered by a court to return R11m he received - while former national director of public prosecutions Mxolisi Nxasana received a R17.3m golden handshake in 2015.
The high court in Pretoria this year found that Nxasana’s removal was invalid, but did not order that he be reinstated.
Instead, the court ruled that he must pay back the R17m.
A Fin24 report revealed that over the past seven years, the SABC has paid R42.6m in golden handshakes to expire the contracts of several of the broadcaster’s executives.