In Minister of Defence and Military Veterans v Zeal Health Innovations (Pty) Ltd [2026] ZACC 21, the Constitutional Court (“the Court”) clarified the rights of service providers whose contracts with the State are later found to be invalid. As the Court noted in paragraph 47 of its majority judgment, the question concerning how to protect innocent contractors when public contracts are declared invalid is one that arises frequently in South African law.

The background: A familiar problem

Following a procurement process, the Department of Military Veterans (“the Department“) appointed Zeal Health Innovations (Pty) Ltd (“ZHI”) to provide healthcare and wellness services to military veterans for a three-year period between 2015 and 2018 (“the Tender”). ZHI rendered services under the contract for approximately two and a half months, from 1 June to 12 August 2015, and submitted invoices that became due and payable. On 11 August 2015, the Department informed ZHI that it intended to review the procurement process. Acting on this intimation, ZHI in effect suspended all services, except for emergency services, under the contract on 12 August 2015. The Department also refused payment of ZHI’s outstanding invoices, prompting ZHI to institute proceedings for specific performance. The Department, in turn, filed a counter-application to review and set aside the award of the Tender and the contract. The High Court ultimately reviewed and set aside the Tender and the contract, primarily because it exceeded the Department’s approved budget in breach of the statutory requirements contemplated in the Public Finance Management Act 1 of 1999. The High Court nevertheless found that ZHI was blameless in the irregularity and was therefore an innocent contractor. It did not, however, grant relief under section 172(1)(b) of the Constitution, nor did it consider what remedy would be just and equitable to compensate ZHI for the services it had rendered or to protect its position as an innocent contractor.

ZHI appealed to the Supreme Court of Appeal, primarily arguing that the review should have been dismissed. Alternatively, it sought relief under section 172(1)(b), preserving its contractual rights despite the declaration of invalidity. The SCA dismissed the appeal on invalidity. It further held, however, that section 172(1)(b) confers a true discretion to be exercised case by case. Although the contract was invalid, ZHI had rendered services, was not complicit in the irregularities, and had been found to be an innocent party. The SCA therefore held that ZHI was entitled to “payment of any amount it is able to establish.”

On appeal, the central issue before the Constitutional Court was what remedy, if any, is available to an innocent service provider that has performed under a State contract later declared invalid. In particular, and to quote the Constitutional Court, the question before it was: “does the absence of a right to benefit from an unlawful contract amount to an exclusion of such benefit from the exercise by a court of its just and equitable discretion under section 172(1)(b)?”

The Constitutional Court’s approach

The Court confirmed that a just and equitable order under section 172(1)(b) of the Constitution involves the exercise of a judicial discretion, which must be applied judiciously and with regard to the facts of each case. In this matter, several features were relevant to that discretion: ZHI was an innocent party and was not complicit in the Department’s irregularities; for a period of two and a half months it had performed actual services under the contract; it incurred costs in delivering those services and submitted invoices for payment; the Department had approved the invoices and the erstwhile Director-General had approved a memorandum authorising payment to ZHI which was later overturned by the Minister who instructed that ZHI should not be paid; and the Department only challenged the Tender after ZHI had already performed its obligations for a period.

Furthermore, the Court rejected the Department’s contention that ZHI’s recovery should be limited to out-of-pocket expenses without any allowance for profit. The Court correctly affirmed that where an innocent contractor has rendered services pursuant to an invalid contract, the appropriate point of departure is the preservation of accrued contractual rights, as recognised in State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd 2018 (2) SA 23 (CC).

Mathopo J held that this principle entails that compensation for services actually rendered must be calculated at the contractual rate, which necessarily includes the contractor’s profit margin. In other words, while the contract cannot be enforced in full, an innocent contractor is entitled to be compensated on the agreed terms for the period of actual performance, rather than being confined to mere cost recovery.

Why the judgement matters

The significance of the judgment extends beyond the specific dispute between ZHI and the Department. It provides welcome certainty for businesses that contract with organs of state by confirming that an innocent service provider will not necessarily be deprived of compensation merely because a procurement process and the resultant contract are subsequently declared unlawful.

The Court’s approach recognises an important commercial reality. Service providers frequently invest substantial resources, incur operational costs, and allocate personnel in reliance on contracts awarded by the State. If contractors were restricted to recovering only their out-of-pocket expenses, or worse, left without any remedy at all, the risks associated with doing business with government would increase significantly.

The judgment therefore strikes an appropriate balance between two competing constitutional objectives. On the one hand, it preserves the principle of legality by confirming that unlawful procurement processes cannot simply be validated after the fact. On the other hand, it ensures that the consequences of invalidity do not unfairly prejudice innocent contractors who have acted in good faith and delivered value to the State.

Importantly, the Court’s reasoning also discourages opportunistic conduct by organs of state. State entities cannot readily rely on their own procurement failures as a basis to avoid paying for services they have received and benefited from.

That said, the Court did not afford innocent contractors carte blanche to claim for any period. Rather, a contractor’s entitlement is limited to the period during which services were actually delivered. Importantly, contractors should continue to undertake careful procurement due diligence, as the availability and scope of any remedy will remain dependent on the facts of each case.

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On 12 March 2026, the Minister of Communications and Digital Technologies, Mr Solly Malatsi, published for public comment the Draft Policy Direction on Matters Relevant to Electronic Communications Network Deployment Pursuant to the National Policy on Rapid Deployment of Electronic Communications Networks and Facilities, 2023 (“the Draft Policy”).

The Draft Policy largely concentrates on the rapid deployment of electronic communications facilities with the objectives being to give effect to existing national and sector policy pertaining to access required to use of both public and private land in order to facilitate the rollout of nationwide affordable high-speed broadband networks, it directs the Independent Communications Authority of South Africa (“ICASA“) to review and if necessary, strengthen the Facilities Leasing Regulations promulgated under the Electronic Communications Act, 2005 (“ECA“) having particular regard to:

• the qualifying criteria for licensees who wish to exercise their section 22 rights. As a minimum, ICASA is directed that this qualifying criteria must include that the licensee holds a valid electronic communication network service license and is incompliance with their obligations in accordance with the license; there are no other suitable forms of access requested to the facilities identified; and the requesting licensee has made available to ICASA the location of all of the facilities;
• the determination of essential facilities and the terms on which access to essential facilities will be granted;
• the concept of open access;
• improving the time within which requests must be considered and approved, and agreements finalised by licensees in terms of chapter 8 of the ECA; and
• monitoring, enforcement and implementation of the amended Facilities Leasing Regulations, which shall include the filling of all agreements with ICASA.

