Mokhatla's decision was against the advice of her own legal adviser, the unit's external auditors and the auditor general.
Nyathi was sacked by former SIU head Willie Hofmeyr for refusing to take a lie detector test as part of an investigation into allegations of misconduct made against her. One of the conditions of SIU members' employment is that they must take lie detector tests.
After Hofmeyr was removed as SIU head, Mokhatla quickly reached a settlement with Nyathi.
In July, the Mail & Guardian reported that Mokhatla's decision to reinstate Nyathi – with back pay and a performance bonus – was contrary to the advice of the two advocates representing the unit in the case against her. In a May 16 memorandum advocates Tim Bruinders and Karensa Millard wrote: "We advised that the settlement was imprudent and unlawful and recommended against settlement of the dispute with Nyathi."
Correspondence seen by the M&G shows that Mokhatla has subsequently:
- Overruled advice from her own legal adviser and the SIU's external auditors that the reinstatement was improper; and
- Has taken the extraordinary step of personally writing to the auditor general to reject a management letter that also queried the basis of the reinstatement.
The correspondence shows that acting SIU chief financial officer Garth Elliot called in the unit's auditors, PwC, to provide advice about whether the reinstatement could be justified in terms of the requirements of the Public Finance Management Act.
The June 27 PwC report reveals that the unit's in-house legal adviser, advocate Bobby Walser, believed that the unit was still obliged to investigate the allegations of timesheet fraud, amounting to about R70 000, by Nyathi, which had been raised under Hofmeyr's tenure.
Walser also believed that the decision to reinstate Nyathi contrary to legal advice amounted to an allegation of financial misconduct, which should have been referred to the unit's audit committee.
PwC concurred with this view, advising that an investigation of Nyathi's possible financial misconduct should be conducted and the decision to ignore legal advice should be referred to the SIU's executive authority for investigation.
The auditor general also questioned the reinstatement.
In a draft audit finding directed to Elliot on July 20, auditor Xolile Ntuli wrote: "It is not clear on what grounds she was reinstated. From the Labour Court ruling, the legal opinion obtained from Edward Nathan Sonnenbergs and the memo prepared by Bruinders and Millard, it appears that the SIU did have legal grounds to terminate the contract [of] employment [for] her."
The auditor general's report also questions the R913 000 settlement agreement.
"It appears that it was highly unlikely that any court of law would have ordered [her] reinstatement."
In response Mokhatla went on the offensive. An SIU source said: "In this instance, the whole of the exco [executive committee] met the AG [auditor general] team and explicitly explained that the initial report finding cannot be left in, as it was more of a legal opinion than an audit finding. It was clearly indicated to the AG that their initial report must be taken out, but a briefing note would be drawn up by Mokhatla on the reasons for Nyathi's reinstatement to replace it."
Mokhatla's final brief was submitted to the auditor general on September 5. It stated she had accepted the claim that Nyathi was subject to a witch-hunt and wrote: "Mrs Nyathi was called under false pretences to be served with a suspension letter … It is at this time that her private laptop was requested.
"Mrs Nyathi is alleged to have authored a letter calling, among other things, for the former head of the unit, Mr Willie Hofmeyr, to resign. The cyber tests … into Mrs Nyathi's official laptop never proved that the letter was authored by her … The SIU still insisted that she undergo a polygraph test. She refused and remained on suspension."
A subsequent Labour Court ruling found procedural lapses in how the unit had handled the disciplinary process, but ruled that Nyathi's refusal to undergo the lie test was a breach of her contract, justifying her dismissal.
Mokhatla disagreed: "I applied my mind to the matter and I was not satisfied that there were reasonable grounds to insist on a polygraph test. I was accordingly not convinced that her subsequent failure to do the polygraph test amounted to a material breach of her employment contract."
Mokhatla stated that Nyathi gave as reasons for refusing to undergo a polygraph test that the "integrity of the test is questionable" and it could be manipulated, given that the unit was "bent towards getting rid of her".
Mokhatla also stated that the unit's entry and exit logs, which formed the basis of querying Nyathi's overtime claims, "could not be relied on to show the exact hours that Mrs Nyathi spent at work".
Responding to questions, the auditor general said it could not comment on its audits or reports until they had been tabled in Parliament.
The SIU denied that Mokhatla ignored advice "during the process of reviewing Nyathi's matter".
Spokesperson Boy Ndala added: "We will give full support and cooperation to the AG if it wants to investigate the reinstatement."
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