This morning, Knysna Tourism released detailed charges and the findings of the disciplinary inquiry against Shaun van Eck, the recently ‘terminated’ CEO of Knysna Tourism. It is a highly disturbing read featuring a man who seemed to run Knysna Tourism as his own business. The consequence is a huge financial loss to Knysna and lessens our ability to market ourselves fully in 2013.
What isn’t mentioned below is that Shaun also used up the R2 million surplus that Tourism had boasted about up until 2011. I have much more to say on this matter so check back into this blog this evening when we can summarize the charges, chat about accountability and discuss rumours that, if found true, will add a new bizarre dimension to this ugly mess. Undoubtedly, Shaun van Eck screwed Knysna but he is not the only one deserving blame – the Tourism Board, local media (especially the Knysna-Plett Herald), Knysna Municipality and the DA have questions to answer too.
HELD AT KNYSNA ON 2, 4, 9 AND 10 NOVEMBER 2012
SUBMISSIONS IN RELATION TO SANCTION 28 NOVEMBER 2012
KNYSNA TOURISM: EMPLOYER (“KT”) and SHAUN VAN ECK: EMPLOYEE (“Shaun”)
THE LEGAL POSITION
In considering an appropriate sanction the principles applicable have been dealt with by the various Courts in South Africa in numerous decisions. The principles can be summarized as follows:
- The presiding officer must consider the totality of circumstances and all the relevant factors.
- The importance of the rule or rules that were breached.
- The harm caused by the employee’s conduct.
- Whether additional training and instruction may result in the employee not repeating the misconduct.
- The effect of the dismissal on the employee.
- The employee’s service record.
These are merely guidelines and clearly every matter should be determined on its own facts.
- Fidelity Cash Management Service v CCMA and others (2008) 29 ILJ 964 (LAC)
- “Determining and Reviewing Sanction after Sidumo” Anton Myburg * ILJ (2010) 31 1
THE ALLEGATIONS AND FINDINGS
- The allegations and findings have already been dealt with in my findings dated 16 November 2012 and will not be repeated here.
- The charges which Shaun has been found guilty of are serious in nature. Shaun was appointed in a very responsible position as CEO of Knysna Tourism. It is important to bear in mind, that 70% of Knysna Tourism’s budget is provided for by the Municipality and constitutes public money. The balance of the funding is provided by members contributions. Importantly the money which supports this organization is not Shaun’s own money.
- Shaun was found guilty of various sub charges of gross misconduct relating to poor corporate governance. Shaun as an experienced CEO, should have realised that it would be of the utmost importance to ensure that proper structures are in place to ensure that meticulous accounting is given at all times of moneys spent by this organization. This he failed to do.
- The only board member who would continuously serve on all boards, was Shaun.
- It would have been simple good commercial practice to ensure that proper agreements were in place for every single event and festival that was sponsored by KT. This Shaun did not do. Shaun’s explanation that he trusted the beneficiaries of the funding is simply unacceptable and bad commercial practice.
- This method of doing business, resulted in KT not knowing which creditors were outstanding at any particularly time. This obviously had a seriously negative effect on the cash flow of KT.
- Having regard to Shaun’s previous experience in Tourism, it is inexplicable that the financial aspects of KT were not dealt with in a responsible and formal manner.
- I do take into account that previous boards may have allowed a certain amount of latitude to Shaun in managing the affairs of KT. However when he received a direct instruction in March of 2012 to provide a list of delegations, he should have made immediate work of that. To simply ague that KT did not have the capacity to draft such a document is not acceptable.
- The poor financial management of KT resulted in rolling of creditors. I do take into account in Shaun’s favour that the budget cut from the Knysna Municipality must have had an effect on the finance of KT. However as a responsible CEO, he should have made adjustments immediately to ensure that the organization operate at all times within its budget. Even more so, he should have brought the deficit to the attention of the board, his employer, immediately. This he did not do.
- From the evidence it appeared almost as if Shaun ran KT [Knysna Tourism] as his own business. It is difficult to understand how Shaun could make a decision to send an employee on an expensive trip to Jamaica even if Shaun believed that the experience gained by the employee would be to the benefit of KT. Having regard to the amount of money involved, one would have expected Shaun to first clear this decision with his employer, the board. This Shaun did not do. It is indicative of the fact that Shaun knew that this trip was out of order, in that when questioned about this trip by the board at the Golf Club, Shaun mislead the board members by indicating that this trip was a sponsored trip when it was not so. This action of Shaun is grossly dishonest.
- I have already dealt with the fact that the majority of funding for KT constitutes public funding. There is simply no basis for Shaun to assume that he would have the authority to extend credit on behalf of this organization. Even if he mistakenly believed that he had that authority, the moment the Lightley’s situation became serious, and he was warned about it by Ruth and Ms Brooker, he should have brought this situation to the attention of the board, his employer and ask for their guidance in this matter. Shaun did not reveal to the board the extent of the Lightley’s debt until it was too late and Lightley’s was liquidated. This resulted in serious financial loss for the organization. Clearly this conduct of Shaun was grossly negligent.
- For a period of 13 months, because the organization could not complete a simple task such as arranging for proper signatures with the bank, Shaun ran the petty cash through his own account, on one occasion up to an amount R 30 000.00 which still has not been reconciled. This is a grossly negligent practice.