The explanatory memorandum to the Draft Policy, in respect of facilities leasing, further records that whilst the Facilities Leasing Regulations have been helpful in facilitating network-sharing and network access to enable competitors to avoid duplicating infrastructure, reducing the strain on the environment and reducing costs, the impact of the Regulations on network deployment and affordable access has not been assessed.

Although ICASA is yet to amend the Facilities Leasing Regulations, on 20 April 2026, the Minister introduced, in the National Assembly, the Electronic Communications Amendment Bill (“Amendment Bill“). In respect to facilities leasing, the Amendment Bill proposes the following amendments to the ECA:

• the addition of “AND WHOLESALE PRICING RULES OR STANDARDS” in the heading of Chapter 8 of the ECA;
• the inclusion in section 43(8) of an obligation on ICASA to prescribe the list of essential facilities within 12 months of the coming into operation of the Amendment Act;
• the amendment of the days provided for in section 43(8A) (b) for licensees receiving requests for leasing facilities to agree on non-discriminatory terms and the conditions for facilities leasing within 60 days and no longer 20 days and where there is a dispute on the non-discriminatory terms, that such conditions be imposed by ICASA within 60 days of receiving notification of the failure to reach an agreement; and
• the review of the Facilities Leasing Regulations at least once every 24 months with due regard to market and legal developments.

Similar to the memorandum to the Draft Policy, the memorandum on the objects of the amendment bill indicates that the Amendment Bill seeks to improve the facilities leasing framework. Hopefully the introduction of the Amendment Bill (and to some extent the Draft Policy) will lead to a more defined process for purposes of implementing section 43 (1) of the ECA read with Regulation 3 of the Facilities Leasing Regulations.

Section 43(1) of the ECA provides an obligation on licensees to, on request, lease electronic communications facilities (i.e. infrastructure) to another licensee (including exemption holders) subject to terms and conditions of an electronic communications facilities lease agreement which the parties must enter into, unless the request is considered unreasonable (often arising from economic or technical feasibility). A clear issue that has arisen is the interpretation of section 43(1) of the ECA relating to which party must initiate the process of facilities leasing and the corresponding rights and/or obligations of the respective parties, namely, the “facilities seeker” and the facilities provider”.

The issue raised above is compounded by the conflicting judgments handed by the Gauteng Division of the High Court, Pretoria in Octotel (Pty) Ltd v Chairperson, Independent Communications Authority of South Africa and Others 2026 JDR 0307 (GP) and Metrofibre Networx (Pty) Ltd v Independent Communications Authority of South Africa and others 2024 JDR 4018 (GP), on the interpretation of the said section insofar as which party must trigger the process, and further on the issue as to whether ownership of the electronic facilities, is an element to be considered in determining the process under section 43(1) of the ECA.

While both of these cases are currently on appeal in the Supreme Court of Appeal, it may have been beneficial for the drafters of the Amendment Bill to use the opportunity to add clarification language in the Amendment Bill which clarifies the interpretative mischief.

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The Labour Appeal Court’s judgment in Machi v Chep SA (Pty) Ltd and Others serves as an important reminder that workplace discipline is concerned with substance rather than technicalities. While employees are entitled to know the case they must meet, disciplinary proceedings are not criminal trials, and imperfectly drafted charges will not necessarily save an employee whose conduct fundamentally undermines the trust relationship.

The employee was employed by Chep as a Senior Human Resources Business Partner. In July 2017, while attending a company event in Cape Town, she requested permission to return early to Durban, explaining that she was feeling unwell and emotionally affected by the recent suspension of a colleague for fraud. Her manager approved the request and she flew back to Durban during normal working hours. However, instead of returning home to recover or reporting back to work, she went directly to the offices of a third-party company, Zala Corporates, where she chaired a disciplinary hearing. She later issued a finding in that matter describing herself as the company’s “HR Director”, despite not being a director or employee of Zala.   Following an investigation, Chep charged her with misconduct and dishonesty. She was ultimately dismissed.

The matter became more complicated at arbitration. The CCMA commissioner found the employee not guilty of the three formal charges contained in the charge sheet. Nevertheless, the commissioner concluded that the evidence revealed what was described as an “unexpressed fourth allegation” – namely that the employee had abused her employer’s trust by obtaining permission to leave a work function on grounds of illness and then performing work for another organisation during company time. The commissioner found that this conduct had destroyed the trust relationship and held the dismissal to be substantively fair, although procedurally unfair.

The employee challenged the award, arguing that the commissioner had improperly created a new charge that did not appear in the disciplinary notice. She contended that once she had been acquitted of the formal charges, the commissioner could not formulate a different basis to justify her dismissal. The Labour Appeal Court disagreed.

The Court held that the commissioner had not invented a new charge at all. Instead, the so-called “unexpressed fourth allegation” was simply a description of the conduct that had always formed the core of the employer’s case. The events of 6 July 2017 constituted a single factual narrative, and the employee had been fully aware throughout the disciplinary hearing and arbitration that her conduct in performing work for another entity after being excused from a company function was central to the allegations against her.

Importantly, the Court reaffirmed that disciplinary charges need not be drafted with technical precision. The real question is whether the employee understood the substance of the allegations and had a fair opportunity to defend herself. An employee suffers prejudice only where they are genuinely unaware of the case they are required to answer. In this instance, the employee had dealt extensively with the allegations during both the disciplinary process and arbitration and could not credibly claim to have been ambushed.

The Court was equally clear on sanction. As a senior HR professional, the employee occupied a position requiring a high degree of integrity, judgment and trust. By claiming to be unwell in order to avoid a work commitment and then undertaking work for another organisation during working hours, she engaged in conduct that struck at the heart of the employment relationship. Her actions were not viewed as a mere technical breach of policy, but as a deliberate and dishonest abuse of trust.

In dismissing the appeal, the Labour Appeal Court confirmed that dishonesty remains one of the most serious forms of workplace misconduct. Where an employee consciously acts in a manner that deceives the employer and undermines the trust relationship, dismissal will often be justified, particularly where the employee occupies a senior or fiduciary position.

The judgment offers a practical lesson for employers. While disciplinary charges should always be drafted carefully, labour tribunals will focus on the substance of the misconduct rather than the technical wording of the charge sheet. Ultimately, trust is the foundation of every employment relationship, and once that trust is deliberately betrayed, even a drafting defect is unlikely to save the employee.

