Weaponising the Public Finance Management Act: A new legal trend threatening public sector discipline

Daily Maverick

2 days ago

A concerning trend is emerging in public sector employment. Employees facing disciplinary action are increasingly wielding the Public Finance Management Act 1 of 1999 (PFMA) not as the accountability tool it was designed to be, but as a shield against workplace consequences.
This strategic pivot transforms financial governance legislation into an employment litigation weapon with potentially far-reaching implications for public administration.
The PFMA was enacted in 1999 with the primary purpose of establishing a robust framework for financial governance in South Africa's public sector. At its core, the act aims to secure transparency, accountability, and sound management of revenue, expenditure, assets and liabilities across national and provincial government institutions.
Among its core objectives, it provides mechanisms to prevent irregular, unauthorised, as well as fruitless and wasteful expenditure, thereby safeguarding public resources against misuse.
The recent Labour Court case of Vico v The Department of Forestry, Fisheries and Environment offers a compelling illustration of this new phenomenon. Thembalethu Vico, a director within the department who faced dismissal following disciplinary proceedings related to the removal of confiscated abalone valued at approximately R7.5-million, sought to challenge his dismissal through an unusual legal avenue: by attacking the procedural aspects of his disciplinary hearing through the lens of the PFMA.
At the heart of Vico's application was an attempt to secure declaratory relief related to what he characterised as incomplete disciplinary proceedings.
His arguments centred on several PFMA-related assertions: that the employer had 'unjustly and unfairly terminated' the briefing contract of the disciplinary hearing chairperson; that this termination caused 'unreasonable delay' in his disciplinary hearing; that respondents 'contravened the applicant's right to fair labour practice'; and rather notably, that expenditure on recusal applications against the chairperson constituted 'fruitless and wasteful expenditure' under the PFMA.
The Labour Court's response was unequivocal. In his judgment, Judge Robert Lagrange not only dismissed the application, but characterised it as 'vexatious in nature', ordering the applicant to pay the respondents' costs.
'An attempt to circumvent the proper forums for labour disputes'
The court found that Vico was 'no stranger to legal principles and reasoning' and determined that his PFMA-based arguments represented an attempt to circumvent the proper forums for labour disputes — namely the General Public Service Sectoral Bargaining Council where he had already lodged an unfair dismissal claim.
This case highlights a broader issue deserving closer scrutiny: the strategic repurposing of financial management legislation to serve employment law objectives.
The PFMA, enacted in 1999, was designed to promote transparent and effective management of government finances — not as a mechanism for employees to challenge disciplinary outcomes. Yet increasingly, we witness creative legal arguments that stretch the PFMA beyond its intended boundaries.
Several notable examples demonstrate this concerning pattern in other contextual scenarios:
Unsuccessful tender bidders increasingly invoke the PFMA not to address genuine financial irregularities, but to contest legitimate procurement decisions they simply disagree with. By alleging technical PFMA violations, these bidders attempt to overturn procurement outcomes through financial management legislation rather than following appropriate procurement appeal processes.
Some employees facing disciplinary action for performance or conduct issues have strategically repositioned themselves as 'whistleblowers' under section 51 of the PFMA. By claiming they were disciplined for reporting financial misconduct, rather than for their own workplace infractions, they attempt to transform standard employment disputes into protected disclosure matters.
Some senior employees facing poor performance reviews have contested their evaluations by claiming they were instructed to take actions that would violate the PFMA. This transforms performance management into a complex legal dispute about financial legislation interpretation.
Public entities facing pressure to implement organisational changes have cited PFMA compliance concerns as reasons to delay implementation, effectively using financial legislation as a strategic tool to resist operational reforms.
Perhaps most troublingly, the PFMA has become weaponised in political contexts, with allegations of technical PFMA violations used to undermine political opponents in positions of financial accountability, regardless of whether actual financial mismanagement occurred.
In the misconduct context, the implications of this trend are significant. Public sector managers face the daunting prospect of defending not only the substantive merits of disciplinary decisions, but also navigating complex arguments about whether their internal processes satisfy the technical requirements of financial legislation.
This creates a chilling effect on departmental decision-making, potentially undermining efforts to address misconduct effectively.
More worryingly, this legal strategy diverts valuable court resources. Judge Lagrange noted that the application was largely an attempt to revisit a matter that had already been decided, writing that 'it beggars belief that the applicant could have seriously believed that he could simply avoid the unequivocal effect of the judgment by approaching this court under the guise of an application for declaratory relief'.
When courts must attend to such applications, genuine cases requiring judicial attention face delays.
The Department of Forestry, Fisheries and the Environment's approach in the Vico case provides a template for addressing such claims. Rather than becoming entangled in debates about the PFMA's application to employment matters, they successfully redirected the court's attention to the jurisdictional question: Whether the Labour Court was the appropriate forum for what was essentially an attempt to relitigate disciplinary proceedings through a different legal framework.
Distinct forums and remedies
PFMA matters and employment disputes are meant to follow different procedural paths, with distinct forums and remedies designed to preserve the integrity of both systems.
When properly invoked, PFMA concerns should follow established channels that begin with internal departmental controls, escalate to Treasury oversight, proceed through audit mechanisms via the Auditor-General's examination, involve executive accountability and operate through specific financial misconduct procedures established in the PFMA — all pathways that exist distinctly from labour dispute mechanisms.
Notably absent from the PFMA is any provision making the Labour Court a forum for adjudicating PFMA violations, which is why the Department of Forestry, Fisheries and the Environment correctly focused on the jurisdictional question, highlighting that the applicant was attempting to bypass proper forums for both employment disputes (the General Public Service Sectoral Bargaining Council) and financial governance concerns (internal controls, Treasury oversight and potentially criminal proceedings).
As this trend continues to evolve, public sector employers would be wise to develop proactive strategies. This includes ensuring that disciplinary procedures are documented with meticulous attention to detail, that financial decisions related to such proceedings are properly authorised, and that legal teams are prepared to address PFMA-based arguments directly.
The PFMA represents a crucial pillar of democratic governance and institutional transformation. The act has become instrumental in the country's ongoing struggle against corruption and State Capture — challenges that have threatened South Africa's democratic foundations and economic stability.
However, the judiciary's response in the Vico case sends a clear message: the PFMA cannot be weaponised to circumvent established labour relations processes. This judgment establishes an important precedent that may discourage frivolous applications of this nature.
Ultimately, public administration requires both financial accountability and efficient personnel management. When these systems are placed in artificial opposition through creative litigation strategies, neither objective is well served.
The Labour Court's firm stance in the Vico case represents a welcome correction — one that reinforces the proper boundaries between financial governance and employment law in South Africa's public sector. DM