Lekalake v EOH Mthombo (Pty) Ltd

The applicant, Mr Watson Kelemogile Lekalake, was a permanent SAP consultant employed by the respondent, EOH Mthombo (Pty) Ltd, following its acquisition of his previous employer. He was deployed to the Department of Water and Sanitation (DWS) within EOH’s Public Sector Division. In May 2019 he was removed from the DWS site after allegations of poor performance, which were never substantiated through appraisals or evidence. A contemplated poor performance process was postponed indefinitely. Shortly after returning to work following a CCMA conciliation, he was invited to consultations in terms of section 189 of the Labour Relations Act. EOH ultimately dismissed him for operational requirements, contending that it had no alternative position for him after the Public Sector Division lost government contracts and was closed. Evidence revealed that the real cause of the closure was serious allegations of corruption against senior EOH executives, leading to reputational damage and loss of public sector work.

The applicant’s dismissal was declared substantively unfair. He was retrospectively reinstated from the date of dismissal with full benefits and emoluments. The respondent was ordered to pay the applicant’s costs on an attorney-and-client scale. The applicant was directed to report for duty on 1 March 2025.

This judgment affirms that an employer cannot rely on reputational damage or corruption allegations against senior management as a legitimate operational requirement to justify retrenchment under section 189 of the LRA. It reinforces the principle that retrenchment must be based on a genuine, rational, and fair commercial rationale, and not on misconduct or wrongdoing unrelated to the employee. The case underscores the primacy of reinstatement as a remedy where operational-requirement dismissals are substantively unfair.