Mkhwebane asked President Cyril Ramaphosa to take disciplinary action against Gordhan for violating the constitution by approving former Sars deputy commissioner Pillay’s early retirement and full pension benefits.
Her report was released on Friday.
Gordhan was the minister of finance when he took the decision in August 2010.
The public protector investigated the matter based on a complaint from an anonymous person. In her findings she said investigations showed Gordhan had irregularly approved the retirement and by law he should not have approved Pillay’s request for early retirement and full payout.