The Labour Court’s judgment in Victoria and Alfred Waterfront (Pty) Ltd and Another v Thotsejane (case no C821/2017 [2026] ZALCCT 160 (18 September 2026) is an important decision dealing with fraud in the employment relationship.
At a glance
- The employer appointed the employee as its Chief Information Officer in the Finance and Central Services Department with effect from 12 October 2015.
- She was further held liable for the cost of two consultants whose engagement she had procured while concealing her own business ties to them.
- In a detailed judgment, the court held that an employee who fraudulently induced an employer to appoint her, through material misrepresentations about her employment history, was liable to repay the remuneration she had received.
In a detailed judgment, the court held that an employee who fraudulently induced an employer to appoint her, through material misrepresentations about her employment history, was liable to repay the remuneration she had received. She was further held liable for the cost of two consultants whose engagement she had procured while concealing her own business ties to them.
Four questions arose. First, whether an employer fraudulently induced to conclude a contract of employment may recover what it paid under that contract. Second, whether an employee is liable for loss caused by the concealed promotion of her business associates in a procurement process. Third, whether such claims fall within the Labour Court’s jurisdiction. Fourth, whether the employee’s conduct warranted punitive costs. The Court decided each question in the employer’s favour and awarded damages totalling R2,897,242.46, together with interest and costs on a punitive scale.
Facts
The employer appointed the employee as its Chief Information Officer in the Finance and Central Services Department with effect from 12 October 2015. She had signed the employer’s application form on 8 May 2015, expressly acknowledging that false information would render any resulting contract null and void, and she affirmed and elaborated on the statements in her curriculum vitae during interviews.
Those statements were false. She attributed her departure from Engen to political challenges and a merger, when she had in fact been dismissed in January 2014 for gross misconduct and a conflict of interest involving her private company, FlavaLite Innovations. She claimed to have been headhunted from Old Mutual, when she had been dismissed in January 2012 for insubordination and the unlawful possession of property. She said that she had left Acceleration eMarketing for career development, when she had been dismissed for incapacity in March 2007. She also concealed that she remained employed by the Cape Peninsula University of Technology (CPUT), from which she never resigned and from which she continued to draw a full salary until February 2017.
After the employer offered R700,000 per annum, she submitted a counter-offer supported by a letter claiming that CPUT had offered her a head of department position with a generous package of allowances. CPUT confirmed that the offer was a complete fabrication. The misrepresentation induced the employer to increase its offer.
A forensic audit of her work laptop revealed sustained involvement in private ventures during working hours, much of it coinciding with sick leave, annual leave or unexplained absence. Senior management testified that she never delivered a single completed piece of work and that her submissions were incomplete and of no practical application to the employer’s operations. She was also found to have promoted the engagement of two consultants, both of whom were her undisclosed business associates. She was suspended on 24 November 2016 and dismissed on 12 December 2016 on charges of misconduct and fraud, following which the employer instituted a damages claim in the Labour Court.
Legal framework and the Court’s analysis
The first claim rested on ordinary principles of fraud and restitution. Where a contract is induced by fraudulent misrepresentation, the innocent party may cancel it and be restored to the position it would have occupied had the contract never been concluded. The court found the recruitment misrepresentations to be material and false, made deliberately to induce the appointment, and causally connected to it. But for them, the employer would never have employed her, nor agreed to the enhanced salary. Because the employer obtained no value from her services, it was entitled to damages equivalent to the remuneration paid to her.
The Court observed that the concurrent CPUT employment would, on its own, have entitled the employer to cancel the contract. There was a breach which prohibited private employment without written consent, and the implied duty of good faith requiring an employee not to work against the employer’s interests.
The second claim was delictual. The contract bound the employee to the employer’s policies, and the procurement policy required honesty, integrity and professionalism, and that transactions be conducted at arm’s length and free of conflict between employee and supplier. By actively soliciting the appointment of associates who regularly worked with her own business, while concealing that connection, she disabled the independent and objective process her duties required. The Court held that, but for her conduct, the two consultants would not have been engaged, and that the fees paid for them were accordingly the employer’s loss.
Jurisdiction
The employee contended throughout that the claim was a civil damages claim belonging in the High Court. That objection had been raised in limine and dismissed by the court in March 2023. Because that ruling was never appealed, it remained binding, and the trial proceeded.
Applying the Labour Appeal Court’s decision in Rand Water v Stoop and Another (2013) 34 ILJ 576 (LAC), the Court confirmed that although fraud is a delict, fraud committed by employees who abuse their positions is sufficiently connected to the contract of employment to fall within the Labour Court’s jurisdiction. This was not fraud committed by a stranger to the employer. It arose from the employee’s recruitment and from her later abuse of her position as Chief Information Officer.
Findings and order
The Court ordered the employee to pay damages of R1,031,237.46 in respect of the fraudulent misrepresentations that caused the employer to employ her, and a further R1,402,005.00 and R464,000.00 in respect of the losses arising from the engagement of the two consultants, in each case with interest at the prescribed rate a tempore morae.
In addition, the Court ordered the employee to pay the employer’s costs, including the costs of counsel, on the attorney and own client scale. Although the contract provided for punitive costs, the Court stressed that giving effect to such a clause remains a matter for judicial discretion. A punitive order was in any event warranted by the magnitude of the deceit, by the principle that a defrauded party should not be left out of pocket in obtaining redress, and by the employee’s conduct during the litigation, which included denying her identity in open court, failing to appear when the trial resumed after a postponement granted for her benefit, and filing neither heads of argument nor any explanation.
Key takeaways
Honesty in recruitment is a legal obligation. An employee who secures an appointment through material misrepresentation risks consequences beyond dismissal, including liability to repay remuneration received where the employer derived no value from the engagement. Undisclosed conflicts of interest in procurement carry the same exposure, measured by the cost the employer was induced to incur.
For employers, the judgment rewards rigour. Verification of stated reasons for leaving previous employers, confirmation that a candidate has in fact resigned elsewhere, independent testing of competing offers before salary is increased, and enforceable declarations of interest in procurement were each decisive here. The decision also confirms that the Labour Court may entertain fraud claims connected to employment and may treat serious dishonesty, in the workplace and in the conduct of the litigation itself, with punitive costs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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