- The non-payment of creditors reflected badly on KT, and also on its major funder, the Knysna Municipality.
- Taking the totality of the charges in to consideration Shaun has been found guilty of gross misconduct, gross dishonesty, gross negligence and gross insubordination.
RELATIONSHIP OF TRUST
It is trite that in determining an appropriate sanction one must consider whether the relationship of trust between employer and employee has been destroyed to such an extent that it cannot be repaired. If that is the case, then clearly no employment relationship can be possible.
On behalf of the employer both the chairperson of the board Greg Vogt and a board member representing the municipality and major funder of this organization, Michelle Wasserman testified that they would no longer be able to trust Shaun. Having regard to the evidence presented, and the findings above, their attitude is not surprising.
Throughout the disciplinary hearing, the antagonism that Shaun felt towards his employer and the various people representing his employer was obvious. The record will reflect this. Even more disturbingly though, in Shaun’s closing argument addressed to me Shaun made the following accusations against his employer:
- He accused the first chairman of the board of being disinterested and being absent. He accused the current chairman of the board of regularly changing his relationship with colleagues from supportive and enthusiastic to looking down on them. He accused the current chairman of the board of verbally abusing him and bullying him.
- He accused the current chairman of the board of defaming his name. He accused the current chairman of driving his inexperienced board in to this ill-considered and procedurally incorrect process (this is Shaun’s view of the process).
- He accused the current chairman of the board of single-mindedly plotting Shaun’s down fall.
- He accused the current chairman of the board of not having the interests of Knysna Tourism or the town at heart.
- Shaun accused the board members in general of deliberately defaming his reputation.
- He accused the board members in general of deliberately lying to the board. He accused the board members in general of manipulating the process.
- He accused the board members of being guilty of ethically unacceptable behaviour.
- He accused the deputy chairman of the board of not having the necessary level of knowledge to be able to operate in her position.
- Shaun accused the chairman of the board of lying on various occasions in his interactions with himself and also of condoning serious lies allegedly perpetrated by various board members.
- Shaun considered a board member, Michelle Wasserman to be party to lying to the board.
- Shaun accused Ms Casti, an independent accountant of adapting her evidence to please her current paymaster the board.
- It needs to be born in mind that the above allegations are being made by an employee towards his employer. It is abundantly clear from Shaun’s conduct throughout the disciplinary hearing, as well as his submissions discussed above, that apart from the views of the board his employer, the relationship of trust from Shaun’s side as employee has broken down completely. No other conclusion is possible.
It is important to consider the essential ingredients of the employment relationship. In this regard I refer to:
“It is an implied term of the contract of employment that the employee will act with good faith towards his employer and that he wil serve his employer honestly and faithfully: Pearce v Foster & others (1886) QB 356 at 359; Robb v Green (1895) 2 QB 1 at 10; Robb v Green (1895) 2 QB 315 (CA) at 317; Gerry Bower Motors (Pty) Ltd v Preller 1940 TPD 130 at 133; Premier Medical & Industrial Equipment LtdWinkler & others 1971 (3) SA 866 (W) at 867H. The relationship between employer and employee has been described as a confidential one (Robb v Green (CA) at 319). The duty which an employee owes his employer is a fiduciary one “which involves an obligation not to work against his master’s interests” (Premier Medical & Industrial Equipment Ltd v Winkler at 867H; Jones v East Rand Extension Gold Mining Co Ltd 1917 TH 325 at 334). If an employee does “…anything incompatible with the due or faithful discharge of his duty to his master, the latter has a right to dismiss him”: Pearce v Foster at 359”.
Although some of the principles have been adapted to modern employment law, the core of the values set out above is still applicable in the modern employment relationship.
SUBMISSIONS ON BEHALF OF THE EMPLOYER
The employer submitted written argument and it will not repeated here.
- In essence the employer argued that Shaun has shown no remorse nor insight into his wrongdoings. Corrective action is therefore not an option.
- The trust relationship has broken down totally and continued employment is impossible.
SUBMISSIONS ON BEHALF OF THE EMPLOYEE
Shaun submitted written argument and it will not be repeated here. His submissions mostly dealt with his view of the merits of the allegations as well as numerous allegations against the Board, and various individuals involved in the disciplinary process.
I take into account on Shaun’s behalf that he is 53 years old, married, and that his wife is currently not employed. He has four children respectively at high school and university. Up to the start of these proceedings he had a clean disciplinary record.
The charges that Shaun has been found guilty of are serious in nature. It is abundantly clear that Shaun has no insight into the gravity of his actions and the serious consequences this had for his employer. Shaun has shown no remorse and clearly is not prepared to change his ways. Corrective action can therefore not be considered.
There is no doubt that the employment relationship between Shaun and KT has been destroyed completely. This, in my view and based on the evidence presented at the hearing as well as Shaun’s conduct during the proceedings, is entirely due to Shaun’s own actions.
My recommendation to the Board is that Shaun’s employment be terminated with or without notice.
Dated at George on 30 November 2012
I have the strong feeling that this is the tip of the iceberg. Until we chat later today, i hope that my readers absorb the gravity of all this; the impact it has on each and every one of our lives. I hope that my many silent readers will share their comments below. Problems we admit to, we can fix. Problems we share, we can fix quicker.
PS: For further reading, download the Evaluation Findings.