The applicant and employer, Overnight Logistics, sought reconsideration of a decision by the Pension Funds Adjudicator (Adjudicator) dismissing its request to withhold a portion of the withdrawal benefit of its former employee, Simon Mayimela. The application was brought in terms of section 230(1) of the Financial Sector Regulation Act 9 of 2017.

Facts

Mayimela was employed by Overnight Logistics from July 2010 until November 2023 and was a member of the 10X Umbrella Provident Fund (Fund). In February 2023, Mayimela failed to follow routine instructions and safety procedures while operating a forklift and caused damage to company property.

A disciplinary inquiry was held in November 2023, where Mayimela was found guilty of (i) failing to carry out routine instructions and carelessness and (ii) not obeying routine instructions, which failure resulted in damage to property. As a consequence of the findings, Mayimela was summarily dismissed.

Following on from his dismissal, Overnight Logistics instituted proceedings against Mayimela, and obtained default judgment against him arising from the incident. Based on this, Overnight Logistics sought to withhold part of Mayimela’s pension benefit to recover the loss, and addressed a letter to the Fund seeking payment of Mayimela’s benefit.

The Fund declined Overnight Logistics’ request on the basis that the misconduct contemplated by section 37D(1)(b) of the Pension Funds Act required an element of dishonesty, with reference to the judgment in Moodley v Scottburgh/Umzinto North Local Transitional Council [2000] (4) SA 524 (D). The Fund averred that there was no element of dishonesty in the findings made against Mayimela.

Consequently, Overnight Logistics lodged a complaint with the Adjudicator.

On 28 March 2025, the Adjudicator held that while Mayimela was liable for payment of damages he caused to Overnight Logistics because of his gross negligence, the employer was not entitled to claim Mayimela’s pension benefit as it was protected by section 37A, and the damage caused to the employer was not because of theft, dishonesty, fraud or misconduct with an element of dishonesty, as contemplated by section 37D(1)(b)(ii)(bb) of the Pension Funds Act.

The Adjudicator dismissed the request, finding that the misconduct did not meet the threshold of dishonesty required under section 37D(1)(b)(ii)(bb) of the Pension Funds Act, and ordered the Fund to pay Mayimela his withdrawal benefit.

Following on from the Adjudicator’s finding, Overnight Logistics applied to the Tribunal for a reconsideration of the Adjudicator’s finding.

The Tribunal’s decision

The crux of Overnight Logistics’ submissions to the Tribunal was that section 37D(1)(b)(ii)(bb) of the Pension Funds Act does not require dishonesty as an element of misconduct.

Put differently, the issue for determination was whether the Adjudicator’s decision to uphold the Fund’s refusal to pay the withdrawal benefit to the employer was correct, in circumstances where Mayimela was found guilty of gross negligence and gross dereliction of duty, which contained no element of dishonesty. 

Ultimately, the Tribunal held that the requirement that misconduct, as set out in section 37D(1)(b)(ii)(bb) of the Pension Funds Act, must have an element of dishonesty has been consistently applied in our courts. In the present case, Mayimela was found guilty of having caused unintentional damage to property, and therefore his conduct did not meet the threshold contemplated by section 37D(1)(b)(ii)(bb).

Therefore, the Tribunal found that there was no reason to interfere with the Adjudicator’s decision. Accordingly, the Tribunal dismissed the reconsideration application. 

Conclusion

This decision reinforces the principle that pension benefits are sacrosanct and may only be interfered with in narrowly defined circumstances. In order to be entitled to proceed in terms of section 37D(1)(b)(ii)(bb) of the Pension Funds Act, employers will need to ensure that internal disciplinary findings are supported by clear evidence of dishonesty.