Eskom’s Molefe says payout was an error
Brian Molefe says he and the company had been under the mistaken ‘belief’ that he was eligible for early retirement when he left at the end of 2016
In a twist to the Eskom saga, recently reinstated Group CE Brian Molefe says he and the company had been under the mistaken "belief" that he was eligible for early retirement when he left at the end of 2016.
Various reasons have been given by the power utility and Public Enterprises Minister Lynne Brown to justify Molefe’s return to Eskom. The reasons have ranged from resignation, retrenchment, early retirement, unpaid leave and now that he actually never resigned.
After his departure, Molefe joined Parliament as a back bencher. The utility is said to have advertised his post and conducted interviews. It is unclear how this could have happened had he not resigned, retired or been retrenched.
Molefe said in his opposing papers to the DA’s application against his reinstatement, that since he and Eskom were now aware that he was not entitled to the pension benefits, he anticipated this meant his original contract of employment had never ended.
He and the Eskom board discovered that he could not claim early retirement as he was only 50 years old at the time, while provision was made in the rules for retirement at the age of 55. "I did not know this prior to having concluded my early retirement agreement with Eskom in November 2016."
He said: "We jointly held a belief that I would be entitled to the pension benefits arising from early retirement. [For the reasons I explain below] this understanding was erroneous.
"The purported retirement from my employment with Eskom was therefore not effective, having been materially influenced by our common error," he said.
Molefe also said the DA’s application was misconceived and sought to interfere in the ordinary contractual relationship between himself, Eskom and the pension fund.
Molefe explained in the court documents that Eskom had requested him to consider returning and after further engagements with the board, he was informed they wanted him to return because of "concerns about stabilising leadership and to address operational issues that it was facing".
He said that after acquainting himself with the rules of the fund, he now accepted that the pension benefits, which could have been afforded to him had Brown not intervened, were not in accordance with the Eskom Pension and Provident Fund rules. This was why he had agreed to repay the benefits he had received.
The DA filed its application last week, following Eskom’s inability to clarify how Molefe returned to the company after what was misconstrued by all involved in December as his resignation.
At the time, Molefe said he was acting in the interest of good governance, however, a Sunday Times exposé revealed the fund had resolved to grant him a R30m pension payout on the grounds of early retirement.
The decision was rescinded by Brown, who said in her answering affidavit that she had initially also been under the impression that Molefe had resigned from the company.
Brown further explains in the submission that she had nothing to do with the turn of events at Eskom. " I was not party to the early retirement agreement between Eskom and Mr Molefe."
She also claimed that Eskom had not consulted her regarding the decisions as the power utility was of the view that she had no power to remove or dismiss the CE. She left it to the court to decide whether a 2016 memorandum of incorporation, signed after Molefe’s appointment in 2014, empowering her with such prerogative was valid.
"As minister I was not party to the early retirement contract and this too would inevitably mean that the agreement was invalid and that the status quo would have to be restored."
Brown and the Eskom board are to appear on Tuesday before the parliamentary committee on public enterprises, where she is expected to be grilled.
Public Enterprises Minister Lynne Brown's affidavit:
Eskom chairman Ben Ngubane's affidavit:
DA federal executive chairman James Selfe's affidavit: