The Passenger Rail Agency of SA (Prasa) is blowing millions of rand of taxpayers money in botched attempts to sack executives while paying them millions more to sit at home on suspension.
In the latest incident, Prasa ignored an arbitration ruling this month to reinstate CEO Zolani Matthews after the state-owned entity (SOE) tried to axe him on a security clearance issue related to his dual citizenship.
Instead, chair Leonard Ramatlakane wrote to Matthews on Friday saying his services were terminated “due to unsatisfactory performance”.
He said the board had decided to implement a decision it took on November 29 to fire Matthews based on non-performance.
“The decision of the board could not be formally communicated to you at the time due to the fact that the board had also resolved to terminate your employment contract for reasons associated with your non-disclosure of your dual citizenship.
“Your employment contract is hereby terminated. The reason for termination is that your probation was not confirmed due to unsatisfactory performance,” wrote Ramatlakane.
This follows a raft of correspondence this week between the two parties in which Prasa said it had decided to take the arbitration ruling on appeal at the labour court, and had applied that the reinstatement should not be enforced pending the review. The agency, through its lawyers De Swardt Myambo Hlahla, also refused to consent to Matthews’ request that judge Robert Nugent’s ruling be furnished to President Cyril Ramaphosa, where he is also appealing for an intervention.
Matthews' lawyer Peter Harris said the rail agency's latest move was unlawful.
“Prasa comprehensively lost the arbitration before judge Robert Nugent and has now cooked up a different reason to terminate my client's employment. Their conduct is not only unlawful, it is incomprehensible. It is also a great waste of taxpayers' money,” said Harris.
Also in the firing line are senior executives Pearl Munthali, Tiro Holele and head of legal Martha Ngoye, whom the labour court in separate cases ruled should be reinstated.
The agency lost attempts to fire the three, with costs, but still went on to appeal, unsuccessfully. All three are still on suspension on full pay, with salaries on average of more than R2m a year.
Ngoye helped Prasa win cases in the unlawful and corrupt multibillion-rand contracts awarded to Swifambo for the tall locomotives, and Siyangena Technologies.
She and Holele revealed at the state capture inquiry the depth of the rot at the agency during former CEO Lucky Montana’s tenure, which was rooted out by the former board chair Popo Molefe in 2015.
Ngoye and Holele were fired last year by the new board led by Ramatlakane with claims that they had outstayed their contracts. The dismissals were found unlawful and overturned in court, with an order they be reinstated. Prasa appealed and lost with costs.
Prasa has petitioned the Johannesburg Labour Appeal Court to overturn the decision.
The rail agency refused to reinstate the two, instead bringing fresh charges against them, claiming it had held an investigation that found improper conduct by the two in numerous contracts, including the Swifambo deal.
This was despite a forensic investigation by Werksmans Attorneys in 2015, commissioned by Molefe, which did not uncover any findings against them.
Prasa also added allegations relating to the state capture commission after amending its charge sheets, claiming Ngoye and Holele made “disparaging statements in public and elsewhere about the current board of Prasa”.
Last June, Prasa wrote to the commission in an attempt to block Ngoye from testifying again, claiming her testimony on her dismissal was outside the terms of reference of the commission.
This irked the commission chair, acting chief justice Raymond Zondo. “If Prasa people are engaged in corruption, people are entitled to come to this commission and say so,” he said.
Munthali, the agency’s head of development foundation, who has spent about R1.3m in her fight against Prasa, recently won her civil claim against the SOE for defaming her in media statements about her suspension in 2019. In her labour court case last year which Prasa also lost and was instructed to reinstate her, judge Edwin Tlhotlhalemaje agreed that Prasa had acted in bad faith and its conduct amounted to gross abuse of power.
On average, the four executives have spent more than R4m in litigation against Prasa which means the agency has spent as much of taxpayers’ money in defending and appealing decisions.
In February, the Sunday Times reported that transport minister Fikile Mbalula warned Matthews months before he was fired that the Prasa board planned to remove him.
In a series of text messages, Mbalula told Matthews that Ramatlakane saw him as a threat to his “self-enrichment” scheme and was leading the charge.
At the time, Mbalula declined to comment and Ramatlakane responded to the text messages saying: “I don’t know anything about that.”
Prasa this week declined to reveal the amount it has incurred in the court cases involving the four executives, saying these were confidential until published in its annual report.
“In all legal matters, costs are unavoidable as we enlist legal professionals to handle matters in the interest of the public which Prasa is part of. Therefore, the costs incurred and/or to be incurred are part of protecting the integrity and image of Prasa as not doing so would have been deemed irresponsible and neglect of the board’s fiduciary duties,” said spokesperson Andiswa Makhanda.
In the Matthews’ appeal the agency said it was within its constitutional rights to appeal areas where judge Nugent had “erred”.
Wayne Duvenage, CEO of civil action organisation Outa, said Prasa’s executive and its board should be held personally liable for litigation costs from taking bad advice.
“It comes down to the issue that they are losing all the time, so there now must be a personal cost attached so that the individuals in positions of authority, such as the chairpersons and CEOs, think twice and take good advice, because this is costing you and I.”
He said there had been abuse of state resources by those in positions of authority to squeeze employees financially through litigation.
“We get an impression that there is bad advice given, where people just go through litigation. They use state money and the poor people have to defend themselves and run up personal costs. Sometimes they win just through the sheer fact of being litigious.
“We saw that at SAA where eventually Thuli Mpshe and Sylvain Bosc had to say, 'give me a settlement and then I am out of here'. One worries that might happen with the Marthas and Tiros, so we really appreciate the fact that they have stood their ground,” said Duvenage.
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