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On 22 May 2026, South Africa’s Information Regulator served an enforcement notice on the Central Johannesburg TVET College after employees’ personal credential verification reports were accidentally emailed to unauthorised staff. The enforcement notice sets a significant precedent: even accidental, purely internal disclosures of personal information to unauthorised parties constitute a “security compromise” under the Protection of Personal Information Act 4 of 2013 (“POPIA“), triggering formal breach notification obligations. This article examines the enforcement notice, analyses its implications under POPIA, compares the position to the GDPR, and offers practical guidance for businesses.

Background

The Central Johannesburg TVET College (the “College“) had been placed under administration to address governance failures, including undisclosed criminal records and conflicts of interest among staff. As part of this process, employees’ personal information was collected to verify their academic qualifications and criminal records. This was done by a service provider preparing Personal Credential Verification Reports (“Verification Reports“). The Acting Chief Financial Officer erroneously included the complainants’ Verification Reports in a folder of finance policies, which was then emailed to unauthorised employees.

The email was recalled and a follow-up was sent alerting staff to the error. An investigation was launched and corrective action was taken against staff who forwarded the document.

The Information Regulator (the “Regulator”) identified three categories of POPIA violation. First, the College had failed to register an information officer or designate deputy information officers, breaching POPIA’s accountability condition (section 8). Second, distribution of the Verification Reports to staff uninvolved in the governance restoration exercise constituted further processing incompatible with the original collection purpose (section 15). Third, the College’s failure to maintain separate files for Verification Reports and finance policies, coupled with its failure to register an information officer, evidenced an absence of organisational controls to prevent unlawful access or processing (section 19). The Regulator found that the accidental internal disclosure triggered POPIA’s security compromise notification obligations under section 22, which the College had failed to discharge.

The Regulator directed the College to: (i) register an information officer and deputy information officers; (ii) formally notify the Regulator and affected data subjects of the compromise; (iii) issue a written apology to the complainants, to be circulated to all staff; (iv) take disciplinary action against the responsible employee; (v) develop and submit a POPIA Compliance Framework; and (vi) conduct staff awareness and training programmes. Failure to comply with an enforcement notice is a criminal offence punishable by a fine of up to R10 million, imprisonment of up to ten years, or both (section 103).

Accidental and Internal Breaches are Security Compromises

The most significant aspect of this enforcement notice is the Regulator’s confirmation that both accidental breaches and internal disclosures fall within the meaning of a “security compromise” for POPIA purposes. Section 22(1) requires a responsible party to notify the Regulator and affected data subjects “where there are reasonable grounds to believe that the personal information of a data subject has been accessed or acquired by any unauthorised person”. The provision does not distinguish between external attackers and internal employees, nor between deliberate and inadvertent disclosures. Any access by a person not authorised to receive the information is sufficient to trigger the obligation.

In the College’s case, the breach was entirely accidental: an employee attached the wrong file to an email, and the recipients were internal staff members, not external third parties. Nevertheless, the Regulator held that this constituted a security compromise triggering POPIA’s notification obligations in full. The College had attempted to mitigate the error by recalling the email, launching an investigation, and alerting employees that the information was not for staff use. However, the Regulator held that these good-faith remedial steps did not absolve the College of its statutory duty to formally notify the Regulator and affected data subjects. The message is clear: informal internal remediation, however swift, is no substitute for formal compliance with POPIA’s security compromise notification requirements.

This interpretation is grounded in the broad language of section 19(1), which requires responsible parties to take “appropriate, reasonable technical and organisational measures” to prevent, among other things, “unlawful access to or processing of personal information”. Read together with section 22, the statutory framework imposes a duty to safeguard personal information against all forms of unauthorised access, whether originating externally or internally, and whether intentional or accidental.

Key Takeaways for Businesses

Organisations must implement robust security measures to protect against both internal and external breaches. This requires both: (i) technological measures, such as access controls and data loss prevention technology; and (ii) organisational measures, such as policies, clear processes, and employee training. As the College’s case demonstrates, something as simple as storing personal information in a separate, access-controlled folder could have prevented the breach entirely.

Businesses should implement appropriate access controls to limit internal exposure to personal information. Personal information should be accessible only to those who require it for the specific purpose for which it was collected. Role-based access controls, file segregation, and clear protocols for handling sensitive documents are essential.

Every organisation should develop and maintain a comprehensive data breach response plan. The College’s experience illustrates that good-faith remedial steps – such as recalling an email and investigating internally – do not satisfy statutory breach notification obligations. A proper response plan should include: clear procedures for identifying and escalating potential security compromises; templates for notification to the Regulator and affected data subjects; designated personnel responsible for managing the response; and defined timelines to ensure notification is made “as soon as reasonably possible” as required by POPIA.

Most importantly, businesses must recognise the obligation to report all breaches to both the Regulator and affected data subjects. Unlike the GDPR, POPIA contains no materiality threshold. Every security compromise, no matter how minor, must be formally notified. Organisations should ensure that staff at all levels understand this obligation and that internal reporting channels are in place to escalate potential breaches promptly to those responsible for regulatory notification.

Conclusion

Although other jurisdictions, such as the EU and UK, also require reporting of internal and accidental breaches, they apply a materiality threshold and only high-risk breaches have to be reported. POPIA contains no such exception. The practical consequence is that private and public bodies under POPIA must report every security compromise, however minor, even a misdirected internal email. This places a considerable administrative burden on responsible parties, and it stretches the Regulator’s finite resources. In the absence of a materiality threshold, there is a real risk that regulatory attention is diverted from serious incidents to trivial ones. Until the legislature revisits this position, however, organisations must comply with the law as it stands.

Responsible parties must treat their data security obligations with the seriousness they demand or face the risk of a simple mistake inviting the full scrutiny of the Regulator, as was unfortunately the case for the College.

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Background

After emigrating to Australia, the respondents, Mr and Mrs Venter (the “Venters“), leased their Stellenbosch property at De Zalze Winelands Golf Estate, to the appellant, Mr Els, for a period of three years ending on 31 December 2023 (the “first lease“). After the first lease expired, the parties concluded a second lease agreement (the “second lease“) on 4 August 2023 for a further three-year period, commencing on 1 January 2024. The second lease permitted the Venters to terminate the agreement by providing three months’ written notice.

The property was subsequently sold on 19 December 2023, and the Venters issued a termination notice on 21 December 2023 requiring Mr Els to vacate the property by 31 March 2024. Mr Els challenged the termination on the basis that the second lease constituted a fixed-term agreement under the CPA, which could only be terminated by the Venters in the event of his material failure to comply with the lease agreement.

