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
Why failing to revise land policy will fail aspiration of millions
The need for land expropriation must be characterised and understood as being foremost about social justice and a constitutional imperative. [...]
Bye bye FSB, hello FSCA
As of 1 April 2018, there is a new sheriff for the South African financial services sector. The Financial Services [...]
Further tightening of Broad Based Black Economic Empowerment rules proposed by Minister of Trade and Industry
On 29 March 2018, the Minister of Trade and Industry published draft amendments to the Broad Based Black Economic Empowerment [...]
Nando’s vs Fernando’s
Nando's Chicken Limited is the proprietor of at least thirty nine UK trade marks and recently served a letter of [...]
Cryptocurrencies and tax
The advent of cryptocurrencies, and in particular the substantial gains that are associated with investments in cryptocurrencies, caught the attention [...]
Adidas and the stripes
By: Donvay Wegierski, Director In 2015, Adidas successfully opposed the registration of two EU marks comprising two stripes belonging to Shoe [...]
