Whose legal duty is to suspend SOE bosses?
Afew years ago, the Ministry of Public Enterprises issued a directive under the hand of the minister responsible for public enterprises - to all public enterprises. The directive is available on the Ministry of Public Enterprises’ website.
The directive was to contain suspensions of chief executive officers and senior managers that had hitherto become rampant and nearly embarrassing. In other words, what it seeks to achieve is to regulate the procedure for carrying out suspensions of the relevant functionaries in public enterprises. As it stands, senior managers and chief executive officers should not be suspended without those suspending first adhering to the prescription in the directive. In essential parts, the directive provides that.
“Before any suspension can be undertaken by a board of a public enterprise the board must consult the minister responsible for public enterprises and the portfolio minister.
If there are valid grounds for suspension of a CEO/MD or senior manager of a PE (including individuals in an acting capacity) the minister responsible for public enterprises and the portfolio minister must in writing notify the board of the Public Enterprise of the outcome.”
In some introductory parts of the directive, which have not been repeated above, it gives context to the purpose for its birth. It did appear to the Ministry of Public Enterprises that there had been indiscriminate suspensions of CEOs / MDs and senior managers which were not grounded in any legitimacy. It can safely be stated that the mischief the directive was aimed at achieving was to end unjustified suspensions – by boards against CEOs or CEOs against senior managers. With respect, the directive can be abused by ministers who may be bent on shielding suspected wrongdoers from suspension and discipline.
Sadly, the directive omitted to clarify the position around indiscriminate dismissals of chief executive officers and senior managers. It is unclear whether in the case of dismissal the authority vested with the power to dismiss should seek the concurrence of its intended act or instantly proceed to dismiss. It should be noted that dismissals do not necessarily follow a suspension. Some dismissals may be both poor on substance and procedure – transmitting them into the class of unfair dismissals.
Notwithstanding, this article interrogates the powers of the minister responsible for public enterprises, and to an extent any relevant minister in controlling suspensions as per the directive. The question is exactly who has the powers to discipline an employee? The answer should follow that only the employer can do so. With the above being fact, should the minister responsible for public enterprises play any role in the disciplining of an employee for whom the minister is not the employer? The minister, as can be gathered from the directive relies on section 4(1)(e) of the PEGA. The article argues that directives referred to in subsection 1(e) relate to those the minister can issue in the province of governance and performance agreements - not the suspension of executives. It falls for determination where the minister derives the purported powers and how the powers should be exercised. It invokes the application of Article 18 of the Constitution. Does the directive meet the test for administrative justice? Further to Article 18, there is plenty of authority to indicate how public power should be exercised and the exact contours such exercise may take. It is doubtful whether the minister responsible for public enterprises has the authority to control, approve of, block or influence suspensions of CEOs and senior managers – through a directive. The subsection does not appear to support the minister’s engagement in labour disputes of public enterprises. If the minister engages in labour disputes of the nature the directive seeks to target, it may compromise well established labour dispute resolution mechanisms.
As it may attract the attention of any discerning scholar, the directive has been breached in cases such as that of Meatco, which is proof of its ineffectiveness. It is argued, a directive is not equivalent to law, and as evident above there were no consequences to the board of directors at Meatco. The PEGA provides no powers for sanctions to follow from breach of any directives issued. This is a point for the Ministry of Public Enterprises to consider – especially in regard to pure governance matters for which it should rightly institutionalise across public enterprises.
Yes, there are sanctions in terms of direct breach of certain provisions of the PEGA but not breaches upon directives issued out of the powers vested in the minister responsible for public enterprises.
Strictly looked at, suspension of an employee at any level is a labour matter. It is better to consign and relegate labour matters to the labour law architecture. In fact, in terms of labour law, a party not being the employer in an employment contract cannot be seen or heard to mete out discipline to an employee they do not employ – there is no relationship. The minister responsible for public enterprises and portfolio ministers are in terms of the directive placed as adjudicators of the merits for any pending suspension – this sounds like an anomaly of sorts.