When employees are found to have misrepresented their expertise, skills and qualifications the employer, in such circumstances, often adopts the approach of convening a disciplinary enquiry and subsequently dismissing the employee. However, this process is not the only approach available to employers as employers may approach the High Court to recover damages they have suffered as a result of the fraudulent misrepresentation.

In the recent unreported case of Passenger Rail Agency South Africa v Mshushisi Daniel Mthimkhulu (42056/2015 dated 23 September 2019), the High Court ordered a former senior employee of PRASA to pay damages to PRASA as a consequence of fraudulent misrepresentations made by him.

During the course of 2010,  the employee had made several fraudulent misrepresentations to PRASA. He contended that he, inter alia, possessed a national diploma and a bachelor’s degree from a South African university and as such these qualifications made him a suitable candidate to be appointed to the senior position of executive manager in the engineering services department of PRASA. As a result of the fraudulent misrepresentations, PRASA was induced to appoint the employee to the senior position.

The employee made further fraudulent misrepresentations to PRASA as he alleged that he had been awarded a doctorate by a German university and furthermore that he had received a lucrative job offer from a German company at a higher salary. As a consequence, PRASA changed the employee’s appellation to that of a “Doctor” and made the employee a counter-offer which substantially increased his salary.

During the trial, the employee denied that he had made fraudulent misrepresentations to PRASA and instead contended that he “grew organically through the ranks” of PRASA. The employee further stated that there was a conspiracy to destroy his career and that he had become “the sacrificial lamb to appease other people”.

As a result of the fraudulent misrepresentations, PRASA suffered substantial losses because the employee was remunerated at a level far higher than he would have been, had it not been for the fraudulent misrepresentations. In order to recover those amounts, PRASA instituted a delictual action for damages against the employee.

In evaluating the evidence before it the High Court found, inter alia, that PRASA had adduced evidence in order to prove the necessary elements of a delictual cause of action of fraudulent misrepresentation in that the employee made fraudulent misrepresentations to PRASA and PRASA relied on those fraudulent misrepresentations. In particular, the High Court found that PRASA was induced to appoint the employee to the senior position of an executive manager based on the fraudulent misrepresentation made by him. It also found that PRASA was induced to increase the employee’s salary based on the fraudulent misrepresentation made that he, inter alia, had been awarded a doctorate and had received a lucrative job offer from a German Company.

In quantifying its damages PRASA established that it had suffered patrimonial losses as a result of the employee’s misconduct, at the very least in the amount of R5 771 854.93. Accordingly, the High Court awarded PRASA damages in the amount of R5 771 854.93.

The increase in the numbers of fraudulent qualifications presented by employees is evident from the enactment of the NQF Amendment Act which seeks to deal precisely with this issue. In light of the increasing number of fraudulent qualifications being uncovered, it is important for employers and other members of society to ensure that employees who engage in such unlawful conduct are held accountable in the appropriate forum.

Employers should, however, perform proper background checks on candidates for employment to ensure that they don’t employ fraudsters. Where these fraudsters manage to find their way into an organisation, the employer should play its part in holding them to account for their criminal conduct.