In October 2025, the Labour court concluded that the broker that serviced high profile wealth clients had reasonable reasons for dismissal of a wealth manager and that the employee’s explanation for her misconduct was unacceptable. The court explained that the arbitrator should have considered what was reasonable and fair for an employer in the applicant’s position, rather than deciding what the arbitrator personally thought was a fair reason for dismissal.
The applicant, a short-term insurance broker and financial services provider licensed under the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act), dismissed the employee, who was employed by the broker as a “wealth insurance manager”, for negligence and misconduct in fulfilling her duties. The employee referred her matter to the Commission for Conciliation, Mediation and Arbitration (CCMA), arguing that she was unfairly dismissed.
It was not disputed that the employee was guilty of the alleged misconduct. For example, she failed to manage renewals for several client policies, which went against her duties as a FAIS representative. Despite this, the CCMA arbitrator found in favour of the employee. The broker appealed the decision to the Labour Court to review the CCMA decision.
The CCMA arbitrator decided that negligence, as opposed to gross negligence, was not serious enough to justify dismissal. He considered the harm to the broker to be only reputational and potential since no formal complaints had been made by clients or regulators. The arbitrator also noted that there was no written policy outlining the employee’s duties. He considered her long service and the fact that her final written warning had expired, concluding that she could be rehabilitated and that the trust between employer and employee was only slightly damaged.
The Labour Court disagreed with the arbitrator’s findings, stating that the arbitrator had made significant errors of law. The court emphasised that failing to comply with FAIS Requirements has serious consequences for the applicant. The FAIS Regulator can impose penalties ranging from fines to suspending or cancelling the applicant’s operating licence. Compliance is therefore a critical regulatory issue, not just an internal company rule. The court found that focusing on the difference between “negligence” and “gross negligence” was overly formalistic and simplistic. Based on the undisputed facts, the employee’s actions were a significant breach of her responsibilities under the FAIS Act. Furthermore, the employee did not see her failure to perform her regulatory duties as a problem, explaining that the system would automatically renew policies. However, the one-on-one client renewal process she ignored is specifically required to prevent automatic renewals, which would breach the relevant FAIS Code.
Therefore, the dismissal was fair, and the arbitrator’s decision was set aside.