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False Representation By An Employee – The Consequences can accumulate

In Umgeni Water V Naidoo And Another (11489/2017P) [2022] ZAKZPHC 80 (15 December 2022) The employer was involved in the bulk distribution of water in KwaZulu-Natal. The state-owned entity (SoE) designed a graduate development programme. The employer accepted selected graduates from universities onto the programme with the hope that they would remain with the employer once they had successfully completed it.


The employee successfully applied for a place on the programme. The requirement for the post was, at least, a bachelors degree in engineering.


The employee said that he had a B.Sc. degree in Engineering that he had obtained from the University of KwaZulu-Natal (UKZN). He produced a copy of his degree and academic results which resulted in his appointment.


The employer alleged that the employee’s qualification were false and fraudulent and that he did not have a B.Sc. degree from the University, or from any other university. The SoE gave evidence that it would not have appointed the employee if it had known that the employee did not have the relevant qualifications. The employee worked for the SoE from 1 September 2008 until the employee’s resignation, in 2016. Upon discovering of the fraud, the employer sought the repayment of all amounts that it paid the employee. The SoE applied to have the monies recovered from the employee’s pension benefit.


The essential issue to be determined, therefore, was if the employee had graduated from UKZN with a B.Sc. degree in Chemical Engineering or if there was fraud present.


The Employee’s Degree Could Not Be Verified                           

The employee presented nothing to the employer to substantiate that he had a degree. He then tendered his resignation and said that he would serve out his month-long contractual notice.


This was not accepted by the employer, as disciplinary proceedings had by then already began against the employee. However, a few days later, on 29 November 2016, the employee submitted another resignation letter, indicating that he now would be resigning with immediate effect.


The Disciplinary Process

The employer called a witness from the university to testify that the employee begun his studies in the Faculty of Chemical Engineering in 2002 but was thereafter excluded from that faculty in 2004 because he had failed to make significant academic progress with his studies. By way of contrast, the academic record relied upon by the employee showed six years of successful study and made no reference at all to him being excluded from the faculty.


The Court Process

The High Court (HC) found that the employee had committed fraud and further that the employer intended to contract with the employee on the basis that it believed that he had the required degree from UKZN.


It turned out that he did not have that degree.


Had the employer known this, it would never have contracted with the employee or appointed him to any position. In other words, no relationship with the employee would have been developed and no money would consequently have been paid to him by the employer.

The employer claimed the return of all that it paid the employee. Where restitution is claimed, the party claiming it is ordinarily required to tender that which it had received during the disputed relationship.


The HC found that once the employer proved the fraud committed against it, and that the contract had been terminated, it had become entitled to repayment of the amounts that it paid the employee in the absence of any evidence proving that restitution would be unjust. On the evidence led before the HC, it found there was no grounds to justify the employee not paying the employer back what had been paid to him during his employment.


The employee was ordered to return what he received from the employer arising out of the fraud that he committed against it.


Accordingly, the HC granted the following order:

  • Judgment in favour of the employer against the employee for payment of the amount of R2203565.04;

  • Interest on the judgment amount at the prescribed legal rate of interest from the date of demand to the date of final payment;

  • Declaring that the employer is entitled to execute this judgment against the employee’s provident fund administered by the second defendant;

  • The employee would pay the employer’s costs on the scale as between attorney and client.


This case sets a great precedent for the employer’s right to recover damages arising from fraud. It is important to ensure proper verification processes as well as have your offer of employment letters address the conditions of employment.


Two individuals shaking hands over a desk with documents, symbolizing a successful job interview or business agreement.



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