Case-Law & Legislation Review: Landmark Court Ruling Favours Whistleblower

From www.iol.co.za December 2005

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# Andisa Securities vs. Pedzinski

In a landmark ruling, the Labour Court in Johannesburg has ordered Standard Bank to pay two years' salary to a whistleblower they wrongfully dismissed. They also have to pay costs. The compensation, which amounts to about R330 000, is the maximum compensation possible in such a case.

Allison Pedzinski had disclosed irregular share transactions by one of her executive directors but, instead of the bank taking action against him, they got rid of her. Andisa Securities, a Standard Bank division, was found to have contravened the Protected Disclosures Act, commonly know as the Whistleblower's Act.

The transactions had not been reported to the JSE  "This is the first time a court has been called on to decide whether an employer had contravened the whistleblower law. It is a landmark decision in favour of transparency and good corporate governance. This is a victory for David over Goliath," Pedzinski's attorney, Tzvi Brivik, said.

Pedzinski was employed as a compliance officer at Andisa and picked up irregular share transactions in breach of fiscal regulations. These irregularities involved one of Andisa's executive directors, Grant Talbot. The transactions had not been reported to the Johannesburg Stock Exchange and the irregular shares issued to Talbot were not reversed.

Pedzinski reported this to the group compliance officer within Standard Bank as well as Andisa.

Although disciplinary steps were taken against other employees for similar irregular share transactions, Talbot had not been disciplined. At the time, Pedzinski had been working half-day due to a back problem. She was told that, unless she worked for a full day, she would be dismissed. This was conveyed to her after she had reported the irregularities.

Thereafter, her employers claimed that her position had become redundant and her services were terminated.

She took her employers to the Johannesburg Labour Court, and charged that they had discriminated against her on the basis that they didn't take into account her physical condition. She also alleged that they had contravened the Protected Disclosures Act.

The court found in her favour, finding that the only possible explanation for her dismissal was her disclosure of the information, not that her position had become redundant. The judge found that the decision to make her redundant was not genuine and Andisa was found to have contravened the Protected Disclosures Act. The judge ordered her employers to compensate her for two years' worth of her salary for her wrongful dismissal.