The parties failed to resolve the dispute, and the Venters launched an urgent application in the Cape Town High Court, seeking an order that the second lease was validly terminated and that Mr Els must vacate the property. The High Court agreed with the Venters that the CPA did not apply and ordered Mr Els to vacate by 31 March 2024. Mr Els subsequently took the matter on appeal to the SCA.

Key CPA Terms and Concepts

Before addressing its substantive reasoning, the court considered several key terms and concepts under the CPA. The CPA applies to every “transaction” occurring in South Africa, unless specifically excluded. A “transaction” is defined as a “person acting in the ordinary course of business“, as including, amongst others, (i) an agreement for the supply or potential supply of any goods or services in exchange for consideration, or (ii) the performance of services for or at the direction of a consumer for consideration.

“Service” is in turn defined as including, amongst others, access to or use of any premises or property in terms of a “rental“; whereas a “rental” means an agreement for consideration in the ordinary course of business in terms of which temporary possession of any premises or property is delivered to the consumer; or the right to use any premises or property is granted to the consumer.

The CPA does not define “ordinary course of business“. It does however define “business” as “the continual marketing of any goods or services” and “market” as to “promote or supply any goods or services“.

The Test for the CPA to Apply to a Residential second lease

The SCA held that for the CPA to apply to a residential lease, two requirements must be satisfied. First, the lessor must be in the business of letting or hiring. Second, the lease must be within the lessor’s ordinary course of business, being their normal, routine, or day-to-day business activities, rather than a once-off transaction. Only if both requirements are met will a residential lease constitute a “rental” for CPA purposes, and only then will the lessee be a “consumer“, namely a person to whom “services are marketed in the ordinary course of the supplier’s business“.

Whether a lease is in the lessor’s ordinary course of business is an objective test that depends on the circumstances of each case.

Application to the Facts

The court held that the letting of the property was not in the course of the Venters’ business or trade, let alone in the ordinary course of business. The Venters were not in the business of letting property for consideration: each of them was engaged in their own occupation, and they rented out their family home in South Africa after emigrating. The second lease was therefore an agreement between private individuals and not a commercial letting arrangement.

It followed that, for the purposes of the CPA, the Venters were not “suppliers” as they did not promote or supply any goods or services to consumers. Nor was Mr Els a “consumer” to whom services were marketed in the ordinary course of business.

The court further observed that the second lease was not a fixed-term agreement in terms of the CPA as it exceeded the maximum period of 24 months prescribed in Regulation 5(1) of the Consumer Protection Regulations (the second lease was for 36 months). This meant that Mr Els’s reliance on section 14(2)(b)(ii) of the CPA was misplaced. The section provides that a supplier may only cancel a fixed-term agreement after giving 20 business days’ written notice to the consumer of a material failure to comply with the agreement, and only if the consumer has not rectified the failure within that time. It should be noted, however, that this aspect of the SCA’s reasoning is questionable: if an agreement qualified as a fixed-term agreement but was for a period exceeding 24 months, the more logical conclusion would be that the supplier had contravened the CPA with regard to the length of the agreement, rather than that the agreement ceased to be a fixed-term agreement altogether.

The SCA also bolstered its interpretation by reference to the CPA’s underlying purpose, which it held was to protect the rights of historically disadvantaged persons who are vulnerable to exploitation. The court noted that Mr Els – the Chief Group Economist of Old Mutual – was not a vulnerable, low-income consumer. He had freely concluded the second lease on an equal bargaining footing with the Venters and was fully apprised of the circumstances, including that the second lease would be terminated once the property was sold.

The PIE Issue

Although the SCA dismissed Mr Els’s appeal in the main, it found that the High Court erred in ordering Mr Els to vacate the property by 31 March 2024. This order effectively amounted to an eviction order, which was incompetent because Mr Els was not yet an unlawful occupier under the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No 19 of 1998 (the “PIE Act“).

More fundamentally, the order cut across the powers conferred upon a court under section 4(7) of the PIE Act, which requires a court to consider whether it is just and equitable to grant an eviction, having regard to all relevant circumstances. The SCA accordingly set aside the High Court’s order in this regard.

Conclusion and Key Takeaways

Save for the setting aside of the High Court’s vacation order, Mr Els’s appeal was dismissed, with costs on the scale as between attorney and own client.

This judgment provides important clarity regarding the application of the CPA to residential leases. The CPA applies only to residential leases that are entered into in the ordinary course of the lessor’s business. Private individuals who let their own property on an occasional basis are unlikely to fall within the Act’s ambit.

Following an objective test, a court will consider not whether the transaction itself is ordinary, but whether it is carried out in the ordinary course of the supplier’s business. The SCA’s interpretation is both practical and sensible: a person in the business of letting property will be required to comply with the CPA (and ensure a lessee is provided with the protections contained in the Act); whereas someone renting out their home is unlikely to the CPA’s stringent obligations.

The SCA also relied on the CPA’s purpose to protect vulnerable and historically disadvantaged consumers and took into account Mr Els’s bargaining power when reaching its decision. We hope that the courts continue to take such a purposive and pragmatic approach to the interpretation of the CPA.

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For many years, workplace bullying occupied an uncomfortable space in South African labour law. Employers recognised the damage it caused, employees experienced its effects, but disciplinary action often struggled to gain traction where misconduct did not fit neatly into traditional categories such as insubordination, harassment, or misconduct. A recent CCMA arbitration award in National Education Health & Allied Workers Union obo Mosimane v University of the Witwatersrand provides a timely reminder that workplace bullying is not merely a management issue – it can justify dismissal where the conduct is sufficiently serious and sustained.

The employee, a Senior Faculty Officer with more than 22 years’ service at the University of the Witwatersrand, was dismissed following numerous complaints from junior colleagues who accused her of bullying, intimidation, victimisation, humiliation and harassment. The allegations painted a troubling picture of a senior employee who repeatedly belittled subordinates, publicly criticised colleagues, withheld training, undermined staff members in front of students and co-workers, and used her position of authority to create a climate of fear.

The employee challenged both the procedural and substantive fairness of her dismissal at the CCMA, seeking reinstatement.

Central to the dispute was Wits University’s bullying policy, which defines bullying as repeated unwanted conduct that humiliates, demeans, lowers self-esteem, creates a hostile environment, or results in an unacceptable working environment. The policy specifically recognises the abuse of power as a hallmark of bullying and acknowledges that such conduct may manifest through intimidation, harassment and interference with a colleague’s ability to perform their work effectively. This is aligned to the Code of Good Practice on the Prevention and Elimination of Harassment in the Workplace, released in 2022.

