Authored by Jason Whyte and Paris Claassen.
On 21 August 2026, the Labour Court directed an employee (‘Helani’) to pay contractual damages in the amount of R18 184 863,62 to his employer (‘the University’) on account of his fraudulent and corrupt conduct, in breach of his employment contract. Despite the general principle that costs do not automatically follow in labour proceedings, the court also awarded the employer its costs of suit, including the costs of various interlocutory applications, giving an important reminder of the Labour Court’s broad discretion to make substantial costs orders where the circumstances justify such relief.
As part of the provision of student accommodation, the University allowed external service providers that manage privately owned student accommodation to apply for accreditation and receive funding from the National Student Financial Aid Scheme (‘NSFAS’) for the provision of such accommodation. Helani was the University’s project manager responsible for overseeing the accreditation process for external service providers and providing a report to the University’s Tender Committee with recommendations for accreditation. In this role, he acted as both a senior director of the University, with fiduciary duty to act in good faith and with the care, skill, and diligence of someone performing his function, and as an employee who had signed a contract requiring disclosure, in writing, of any actual or possible conflicts of interest with the University.
Two of the properties proposed to the University’s Tender Committee, which were subsequently approved by the Tender Committee on, inter alia, the strength of Helani’s recommendation, were later found to have less than half the required and advertised bed capacity and that many students were being paid monthly to pretend that they were residing in the accommodation when in fact there was no space for them. It found that Helani had been receiving regular payments from the impugned service providers, that he had a prior personal connection with one of the private service providers, and that he had knowingly made false representations to the Tender Committee to carry out this scheme.
The University had paid the external service providers R17 106 614.10 on behalf of NSFAS to provide the accommodation services and had paid a further fee at 6% to its payment platform, amounting to an additional R1 091 091,82, both of which amounts were considered as damages arising from the employee’s breach of contract. In the result, the Labour Court, exercising the jurisdiction afforded by s77(3) of the Basic Conditions of Employment Act of 1997 to hear any civil disputes arising from contracts of employment, held the employee contractually liable for the full R18 184 863,62 and costs.
The decision demonstrates the Labour Court’s willingness to hold employees accountable for the financial losses caused by breaches of their employment contracts and, where justified, to make substantial costs orders against them, especially in instances of corruption, collusion, and fraud.
University of Johannesburg v Helani (J429/24) [2026] ZALCJHB 255 (21 August 2026)