After much confusion over former Eskom CEO Brian Molefe’s resignation at the end of last year, followed by his short return to the power utility before being sacked, his heads of argument in a Labour Court case he’s instituted against Eskom, Minister of Public Enterprises Lynne Brown, and others, gives insight into what really happened.
Molefe is challenging his dismissal in the Labour Court as unlawful. His heads of argument read: “The undisputed facts before this Court demonstrate that Mr Molefe’s dismissal was not effected for reasons of conduct, capacity or operational requirements.34 Until the issue of the Minister’s directive, Eskom did not consider it appropriate to remove Mr Molefe from his position as Group Chief Executive.35
Before the High Court, Dr Ngubane on behalf of Eskom expressed the view that Mr Molefe had played a significant role in stabilising Eskom and that his performance could not be faltered.36 That Eskom plainly had no reason to dismiss Mr Molefe stems from the fact that it had no difficulty in expressing the view publically that Mr Molefe and his executive management team had turned around the company’s operational and financial performance with the result that the country had gone for fifteen months without load shedding”.
The Chronological Events Leading to Molefe’s sacking in earlier this month.
- At the time of Mr Molefe’s early retirement Eskom publiclly thanked him for his relentless dedication to turning the company around and putting in place a sound growth trajectory.37
- After holding the position of Acting Chief Executive from 17 April to 30 September 2015, Mr Molefe concluded a five-year fixed term contract with Eskom on 7 March 2017.2
- Mr Molefe would become a member of Eskom’s Pension and Provident Fund with Eskom contributing to the fund on his behalf.3
- On 9 February 2016, the Eskom People and Governance Committee passed a resolution confirming the Eskom Pension and Provident Fund (“EPPF”) rule that employees may take retirement from age 50 with ten years of service, and that where Executive Directors appointed on a fixed term contract retire, with the result that there was a shortfall regarding the ten-year service rule, Eskom would:
- bridge the gap to make up for the ten years;
- waive penalties applicable to early retirement;
- refund the EPPF the actual costs for additional service added, plus penalties applicable to early retirement.4
- Mr Molefe met with the Minister on 11 November 2016 to explain his decision to step down as Group Chief Executive.5 Neither the DA nor the EFF were in a position to deal with this event.
- On the same day Mr Molefe wrote to the chair of Eskom’s Board requesting early retirement in terms of the EPPF rules read with the 9 February 2016 resolution.6
- Mr Molefe turned 50 on 28 December 2016.7
- On 24 November 2016 the Chair of the Eskom Board, Dr Ngubane, wrote to Mr Molefe approving his application for early retirement.8
- On the basis of the request and approval, Mr Molefe’s last day of service was 31 December 2016.9
- On 18 February 2017 Mr Molefe received a letter from the EPPF welcoming him to the fund and setting out his pension benefits.10
- The Minister issued a statement on 23 April 2017 querying the legal rationale for the pension benefits.11
- EPPF rule 24 only permits early retirement at the age of 55, and not 50.12
- At a meeting between the Minister and the Eskom Board on 19 April 2017, the early retirement agreement concluded with Mr Molefe was discussed. The Minister instructed the Board to consult with Mr Molefe and to revert with an appropriate pension proposal.13
- At a subsequent meeting on 9 May 2017 the Eskom Board presented the Minister with four proposals.14
- The Board indicated its preference for the first option, being consensual rescission of the early retirement agreement.15 The Minister did not oppose this.
- Eskom passed a resolution to rescind its decision to approve his request for early retirement.16
- On 3 May 2017 Eskom wrote to Mr Molefe advising of the rescission of its decision to grant him early retirement, and calling upon him to resume his duties as Group Chief Executive.17 A written Reinstatement Agreement was signed by Mr Molefe and Eskom on 11 May 2017.18
- The Minister issued a media statement on 12 May 2017 confirming Mr Molefe’s reinstatement as Group Chief Executive, indicating the Minister’s satisfaction with the re-evaluation process and recognising the merits of the proposal, on the proviso of its legality.19
- The Minister wrote to the Eskom Board on 31 May 2017 directing the Board to rescind its decision to reinstate Mr Mole as Group Chief Executive.20
- On 2 June 2017 Mr Molefe was called to a meeting of the Eskom Board at which he was informed by Dr Ngubane that, as directed by the Minister, the Board rescinded the Reinstatement Agreement. Mr Molefe was informed that he was no longer the Group Chief Executive of Eskom.21
Brian Molefe’s heads of argument against Eskom, Minister Lynne Brown, Democratic Alliance and Economic Freedom Fighters