Legal expert explains Molefe's moves

Cape Town - In the light of Friday's surprising news that Brian Molefe is heading back to Eskom as chief executive on Monday, Fin24 asked labour law expert Michael Bagraim to sketch the legal context.

Bagraim pointed out that Molefe never said he was going on early retirement from his Eskom position as CEO.

"Molefe said he is 'departing' - that is legalese for saying 'I have agreed to leave in exchange for a package'," Bagraim told Fin24 on Friday.

Bagraim is convinced that Molefe could not have gone on early retirement as has been assumed.

"Early retirement has to be done in terms of the pension fund rules and if he received R30m as part of early retirement after only having been in the position of CEO for a short period of time," explained Bagraim, "that would create a precedent for everyone to get that at early retirement."

"Can you imagine a pension fund saying 'you will get R30m if you retire early'?"

He said an agreement is a two-way street and so now Molefe "has to be placed back where he was".

Bagraim also explained that if someone goes on early retirement, they are allowed to take up another job as one cannot be precluded from working.

"The legal problem is, however, that about three months ago Molefe started drawing a handsome parliamentary salary plus now he is saying he has to be reinstated as Eskom CEO. That means Eskom would have to give him back pay," said Bagraim.

"So, effectively Molefe will get double pay for the last three months, plus he also drew perks in Parliament - it is a package of about R1.2m per year and other perks include things like flights, parking, magazines, a phone and a computer."

Bagraim also explained that if Eskom does not reinstate Molefe, he would be able to sue the state-owned enterprise for the money it agreed to pay him for departing. This would be on the grounds of Eskom having broken the agreement with him.

"He should be successful in that case. The only argument Eskom could have would be to say the person who signed the agreement with him did not have the authority (to do so). From what I understand, however, he made the deal with the Eskom board," said Bagraim.

"Eskom, on the other hand, could tell him 'we are not having you back and you can sue us on the agreement'."

Molefe agreed to return to Eskom as its chief executive on Monday, after the board rescinded his application for early retirement, Eskom board spokesperson Khulani Qoma confirmed on Friday.

Molefe quit in November 2016 following former public protector Thuli Madonsela’s State of Capture report, and has been a Member of Parliament for the past three months.

Qoma said the board met after Public Enterprises Minister Lynne Brown objected to Eskom’s R30m pension payout to Molefe, which she only discovered through a story in the Sunday Times on April 16.

Eskom chairperson Ben Ngubane told Business Report “that in accordance with the minister’s instructions, the parties attempted to find a mutually acceptable pension proposal, but were unable to reach such an arrangement.”