Labour Court Orders Former NHLS CEO to Pay R22M for Misconduct; Dismissals Upheld

The NHLS revealed that irregularities came to light in 2017, leading to the suspension and eventual dismissal of Mogale and Zulu in 2019 after a disciplinary hearing.

The National Health Laboratory Service (NHLS) has welcomed the Labour Court's judgment against its former CEO, Joyce Mogale, and the estate of the late Chief Financial Officer, Sikhumbuzo Zulu, who passed away before the proceedings began. The court has dismissed their unfair dismissal claims and ordered Mogale to pay R22 million to the NHLS for losses incurred due to their conduct.

In a ruling delivered on September 13, 2024, Judge Connie Prinsloo found Mogale and Zulu's dismissals to be fair. The judge described their conduct as marked by "severe negligence and incompetence," noting their failure to follow explicit Board resolutions and disregard for delegated authority. Judge Prinsloo criticized Mogale's conduct as "astonishing" and highlighted her tendency to shift blame.

The NHLS revealed that irregularities came to light in 2017, leading to the suspension and eventual dismissal of Mogale and Zulu in 2019 after a disciplinary hearing. The dismissals were based on three major contract irregularities:

Afrirent Vehicle Leasing Irregularity: Mogale approved a R72 million contract without Board approval, later increasing it to R79 million and adding an unwarranted penalty clause, resulting in the R22 million restitution order.Blue Future IT Equipment Irregularity: The NHLS Board authorized a R25 million procurement, but Mogale procured R83 million worth of IT equipment without competitive tendering, much of which was unrelated to the original tender.DV8 Wide Area Network Irregularity: Mogale signed a R63.5 million addendum to a contract without a tendering process and without specifying the goods, leaving room for potential malfeasance.Judge Prinsloo found Mogale’s actions in violation of the Public Finance Management Act, the NHLS Supply Chain Management Policy, and her employment contract.

NHLS Chairperson Prof. Eric Buch noted that at the time of Mogale and Zulu's suspension, the NHLS owed its suppliers over R800 million, exceeding its cash reserves. Since then, the NHLS has stabilized, built significant reserves, provided reasonable annual staff increases, and kept tariff increases below 5%.

Buch emphasized that the judgment underscores the Board’s commitment to accountability and diligent governance.

In parallel, Mogale, former Head of Supply Chain Management Graham Motsepe, Contracts and Tender Compliance Manager Mthunzi Mthimkulu, Legal Manager Sibusiso Mthenjane, and Blue Future owner Kapai Pierre Petersen are on trial in the specialized commercial crimes court in Palm Ridge. Petersen has been convicted of fraud related to his NHLS tender submission and is awaiting sentencing. Buch remains hopeful for further charges related to the Afrirent and DV8 contracts.