The evidence presented by the University was extensive. Multiple witnesses testified that the employee routinely shouted at colleagues, publicly embarrassed them, threatened their job security, undermined their competence, and failed to provide adequate training while simultaneously criticising performance shortcomings that arose from that lack of training. Several witnesses described feeling humiliated, intimidated and emotionally distressed by the employee’s conduct. One employee required counselling, while others became visibly emotional when recounting their experiences during the arbitration proceedings.

Significantly, the commissioner found that the evidence revealed a sustained pattern of misconduct rather than isolated incidents. The conduct was directed predominantly at junior employees and was enabled by the employee’s seniority and authority within the faculty. The commissioner concluded that the behaviour caused demonstrable psychological harm, disrupted workplace harmony and created a toxic working environment.

Perhaps more damaging than the misconduct itself was the employee’s response to the allegations. Rather than acknowledging any wrongdoing, she maintained that the complaints were fabricated and advanced a theory that multiple colleagues had conspired to remove her from the workplace. The commissioner rejected this explanation, finding it inherently improbable that several employees would independently manufacture complaints over an extended period.

The award contains particularly strong commentary regarding accountability. The commissioner observed that the employee’s continued denial of the conduct, coupled with attempts to minimise or dismiss the experiences of the complainants, demonstrated a profound lack of insight. Her refusal to accept responsibility, apologise or show remorse was regarded as a significant aggravating factor. Indeed, the commissioner noted that progressive discipline presupposes some appreciation of wrongdoing and a willingness to correct behaviour. In the absence of such insight, corrective discipline serves little purpose.

The commissioner ultimately concluded that dismissal was both procedurally and substantively fair. In doing so, emphasis was placed on the employee’s senior position, the repeated nature of the misconduct, the abuse of authority, the emotional harm suffered by multiple employees, and the complete breakdown of trust resulting from her continued denial and victim-blaming.

The decision sends a clear message to employers and employees alike. Modern workplaces are increasingly focused on psychological safety, dignity and respectful engagement. Bullying is no longer viewed as a personality clash or a management inconvenience. Where a senior employee engages in sustained conduct that humiliates, intimidates or victimises colleagues, particularly where power imbalances are exploited, dismissal may well be an appropriate sanction – even where the employee has lengthy service.

For employers, the case highlights the importance of having robust anti-bullying policies and taking complaints seriously. For employees, especially those in leadership positions, it serves as a stark warning that authority carries responsibility. Leadership by intimidation is not leadership at all – and where workplace toxicity becomes entrenched, the CCMA has shown little hesitation in endorsing dismissal as the appropriate remedy.

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The dispute in Summer Season Trading 63 (Pty) Ltd v The City of Tshwane Metropolitan Municipality 2021 JDR 0291 (GP) (“the Summer season case“) arose after hundreds of unlawful occupiers settled on land owned by Summer Season Trading 63 (Pty) Ltd. Following protracted litigation, the landowner secured an eviction order, while the City of Tshwane was directed to provide alternative accommodation to the occupiers. Rather than implementing the eviction and relocation process, the City purported to take the extreme step of expropriating the property, contending that the acquisition was necessary to facilitate access to housing for the occupiers.

The landowner challenged the validity of the expropriation, arguing that the City lacked the requisite statutory authority to do so, and was attempting to circumvent its obligations under the eviction order. The Supreme Court of Appeal (“the SCA“) was thus called upon to determine whether the expropriation was lawfully authorised and constitutionally permissible. The SCA upheld the challenge, finding that the City lacked lawful authority to expropriate the property for the stated purpose and that the expropriation amounted, in substance, to an impermissible attempt to avoid compliance with the existing eviction and relocation orders. The case accordingly raised important questions concerning the limits of municipal expropriation powers, the protection of property rights, and the operation of the principle of legality.

Reaffirmation of property rights

The SCA’s decision in the Summer season case constitutes a clear reaffirmation that the right not to be arbitrarily deprived of property in South Africa remains firmly protected under the Constitution and cannot be replaced by administrative expediency. The emphasis brought by this case is that expropriation is a narrowly circumscribed power that must be exercised strictly within a valid legislative framework. By invalidating the City’s attempted expropriation, it effectively confirmed that municipalities may not rely on broad, implied, or expedient powers, nor invoke generalised social hardship, to justify interference with private ownership outside the confines of statute and the Constitution.

For landowners, the decision provides important certainty, where they act lawfully particularly by complying with proper eviction procedures, the courts will provide substantive protection. Property cannot be arbitrarily sacrificed to address systemic housing challenges, and any deprivation must meet both the source of power and lawful purpose requirements embedded in section 25 of the Constitution of the Republic of South Africa, 1996 (“the Constitution“).

Limits on expropriation

The judgment reinforces the Court’s rejection of loosely constructed expropriation powers. The Court held that the City could not rely solely on the Local Government Ordinance,1939 and the Expropriation Act 63 of 1975, as these did not confer substantive authority to expropriate land for housing purposes. Instead, the Housing Act 107 of 1997 together with its jurisdictional safeguards constituted the appropriate legislative vehicle. This underscores that expropriation is not merely a matter of asserting a public purpose, but of demonstrating clear statutory authority and strict compliance with the relevant enabling framework.

The Court further interrogated the true purpose underlying the expropriation and found that it was aimed at circumventing an existing eviction order and avoiding relocation obligations. Such use of expropriation was held to be impermissible. For landowners, this confirms that courts will scrutinise not only the formal legality of the process but also whether the power is exercised for its proper statutory purpose, rather than for ulterior or tactical ends.

Eviction orders and the rule of law

The judgment is particularly significant in its robust defence of the rule of law and the binding effect of court orders. The Court rejected the City’s attempt to deploy expropriation as a means of neutralising a final eviction order, emphasising that administrative action cannot trump judicial determinations. In doing so, the court reinforced the principle that court orders are binding and must be complied with unless and until they are lawfully set aside.

For landowners, this constitutes a critical safeguard. Once an eviction order has been properly obtained and upheld in the landowner’s favour, it cannot be indirectly undone through any subsequent state action. The decision further underscores that municipalities bear enforceable obligations to provide alternative accommodation and to effect relocations in accordance with court orders, rather than shifting that burden onto private landowners.

Housing rights and ownership

Importantly, the Court did not disregard the realities of South Africa’s housing crisis. It acknowledged that occupiers had established long-standing communities, with homes, livelihoods, and social networks rooted in the land. However, it drew a principled distinction between the State’s constitutional obligation to provide access to housing and the rights of private landowners. The primary responsibility to address homelessness rests with the State, not with individuals whose land has been unlawfully occupied.

