The labour court on Tuesday set aside the Passenger Rail Agency of SA’s (Prasa's) termination of employment contracts for two senior executives and a manager, who must be reinstated with immediate effect.

Martha Ngoye, group executive for legal risk and compliance, and Nkosinathi Khena, Prasa’s COO, received letters terminating their employment on January 29.

The letters were followed by a statement from Prasa on January 30 saying their employment contracts were terminated for having been in the employ of Prasa for more than five years, and that they ought to have left years ago.

According to the statement, the executives were employed for a period not exceeding five years, with no expectation of extension of the contracts. Prasa said the executives took advantage of instability at board level and stayed unlawfully for longer in the positions.

Prasa’s letters to Ngoye and Khena indicated its intention to institute legal proceedings to recover R58m from Ngoye and R24m from Khena.

The reason for the legal action relates to their approval of payments to external service providers without the requisite authority, the letters stated.

Tiro Holele received a letter terminating his employment as general manager of strategy on February 1. Holele was recalled from his CEO position at Autopax in March last year and was offered his current position at Prasa.  

The letter said his stay at Prasa had exceeded the normal fixed five-year contract extended to all executives. 

After receipt of the letters of termination, the three wrote to Prasa expressing discontent with their termination, which they viewed as unlawful.

They told Prasa they did not sign five-year fixed-term contracts. No reply was received from Prasa.

They asked the labour court to declare the termination of their contracts as unlawful and set them aside. They also sought reinstatement.

In a judgment passed on Tuesday, the labour court said upon the receipt of the termination letters, the three addressed letters to Prasa.

“Despite their contestations and reminders to [Prasa] that at no point did they enter into five-year fixed-term contracts, they never received any response from [Prasa],” the court said in its judgment.

The court said it was not denied the contracts of employment did not have expiry dates.

The court said Prasa elected not to produce documentation to support the decision to terminate the contracts.

Prasa was ordered to pay any salaries and benefits due to the three from the date on which their contracts of employment were terminated to the date of reinstatement.

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