Edu­ca­tion offi­cials’ sack­ing upheld after R2m ghost scam

In the mat­ter of Gauteng Depart­ment of Edu­ca­tion v Gen­eral Pub­lic Ser­vice Sec­toral Bar­gain­ing Coun­cil and Oth­ers (JA141/2022) [2025] ZALAC 2; [2025] 5 BLLR 435 (LAC) (22 Janu­ary 2025) the Labour Appeal Court (LAC) upheld the Gauteng Depart­ment of Edu­ca­tion’s (the employer) dis­missal of four employ­ees who were accused of involve­ment in a ghost employee scheme that cost the depart­ment nearly R2 mil­lion. The employ­ees, based in Krugersdorp, were charged with mis­con­duct relat­ing to the appoint­ment and pay­ment of fic­ti­tious edu­cat­ors between Janu­ary 2014 and Novem­ber 2015.

The fraud­u­lent appoint­ments, which included four ghost employ­ees, were pro­cessed through the gov­ern­ment’s Persal payroll sys­tem.

The evid­ence showed that the employ­ees’ user­names and pass­words were repeatedly used over a two-year period to author­ise the trans­ac­tions.

Although the pay­ments were made into accounts con­trolled by a per­son­nel officer, who was later crim­in­ally con­victed, the employer alleged that the employ­ees had shared their login cre­den­tials with him and par­ti­cip­ated in the scheme.

The employ­ees denied this, claim­ing they did not know how the per­son­nel officer obtained their reg­u­larly updated pass­words.

At arbit­ra­tion, the dis­missals were found to be sub­stant­ively unfair.

The Arbit­rator reasoned that the employer had failed to prove “actual theft” by the employ­ees and con­cluded that the case against them was based on pre­sump­tions.

The employ­ees were ret­ro­spect­ively rein­stated with back­pay.

The employer’s attempt to over­turn this award in the Labour Court was unsuc­cess­ful.

The Court agreed with the Arbit­rator that there was no evid­ence dir­ectly link­ing the employ­ees to the fraud.

It also noted that the employ­ees them­selves had invest­ig­ated the per­son­nel officer, who resigned and was later pro­sec­uted.

Costs were awar­ded against the employer, with the Court cri­ti­cising its pur­suit of what it called a “hope­less review applic­a­tion”.

On fur­ther appeal, the Labour Appeal Court found that both the Arbit­rator and the Labour Court had mis­dir­ec­ted them­selves by focus­ing too nar­rowly on the charge sheet and by fail­ing to assess the prob­ab­il­it­ies prop­erly.

The Court high­lighted that the employ­ees changed their pass­words monthly, yet the per­son­nel officer repeatedly accessed their cre­den­tials over almost two years.

Their inab­il­ity to explain how this occurred weighed heav­ily against them.

The LAC ruled that it was reas­on­able to con­clude the employ­ees were involved, whether by shar­ing their cre­den­tials or fail­ing to safe­guard them.

It stressed that the 2013 policy made employ­ees respons­ible for all activ­ity under their user IDS. The Arbit­rator’s find­ing was there­fore unreas­on­able, and the Labour Court erred in uphold­ing it.

The LAC rein­stated the appeal, set aside the Labour Court’s orders, and sub­sti­tuted them with a rul­ing that the dis­missals were both pro­ced­ur­ally and sub­stant­ively fair. No costs order was made.

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