The Court reaffirmed that section 26 of the Constitution does not entitle occupiers to remain indefinitely on privately owned land of their choosing. While eviction must always be just and equitable, ownership rights are not extinguished by prolonged unlawful occupation. This preserves the constitutional balance, and socio-economic rights are safeguarded, but not at the cost of undermining property rights or the rule of law. The Court has emphatically reaffirmed the strength and scope of the right of ownership, illustrating that it remains a powerful and enduring legal entitlement.

The central role of compliance with all statutory obligations

The strength of the Summer Season judgment lies in its protection of ownership where the landowner has acted lawfully. However, this must be considered alongside recent jurisprudence from the Land Court, which illustrates the converse principle. In several instances, the Land Court has declined to grant eviction orders in favour of landowners or mining right holders, despite extensive relocation efforts, where those parties have failed to comply with statutory requirements under Interim Protection of Informal Land Rights Act 31 of 1996 (“IPILRA“) and the Mineral and Petroleum Resources Development Act 28 of 2002 (“MPRDA“). This includes failures to obtain the requisite community consent and to exhaust applicable dispute resolution mechanisms.

This theme finds clearer expression in the critical Constitutional Court judgment of Maledu and Others v Itereleng Bakgatla Mineral Resources (Pty) Ltd and Another 2019 (2) SA 1 (CC) (“the Maledu case“), where the Court reaffirmed that strict compliance with statutory safeguards is a prerequisite for the granting of eviction orders in favour of landowners. The judgment further highlights the protection afforded to informal land rights where such rights are implicated. The underlying principle is that, for our Courts, compliance, rather than ownership alone, is a decisive factor in property disputes. While the Summer Season case protects landowners against unlawful state interference, the Maledu case in contrast protects occupiers where landowners or mining right holders fail to adhere to the applicable governing legislative framework.

Cumulatively, these cases denote a coherent and principled approach that, South African courts remain committed to protecting landowners from arbitrary deprivation of their property and will not permit arbitrary expropriation or the indefinite unlawful occupation of private land. However, that protection is not automatic; it is contingent upon strict compliance with the applicable legal framework, whether under the Restitution of Land Rights Act 22 of 1994 (“the Restitution Act“), Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (“PIE“), Extension of Security of Tenure Act 62 of 1997 (“ESTA“), IPILRA, the MPRDA, or any expropriation legislation.

The Summer Season case demonstrates that courts will robustly uphold ownership where the landowner has acted lawfully and the State has failed to do so. By contrast, emerging jurisprudence out of the Land Court illustrates that even strong proprietary or commercial interests may falter where statutory safeguards are disregarded. The emerging position is therefore clear that ownership remains strongly protected in South African law, but its enforcement is not absolute, regard being had to substantive adherence to legality, procedure, and constitutional norms.

On one hand, the judgment may attract criticism for potentially constraining municipalities’ or, more broadly, the State’s flexibility in responding to urgent housing crises, raising questions as to how local government can practically reconcile its constitutional housing obligations with strict legality requirements. On another hand, it may be argued that the State is by no means precluded or constrained from responding decisively to housing challenges or from exercising its full range of powers to provide access to housing. The cases embody the fact that responses to modern urban homelessness and the demand for minerals in rural areas, must be occur within the bounds of the law. Compliance with statutory and regulatory requirements cannot be overlooked in the name of expediency; it is foundational.

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Introduction

In this article series, we take a deep dive into the South African Conduct of Financial Institutions (COFI) Bill – a major financial sector regulatory reform – one theme at a time.

COFI was drafted in conjunction with the Financial Sector Regulation Act (FSRA), the two pillars of the Twin Peaks regulatory reform. The Twin Peaks regulatory reform is a response to financial system weaknesses identified by the 2008 Global Financial Crisis, such as the systemic risks of large insurers and inappropriate market conduct practices.

The FSRA has already been implemented. The FSRA introduced the Twin Peaks regulatory framework, bringing into existence two regulators for the industry. The first regulator is the Prudential Authority (PA) responsible for the prudential regulation of financial institutions, while the second is the Financial Sector Conduct Authority (FSCA) responsible for regulating market conduct.

COFI represents a major overhaul of how financial institutions will be regulated in South Africa. Currently, different financial institutions are regulated by different legislation. COFI will involve shifting to a harmonised, principles-based conduct regime focused on customer outcomes, transparency and inclusion. COFI also provides for a single licensing and supervision framework and stronger enforcement and standards across the financial sector. Its implementation will unfold over several years and reshape regulatory expectations for financial institutions and consumers alike.

National Treasury has indicated that COFI will be finalised in 2026. COFI has recently been adop­ted by Cab­inet for sub­mis­sion to Par­lia­ment.

Principles and Conduct Requirements: Part 4

In our previous articles, we examined the Purpose and Application of COFI, the Licensing Framework and Consumer Protection and Transparency under COFI. In this article, we consider the conduct requirements introduced by COFI, which form the core of the new market conduct regime.

A shift to outcomes-based regulation

COFI represents a decisive move away from detailed, rules-based regulation towards a principles-and outcomes-based framework. Rather than prescribing exhaustive requirements for each sector, COFI establishes overarching conduct principles that apply across all financial institutions.

At the centre of this framework is the expectation that financial institutions must deliver fair outcomes for financial customers. This reflects the long-standing “Treating Customers Fairly” (TCF) approach, embedded into primary legislation.

Financial institutions will be required not only to comply with specific rules, but to demonstrate that their business models, products and distribution practices consistently result in fair customer outcomes.

While the conduct framework under COFI is conceptually coherent, it raises a number of practical challenges. The concern most commonly raised is that the shift to an outcomes-based model introduces interpretive uncertainty. Unlike a rules-based framework, which provides prescriptive requirements and clearer compliance benchmarks, an outcomes-based approach requires financial institutions to exercise judgment in determining what constitutes “fair outcomes” in a wide range of contexts. This creates challenges in both designing compliant processes and evidencing compliance to the regulator. Institutions may struggle to assess whether their product design, distribution strategies, pricing models and customer communications meet the required standard, particularly where customer outcomes may vary across different segments.

Conduct standards and regulatory flexibility

A key feature of COFI is the expanded role of the FSCA in issuing conduct standards. These standards will provide more detailed, activity-specific requirements that sit beneath the primary legislation.

This approach allows the regulatory framework to evolve over time, enabling the FSCA to respond more quickly to emerging risks, new products and market developments without requiring legislative amendment.

