A STRUGGLING Limpopo municipality has been severely criticised by the Labour Court for paying its former municipal manager a R1.3 million golden handshake despite being found to have unlawfully invested R80m with VBS Mutual Bank.
The Ephraim Mogale Local Municipality in Marble Hall reached a settlement agreement with Monica Mathibela in August 2020 after a disciplinary hearing recommended that she be suspended without pay for three months and attend short courses in management, investment and finance in order to sharpen her skills.
She had pleaded guilty to most of the charges against her.
The terms of the settlement, as per a council resolution, were that the municipality, without any admission of liability, would pay Mathibela R1.292m, which would be 12 months’ salary in exchange for her resignation.
If the Ephraim Mogale Local Municipality failed to pay within 30 days, the golden handshake would accumulate interest, and if it did not effect the payment, Mathibela would also be allowed to proceed with execution against the municipality, seek compliance with the settlement agreement or an order of the court and her former employer would bear the costs of the execution on a party scale.
The municipality made a U-turn five days later and informed Mathibela that it was not going to pay but would instead seek to overturn its own council resolution after she indicated that she intended to seek to have the deal made an order of the court.
According to the Labour Relations Act, the Labour Court may make any arbitration award or settlement agreement an order of the court.
In her scathing judgment, delivered on June 7, 2023, Labour Court Judge Connie Prinsloo described the matter as an example of a “display sheer incompetence, alternatively a wilful disregard of the applicable prescripts on different levels”.
”It is almost unimaginable that a single case can display such spectacular incompetence or ignorance or wilful disregard for what is right and wrong, for what is moral and what is not and what is expected of municipalities and their officials and councils.
This is a case where the parties turned to this court to fix the consequences of the incompetence, alternatively, the wilful disregard of applicable prescripts,” the judge said.
As a result, Judge Prinsloo refused to set aside or made the R1.3m settlement agreement an order of the court.
The municipality also wanted the sanction against Mathibela to be substituted with one of dismissal.
Judge Prinsloo said the reality was that the Labour Court is not a fixer but a court of law that can grant relief only insofar as the relief sought falls within the confines of the law.
The chairperson of Mathibela’s disciplinary hearing, Advocate Jimmy Hlongwane, according to Judge Prinsloo, was incompetent and that Mathibela pleaded guilty to serious transgressions, which pointed to either her sheer incompetence or wilful disregard of the prescripts and dereliction of duties.
The judge said Hlongwane ignored the seniority of the position she held, the consequences of her misconduct and the seriousness of transgressing provisions of the Municipal Finance Management Act.
She said Hlongwane was fixated on her clean disciplinary record, ignoring all other material factors, which justified Mathibela’s dismissal.
Hlongwane’s ruling, Judge Prinsloo continued, was irrational and unreasonable, given the seriousness of the misconduct, the senior position held by Mathibela and the breakdown of the trust relationship and that he placed too much emphasis on her clean disciplinary record in circumstances where a dismissal was warranted.
In his ruling, Hlongwane found that there was insufficient evidence to demonstrate that Mathibela was grossly negligent and that her misconduct was of such a serious nature that it warranted dismissal.
Instead, he found that Mathibela was misled and that the Limpopo provincial treasury could have done more to ensure that municipalities were aware that they were not permitted to invest with VBS and that with the necessary support and training and that she could improve her knowledge of investments and finance.
Mathibela and the municipality’s former chief financial officer Kgabo Ramosibi also face civil claims to recover the R80m invested with VBS at the Polokwane High Court.
Last year, the municipality reportedly stated that it only received R6.5m of the R80m.
Ephraim Mogale mayor Given Moimana told the Sunday Independent that he has not yet been informed about the judgment.
”However, I will enquire about it, and once (we have) studied the judgment, we will then make our attitude known,” he said.
Mathibela and her legal team could not be reached for comment.