Webber Wentzel partner Dhevarsha Ramjettan says the ruling against former PRASA executive Daniel Mthimkhulu set an important precedent.
Over the years, there have been various media reports on high-profile employees (particularly politicians) who misrepresent their qualifications to their employer. In fact, for the 2017/18 financial year, the South African Qualifications Authority (SAQA) uncovered 982 fraudulent qualifications including instances where qualifications were embellished or overstated and where employees have been dishonest in their job applications about their qualifications.
The recent case - in which the High Court ordered a former executive employee to pay his old employer an amount of approximately 5.7 million ZAR in damages for misrepresenting his qualifications - shows that those days are numbered.
On 1 April 2010, the Passenger Rail Agency South Africa (PRASA) appointed Mr Daniel Mthimkhulu (Mthimkhulu) to the position of Executive Manager: Engineering. PRASA alleged that Mthimkhulu misrepresented to PRASA that he held a National Diploma and Bachelor's Degree in engineering from the Vaal University of Technology (VUT).
A few months into his employment with PRASA, Mthimkhulu misrepresented to PRASA that he had been awarded a doctorate by the Technische Universitat Munchen (a university in Germany). He also claimed that he had received a job offer for a position as an engineering services specialist at an annual salary of ZAR 2 800 000. In order to retain Mthimkhulu, PRASA increased Mthimkhulu's salary to match that of the alleged offer.
In July 2015, various media reports circulated around Mthimkhulu's qualifications and whether he actually possessed those qualifications. In light of such reports, PRASA conducted an internal investigation into Mthimkhulu's qualifications (and registration with the Engineering Council of South Africa). PRASA discovered that Mthimkhulu had misrepresented his qualifications.
He did not hold any qualifications from VUT and/or the Technische Universitat Munchen. After following a disciplinary process, PRASA dismissed Mthimkhulu.
Delictual claim by PRASA
PRASA instituted a delictual claim for damages based on fraudulent misrepresentation against Mthimkhulu in the High Court. PRASA's claimed that it had suffered extensive patrimonial loss as a result of - Mthimkhulu falsely and expressly misrepresenting, in writing in his curriculum vitae, to PRASA prior to 31 March 2010 that he had a National Diploma and a Bachelor's degree from the VUT. Due to this misrepresentation, PRASA appointed Mthimkhulu to the position of Executive Manager: Engineering Services; and Mthimkhulu misrepresenting to PRASA prior to 14 September 2010 that he had been awarded a doctorate by the Technische Universitat Munchen and that he had received a job offer for a position as an engineering services specialist at an annual salary of ZAR 2 800 000. As a result PRASA then made a counter-offer which Mthimkhulu accepted resulting in him earning an annual salary of ZAR 2 800 000.
Mthimkhulu's response was a denial of the allegations and his defence was that the allegations were an attempt by PRASA to destroy his career.
After considering all of the evidence presented by both parties, the High Court was satisfied that all the elements of PRASA's delictual claim had been established. The High Court found that PRASA had proven, on a balance of probabilities, that Mthimkhulu presented fraudulent qualifications to PRASA. It was on this basis that PRASA appointed Mthimkhulu to the senior position which he occupied.
Damages awarded to employer
As a result, the High Court awarded damages to PRASA in an amount of approximately ZAR 5 771 854 which constituted the remuneration he received from PRASA as a result of his fraudulent misrepresentations.
The quantum of damages was determined by calculating the difference between Mthimkhulu's salary as at September 2010 and his monthly salary at the normal annual increases for his level.
This judgment follows the introduction of newly tabled legislation (under the National Qualifications Authority Amendment Act 12 of 2019) which provides that any person found to be misrepresenting their qualifications (or being dishonest about their educational background) could be liable for a fine or imprisonment for up to five years.
The judgment sets an important precedent in dealing with employees who misrepresent their qualifications to their employer and the remedies available to such an employer.
This article was co-authored by Webber Wentzel associate Kgololego Pooe and professional support lawyer Shane Johnson