However, this flexibility also introduces a degree of regulatory uncertainty, particularly in the early stages of implementation, as much of the practical detail will be contained in future conduct standards rather than in COFI. In addition, the lack of early guidance increases the risk of inconsistent interpretation across the industry, potentially leading to uneven application of the law and retrospective regulatory scrutiny once conduct standards and supervisory expectations become more clearly defined.

Core conduct principles

COFI introduces a set of high-level conduct principles that apply across the financial sector, including acting honestly, fairly, and with due skill, care and diligence; avoiding conflicts of interest; ensuring that customers are provided with clear, appropriate and timely information; and design and distribution of financial products in a manner that is appropriate for the target market. These principles are deliberately broad and are intended to apply across a wide range of business models and activities.

Product life cycle

COFI places significant emphasis on product governance and oversight. Financial institutions will be required to ensure that (a) products are designed with a clearly identified target market; (b) distribution strategies are aligned to that target market; and (c) products continue to perform as expected over their lifecycle.

This represents a shift from a disclosure-based regime to one that scrutinises the entire product lifecycle, from design through to post-sale monitoring.

Conduct culture

COFI is focused on conduct culture within institutions. Boards and senior management will be expected to take responsibility for embedding a culture that prioritises fair customer outcomes.

This reflects a broader regulatory trend towards holding senior individuals accountable for the conduct of the institutions they manage.

Practical implications

COFI’s conduct requirements will require financial institutions to move beyond a tick-box compliance approach and towards a more holistic, outcomes-focused model.

In preparation, institutions should consider reviewing their product governance frameworks, assessing how customer outcomes are currently measured and monitored, strengthening conduct risk management processes and embedding conduct considerations into decision-making at all levels of the organisation.

Ultimately, COFI signals a shift towards a regulatory regime in which it is not only what you do that counts, but how you behave while doing it and how it lands with consumers.

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On 18 May 2026, the Constitutional Court (“CC”) in Solidarity Trade Union and Others v Minister of Health and Others [1] confirmed the invalidity of the Certificate of Need (“CoN”) provisions contained in sections 36 to 40 of the National Health Act [2] (“NHA”).

The CC found that the CoN provisions were irrational and unjustifiably limited the right to choose a trade, occupation or profession freely. The CC’s invalidity confirmation has prompted closer examination of the role that the concept of “need” plays within South Africa’s healthcare legislative framework.

Such examination is warranted because the CoN provisions incorporated considerations of need into the regulatory framework governing whether or not and where healthcare service providers could establish, construct, modify or acquire health establishments or provide prescribed health services. [3] The CC’s judgment therefore brought an end to a legislative scheme in which an assessment of need formed part of the criteria determining whether or not and where healthcare service providers could establish, construct, modify or acquire health establishments or even provide prescribed health services.

In terms of the CoN scheme, healthcare service providers were required to obtain approval from the Director General of the National Department of Health (“Director General”) before establishing, constructing, modifying or acquiring health establishments or providing prescribed health services. In determining whether or not to grant such an approval, the Director General was required to consider various factors, including, amongst others, the need to promote the equitable distribution and rationalisation of healthcare services and resources, address inequities based on racial, gender, economic and geographical considerations, and promote an appropriate mix of public and private healthcare services. [4] Accordingly, the concept of “need” formed an integral part of the considerations informing the Director General’s decision whether or not to grant or refuse a CoN application.

Following the CC’s judgment, questions naturally arose regarding whether or not, and to what extent, similar considerations of need continue to feature in other healthcare legislation.

In particular, the incorporation of the concept of “need” in the National Health Insurance Act [5] (“NHI Act”) raises important questions regarding how that concept ought to be interpreted and implemented so as to avoid the constitutional difficulties that resulted in the invalidation of the CoN provisions. Although the NHI Act does not establish a CoN regime and does not require healthcare service providers to obtain prior approval in order to operate, references to “need” feature prominently throughout the NHI Act’s currently proposed purchasing, contracting and accreditation framework. In particular –

• the Fund is required to actively and strategically purchase healthcare services on behalf of users in accordance with need [6];

• the Fund must enter into contracts with accredited healthcare service providers and health establishments based on the health needs of users [7];
• healthcare service providers and health establishments, seeking accreditation, must demonstrate that they meet the needs of users and comply with prescribed performance criteria [8]; and
• the Fund may conclude legally binding contracts only with health establishments and prescribed healthcare service providers that satisfy the applicable accreditation requirements. [9]

Accordingly, whilst healthcare service providers remain free to operate in the absence of accreditation, participation in the provision of Fund-funded healthcare services is dependent upon satisfying the requirements prescribed by section 39(2) of the NHI Act.

Given that the Fund is to be the single purchaser of healthcare services covered under the NHI framework, the inability to obtain accreditation may substantially affect a healthcare service provider’s ability to render Fund-funded services and, consequently, to participate effectively in that segment of the healthcare market. In this respect, the practical implications of accreditation under the NHI Act warrant consideration alongside the concerns identified by the CC regarding the use of regulatory mechanisms that may limit the extent to which healthcare service providers are able to exercise their right to choose a trade, occupation or profession freely.

It is therefore necessary to consider the role that “need” plays within the NHI Act and, concomitantly, whether the CC’s treatment of the concept of “need”, in the context of the CoN scheme, now provides any insight into how the concept of “need” should be interpreted and applied under the NHI accreditation framework.

Applying the principles of statutory interpretation, the phrase “needs of users” must be interpreted in accordance with its ordinary grammatical meaning, read in context and having regard to the purpose of the NHI Act. [10]

Ordinarily, the phrase “needs of users” may be understood as referring to the healthcare requirements of persons entitled to receive healthcare services funded by the Fund. In this regard, the NHI Act seeks to achieve universal access to quality healthcare services through the strategic purchasing of healthcare services by the Fund based on the health needs of users. Viewed in this context, the reference to need within the NHI Act appears directed towards ensuring that healthcare services purchased by the Fund correspond with the healthcare requirements of the population served by the Fund.

Nevertheless, the NHI Act does not define what constitutes the “needs of users” nor does it prescribe the criteria against which those needs are to be assessed. The absence of specific statutory guidance regarding the factors relevant to determining whether or not a particular healthcare service provider meets the needs of users may afford the Fund a measure of discretion in the accreditation process.

There are, however, important distinctions between the two regimes: the CoN scheme directly restricted the ability of healthcare service providers to establish, acquire or modify health establishments in the absence of administrative approval but, by contrast, the NHI Act does not prohibit healthcare service providers from operating without accreditation. Instead, the NHI Act regulates participation in the provision of healthcare services financed by the Fund.

