The High Court in Johannesburg has ordered Aon South Africa to reconsider a debarment decision it made almost eight years ago, saying it was procedurally unfair.
A key aspect of the case was when the applicant became aware that the decision to debar her constituted administrative action that could be taken on review.
The judgment, handed down on Monday, sets out the background to the application.
Keneilwe Zondi, the applicant, is serving pupillage, but the Legal Practice Council (LPC) has apparently declined to certify that she is fit and proper to do so. This is because Aon, the second respondent, debarred her in June 2016.
Aon employed Zondi as a short-term insurance salesperson in April 2015. The following year, in May, Aon charged her with claiming commission on fictitious sales of insurance products to customers, some of whom turned out not to exist. Zondi was also accused of claiming commission on sales that was due to other salespeople.
After a disciplinary hearing, Aon dismissed Zondi on 23 June 2016. Three days later, Aon debarred her.
Zondi took Aon to the Commission for Conciliation, Mediation and Arbitration (CCMA).
In terms of the CCMA settlement, the parties agreed that Aon would pay Zondi just under R58 000 in full and final settlement. Aon undertook to apply to the then Financial Services Board (FSB) for the upliftment of Zondi’s debarment. Aon also promised to tell the FSB that “there was insufficient evidence of wrongdoing on the part of [Zondi] at the CCMA”.
According to the judgment, Aon sought to get out of the agreement soon after signing it. Those efforts were unsuccessful. In February 2017, the agreement was made an arbitration award under section 142A of the Labour Relations Act.
Between 15 March 2017 and 17 May 2023, Zondi issued a series of demands for Aon to make good on its promise to apply to the FSB to uplift the debarment. Zondi also contacted the FSB and asked it to honour the CCMA award.
On 1 April 2018, the second respondent, the Registrar of Financial Services Providers, took over some of the FSB’s functions.
The FSB and the Registrar told Zondi that they could not uplift the debarment, and the only way she could reverse it was by means of a review application under the Promotion of Administrative Justice Act (PAJA).
Communication failure
The court first considered whether it was necessary to grant Zondi’s application for an order extending the time available to bring her application.
It was accepted that Zondi became aware of the decision to debar her shortly after 29 June 2016.
Section 7(1)(b) of PAJA requires Zondi to have instituted proceedings within 180 days of “becoming aware” of the administrative action she sought to challenge. Therefore, by 26 December 2016. Section 9 of PAJA permits the court to extend the 180-day period if the interests of justice so require.
She instituted her High Court application to review and set aside the debarment on 17 July 2023.
Judge Stuart Wilson said the evidence before the court showed it was only on 17 May 2023 that Aon communicated to Zondi that the decision to debar her constituted administrative action, and her only remedy was to review it.
Until then, Zondi treated the decision to debar her as part of the sanction imposed by Aon’s disciplinary inquiry. She believed, erroneously, that the debarment could be undone through the implementation of the remedy she obtained at the CCMA.
“That suggests that Ms Zondi only ‘became aware’ that the debarment decision was administrative action on 17 May 2023, when Aon told her it was, and explained that, because of this, it was not open to Aon to implement the terms of the CCMA award.”
Therefore, Judge Wilson said, Zondi did not require an extension under section 9 because she only became aware on 17 May 2023 that the decision she wished to challenge constituted administrative action.
Even if it were assumed that the 180 days commenced when Zondi became aware of the debarment decision, he said “the interests of justice cry out” for him to exercise his power to extend the period available to Zondi to launch proceedings.
Zondi genuinely believed that reversing her debarment was a simple matter of Aon implementing its undertaking, made in the CCMA award, to apply to the Registrar to uplift the debarment.
Counsel for Aon criticised Zondi’s belief as unreasonable considering the Registrar’s repeated warnings that she should bring review proceedings.
“However, I do not think I can endorse that criticism in circumstances where Ms Zondi had the CCMA award in hand, and Aon was, for several years, silent on whether it could or would implement its obligations under the award.”
The judge also took into consideration that Zondi was raising a newborn child throughout the 180-day period, and she was not consistently employed and lacked the means to institute proceedings in the High Court.
He also considered that the prospects for Zondi’s success on review were very good.
Basic right to procedural fairness
Addressing the merits of the review, Judge Wilson noted that section 14(3) of the FAIS Act, which sets out the procedural requirements for debarment, did not apply when Zondi was debarred. It was inserted into section 14 on 1 April 2018.
