Legal updates and opinions
News / News
A reminder to employers: Duties in relation to recovering funds misappropriated by employees
by Jacques Van Wyk, Director, Nasheetah Smith, Senior Associate, and Danelle Plaatjies, Candidate Attorney
When employees are found guilty of misappropriating funds in the workplace, employers are tasked with questions concerning the recovery of the lost funds. However, an issue which is often overlooked, is the employer’s responsibilities in terms of Prevention and Combating of Corrupt Activities Act 12 of 2004 (PRECCA).
Reports in terms of PRECCA
Section 34(1) of PRECCA places a duty on persons of authority to report certain offences where the quantum of the corruption, theft, fraud, extortion, forgery or uttering a forged document is more than R 100,000. The section provides that any person in a position of authority who has knowledge or suspicion of such an offence has a duty to report the matter to the South African Police Services.
The South African Police Service Amendment Act 10 of 2012 (SAPS Act), provides that such a report should be made to a police official in the Directorate for Priority Crime Investigation (DPCI). Thereafter, the National Prosecuting Authority (NPA) will consider the findings of the DPCI and exercise its discretion as to whether charges should be laid.
Persons in a position of Authority
Section 34(2) of PRECCA provides that any person in a position of authority who fails to report such corrupt activities is guilty of an offence.
The following persons hold positions of authority in terms of PRECCA:
- The Director-General or head, or equivalent officer, of a national or provincial department;
- In the case of a municipality, the municipal manager appointed in terms of section 82 of the Local Government: Municipal Structures Act 117 of 1998;
- Any public officer in the Senior Management Service of a public body;
- Any head, rector, or principal of a tertiary institution;
- The manager, secretary or a director of a company as defined in the Companies Act 61 of 1973 and includes a member of a close corporation as defined in the Close Corporations Act 69 of 1984;
- The executive manager of any bank or other financial institution;
- Any partner in a partnership;
- Any person who has been appointed as chief executive officer or an equivalent officer of any agency, authority, board, commission, committee, corporation, council, department, entity, financial institution, foundation, fund, institute, service, or any other institution or organisation, whether established by legislation, contract, or any other legal means;
- Any other person who is responsible for the overall management and control of the business of an employer; or
- Any person contemplated in paragraphs listed above who has been appointed in an acting or temporary capacity.
Employers seeking to recover funds misappropriated through the unlawful conduct of their employees, are reminded to reflect on whether they are required to report such conduct to the appropriate authorities.
Latest News
Collection costs under the National Credit Act, 2005
by Tracy-Lee Janse van Rensburg, Director and Juliet Siwela, Candidate Attorney Collection costs In accordance with the judgment handed down [...]
BOOKING.COM and public perception
by Donvay Wegierski, Director The United States Supreme Court of Appeal has held that the US trade mark applications pending [...]
Constitutional Court clarifies when a contract and its enforcement will be invalid for being contrary to public policy
by Pieter Steyn, Director In a recent judgement involving Beadica 231 CC and others and the Oregon Trust, Sale’s Hire [...]
Conduct standard for banks
by Tracy-Lee Janse van Rensburg, Director Pursuant to the Financial Sector Regulation Act, 2018 ("FSRA"), the Financial Sector Conduct Authority ("FSCA") [...]
URGENT update: Amendments to regulations for lockdown level 3
by Jacques van Wyk, Director; Andre van Heerden, Senior Associate; and Thabisa Yantolo, Candidate Attorney On 31 July 2020 the [...]
Updated Directive in respect of access to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) during the COVID-19 pandemic
by Jacques van Wyk, Director; Andre van Heerden, Senior Associate; and Thabisa Yantolo, Candidate Attorney On 30 July 2020 the [...]