The constitutional significance of the CoN judgment therefore lies not merely in the invalidation of the CoN scheme itself, but in the caution that judgment provides against the future interpretation and implementation of healthcare legislative provisions, which incorporate considerations of “need” in a manner capable of affecting the exercise or limitation of constitutional rights.

Notwithstanding these differences, both frameworks incorporate considerations of need into administrative decision-making processes that influence the extent to which healthcare service providers may participate in the delivery of publicly funded healthcare services. To this limited extent, the CC’s reasoning in the CoN judgment remains relevant to discussions concerning the implementation of the NHI Act. More specifically, the CC’s judgment illustrates that, notwithstanding the legitimacy and importance of the public health objectives pursued by the CoN scheme, legislative measures designed to achieve those objectives must bear a rational connection to their stated purpose. In the absence of such a rational connection, those legislative measures are susceptible to constitutional challenge and may be declared legally invalid. [11]

The invalidation confirmation of the CoN provisions by the CC should serve as a cautionary reminder when considering the role of “need” within the NHI framework.

Although the NHI accreditation framework differs from the CoN scheme in several respects, the incorporation of “need” into the Fund’s purchasing, contracting and accreditation functions warrants careful scrutiny as and when the framework is implemented in practice. Particular care should, therefore, be taken to ensure that the interpretation and application of the “needs of users” requirement do not produce outcomes that replicate the constitutional defects identified by the CC in the CoN scheme.

Accordingly, the implementation of the NHI Act must be accompanied by clear criteria, rational decision-making processes and appropriate procedural safeguards to ensure that the operation of the “need” requirement does not produce outcomes analogous to those that led to the invalidation of the CoN scheme.

[1] [2026] ZACC 19 (18 May 2026).

[2] No. 61 of 2003.

[3] Section 36(3) of the National Health Act.

[4] Solidarity Trade Union and Others v Minister of Health and Others [2026] ZACC 19 (18 May 2026) at paragraph 3.

[5] No. 20 of 2023.

[6] Section 35(1) of the National Health Insurance Act.

[7] Section 7(2)(e) of the National Health Insurance Act.

[8] Section 39(2)(c) of the National Health Insurance Act.

[9] Section 39(3) of the National Health Insurance Act.

[10] Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at paragraph 17.

[11] Solidarity Trade Union and Others v Minister of Health and Others [2026] ZACC 19 (18 May 2026) at paragraphs 57 and 78.

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As South African companies continue to suffer from an ailing economy, and where we are seeing an increasing number of companies filing for liquidation, there is no doubt that the role and impact of the Chief Restructuring Officer (CRO) cannot be ignored.

Recent statistics released by STATS SA, confirm that 233 companies were placed into liquidation in April of this year. In 2026 alone, 891 companies have met their demise through a liquidation process. The University of Stellenbosch’s Bureau for Economic Research (BER) reported this week that the business confidence index had dropped by eight percentage points directly attributable to the price cost impact brought about by the ongoing middle east conflict. According to BER, falling confidence is a warning signal that the economy is losing momentum.

The knee-jerk rush to file for a formal business rescue process needs to be carefully considered by the boards of stressed companies. Proper consideration should first be given to the appointment of a CRO as opposed to a business rescue practitioner. This allows a CRO to take a fresh look at the business and to offer effective turnaround strategies.

Of course it will always come down to ”horses for courses” as financial pressure on the entity might be too great, requiring an urgent filing for business rescue and where the benefit of a moratorium on claims against the company provides the required breathing space needed in the restructuring process. The default position is of course a filing for liquidation, which effectively ends the life of the company with subsequent job losses and cessation of trade.

But it takes a brave director to be able to recognize a decline of the company into the abyss of financial disaster. The last thing that would be high on the board’s agenda in a cash strapped entity would be to admit a potential slide towards business failure and where they would just hold up their hands and actively look for the outside assistance of an independent supervisor, such as a CRO.

Board members of failing companies need to accept that the slow slide towards financial distress is often as a consequence of their own limited management skills in being able to trade the entity out of its financial distress. Often the fear of failure and where directors, not used to making unpopular and difficult decisions, place themselves into a proverbial “rabbit in the headlight” scenario and which makes the need for the appointment of an independent turnaround consultant even more necessary.

The risk of personal liability and opening oneself up to scrutiny by creditors after the company has filed for insolvency, should persuade directors to engage a CRO as early as possible.

A CRO would have as an objective the restructuring of the affairs and business of the company, so as to ensure that the entity can continue to trade into the future on a solvent and effective basis. To do this, the CRO needs to remain independent and do his best to make the hard decisions for the commercial benefit of the operation. The achievement of stability, being able to trade profitably, without ongoing decline are the objectives for the CRO.

A restructuring led by a CRO is aimed at delivering an entity back into the market with its debt restructured, operational and financial changes having been made, with cash burn being reduced, with prejudicial contracts renegotiated, or terminated, and with management and employees realigned to upscale business profits and upside for shareholders and stakeholders. The objective must be to maximise the returns for lenders and creditors faced with the potential fallout of massive debt write offs in the event that these companies file for business rescue or liquidation.

In the recent RT Global CRO Study (March 2026), “The CRO in Transition – Restructuring that Creates (More) Value”, conducted together with the renowned IFUS-Institute in Europe, submissions were made in support of the CRO restructuring option. RT Global submitted that ” in many crisis situations, the CRO is still brought in as a “firefighter”, far too late, and in an environment already shaped by political dynamics, and with the CRO having limited decision-making authority.”

RT Global were of the view that “the CRO office, with clear governance and real executive authority, is becoming the international standard in restructuring. The CRO mandate determines whether restructuring remains an issue of damage control – or becomes a strategic leadership tool.”

In order for South African corporates to consider the clear advantages in appointing CRO’s in failing entities, it is clear that the CRO must be brought in as early as possible and prior to significant damage having impacted the business and its ability to trade out of decline. This requires a change in mindset and where directors and management need to be mature enough to recognize the need for intervention and supervision and to do so as early as possible.

CRO’s must be given clear and concise mandates and with the required milestones in place. Targets for the achievement of both operational and financial turnaround must be set up front, so that all stakeholders are on the same page from day one.

Realistic outcomes must happen within as short a timeframe as possible, so that the turnaround can be given the best possible chance to succeed.

For South African corporates, agility in distressed situations must be a top priority and particularly so in volatile and uncertain times. The appointment of a competent CRO, that has the ability to create stability and a workable turnaround for the company must bode well for distressed companies and for the South African economy.

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