Nevertheless, Zondi had the basic right to procedural fairness before the decision to debar her was taken. “That right flows from the fact that – as everyone before me accepts – the decision to debar her constituted administrative action, and that, to be lawful, administrative action must also be procedurally fair,” he said.
The components of procedural fairness would have been, at the very least, adequate notice of the intention to debar, an opportunity to make representations in light of that intent, and final notice of Aon’s decision to debar and Aon’s reasons for reaching it, having properly considered any representations by Zondi, Judge Wilson said.
But that was not what happened. On 27 June 2016, Aon gave Zondi notice that she “may” be debarred. She was not invited to make representations, nor was she told why, other than because she had been dismissed, debarment may be imposed.
Aon had a duty to identify the facts on which it intended to debar Zondi. “The mere fact of her dismissal was not enough, although the facts established at the disciplinary hearing may well have been enough if Aon had identified them. Those facts ought nonetheless to have been set out in a notice of intention to debar, and representations ought to have been invited on them.”
Furthermore, Zondi was not given final notice of her debarment at the time it was communicated to the FSB on 29 June 2016. Having informed Zondi of the possibility that she “may” be debarred, Aon proceeded, two days later, to give notice of her debarment, effective 27 June 2016, to the FSB, but not to Zondi. Aon told the FSB that it had informed Zondi of her debarment, but it had not.
For these reasons, Judge Wilson found that Aon’s decision to debar Zondi was unlawful because it was procedurally unfair. It must be reviewed and set aside.
The Registrar was ordered to expunge its record of Zondi’s debarment.
Why reconsideration is the appropriate remedy
Aon asked that if the court set aside the debarment, the decision to debar Zondi should be remitted to it. Zondi, on the other hand, asked for an order for Aon to compensate her for the unlawful decision to debar her in the first place.
Judge Wilson said there were two reasons the proper remedy was to refer the decision back to Aon for reconsideration.
First, based on the papers, he could not accept there was insufficient evidence to convict Zondi at her disciplinary hearing.
“The mere fact that Aon undertook to tell the FSB that there was insufficient evidence of wrongdoing to justify the debarment does not amount to an admission that Ms Zondi had not committed misconduct, or that her dismissal was unfair or unlawful […] Ms Zondi has questions to answer about her honesty and integrity that she has failed to answer before me.”
Second, even if he accepted there was insufficient evidence to convict Zondi at the disciplinary hearing, that did not mean Aon did not have the right to debar her.
The requirements for a conviction at a disciplinary hearing are not the same as the requirements for debarment under the FAIS Act. To effect a debarment, Aon need only be satisfied that the representative no longer meets the “fit and proper” requirements. This is not necessarily the same as the kind of misconduct that would justify dismissal.
Zondi ‘must come clean’ to the LPC
Judge Wilson said that irrespective of the outcome of the debarment proceedings, it was incumbent on Zondi to provide a full and frank explanation to the LPC of the circumstances that led to her dismissal.
“If she was dishonest, or reckless with the truth, while employed at Aon, she would be well advised to own up to it now and to show that she has learned from her mistakes in the eight years since they were made. It would be an error of judgment to continue to seek refuge in Aon’s ineptitude. I hope both for Ms Zondi’s sake and for the sake of the profession to which I suspect she would make a fine addition, that Ms Zondi will choose the correct path,” he said.
Costs order
The court ordered Aon to pay the costs of Zondi’s application.
Although Zondi represented herself in court, she enlisted the support of a firm of attorneys, which apparently assisted her on the basis that it would recover its costs if she was successful.
“Even if Ms Zondi’s attorneys had acted pro bono, section 92 of the Legal Practice Act would have permitted her Zondi’s attorneys to present a bill for taxation as if Ms Zondi had paid for their services. There is accordingly no basis on which to limit Ms Zondi’s costs to her actual disbursements reasonably incurred, which is the usual approach when making costs awards in favour of lay litigants,” Judge Wilson said.
What a load of froth.
She is guilty.
Period.
Should we dispense with courts and due process of law? Replace that with some sort of mob rule
Agree with procedural requirements BUT to be noted is that she” must come clean” , “dishonest and reckless with the truth”et al…. hardly insufficient to go unnoticed?