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KING III

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The King Report on Governance for South Africa 2009 (King III), which was released on 1 September 2009, provides a list of best practice principles to assist and guide directors in Corporate Governance.

King III applies to all corporate entities regardless of the manner incorporation, whether in the public, private sectors or non-profit sectors.

It is expected that the new Companies’ Act will become operative on 1 July 2010. The King III report will be effective from 1 March 2010.

Key aspects of the Report:

There are 4 concepts that are absolutely brand new being:

  1. King III recommendations apply to all corporate entities on an “apply or explain” basis
  2. Information Technology Governance (Workshops on compliance and governance to be held by Shoden Academy)
  3. Business Rescue (Rescue recommendations for economically viable companies in financial difficulties)
  4. Fundamental and Affected transactions (mergers acquisitions amalgamations)

Emerging trends in the King III report:

  1. ADR or Alternative Dispute Resolution (mediation, conciliation arbitration)
  2. Risk-based internal audit
  3. Shareholder approval for Non-Exec remuneration
  4. Evaluation of directors and Board performance
  5. Integrated Reports
  6. Sustainability and Integration of People, Planet Profit or put another way, Social, Environmental and Economic principles
  7. The Inclusive Stakeholder approach (not just serving shareholders)

Of interest are that these and other recommendations are applicable to all companies and not only listed companies. Other corporate entities will now also have to consider applying the Codes in areas like:

  1. Composition of the Board (majority independent non-executive directors)
  2. Duties of Chairperson and CEO clarified
  3. Audit Committees
  4. Governance of Risk

Some new issues in the report:

  • Information technology governance
  • Composition of the board,
  • Duties of the chairperson and the CEO
  • Remuneration of directors
  • Performance assessment of directors
  • Alternative dispute resolution and stakeholder relationships
  • Integrated reporting and disclosure
  • Audit committees
  • The governance of risk
  • Compliance with laws, rules, codes and standards

    STRAUTMANN V SILVER MEADOWS TRADING 99 (PTY) LTD T/A MUGG AND BEAN SUNCOAST AND OTHERS

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    Case Number: D 412/07

    Judgment Date: 09 June 2009

    Jurisdiction: Labour Court, Durban

    Judge: Van Niekerk J

    Subject: Review

    CCMA Arbitration

    Issue: Certificate of outcome did not constitute a jurisdictional ruling.

    Summary of Facts: The employee was employed by Kishara CC t/a Mugg and Bean Suncoast as a general manager and was also a member of the CC. After a disagreement between the members of the CC, the business (Mugg and Bean Suncoast) was sold as a going concern to Silver Meadows Trading 99 (first Respondent), the new Employer. The employee referred a dispute to the CCMA alleging he had been constructively dismissed, because the new employer had declined to offer him employment as before. The employee never resigned. At conciliation the dispute remained unresolved, and the commissioner indicated the nature of the dispute as ‘unfair dismissal’ – section 197 and section 187(1)(g) of the LRA and indicated that the dispute should be referred to the LC. The employee contended that his dismissal was not an automatically unfair dismissal and the matter was set down for arbitration. The arbitrating commissioner ruled that the CCMA was functus officio.  It did not have jurisdiction to arbitrate and the matter could only be referred to the LC.

    Summary of Judgment: The court held that applicable principle in this case was that a referring party was not bound by a commissioner’s classification of a dispute or any directive as to its destiny. If this were not so and if some legal significance were to be attached to a commissioner’s categorisation of a dispute in a certificate of outcome, then by electing the forum in which the dispute is to be determined, the commissioner could deny the referring party the freedom to pursue her rights as she deemed fit.  Certificates of outcome are issued without evidence regarding nature of the dispute. The court was of the view that the conciliating commissioner is not always well-placed to make judgments, based only on the say-so of parties during conciliation. Consequently the certificate of outcome should not be binding on the referring party.  In light of the above the court held the certificate of outcome did not amount to a jurisdictional ruling.  The ruling that the parties were bound by the certificate of outcome was grossly irregular and not a conclusion a reasonable decision maker could come to.  The commissioner’s ruling that the CCMA was functus officio was reviewed and set aside and the matter was remitted to the CCMA for an arbitration hearing de novo.

    SCHEME DATA SERVICES (PTY) LTD V MYHILL N.O & CCMA & OTHER

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    Case No. JR 1456/06

    Judgement Date: 05 December 2008

    Jurisdiction: Labour Court, Johannesburg

    Judge: Ngalwana J

    Subject: Unfair Dismissal :Procedural fairness of dismissal: Jurisdiction

    Issue: Application to review and set aside decision of commissioner in arbitration. Commissioner had held dismissal of employee to be substantially and procedurally unfair.

    Facts: Employee’s employment was terminated for operational reasons after ten years of service.  Employee referred dismissal to CCMA claiming that it was procedurally unfair, as he had not been consulted with regarding alternative employment to avoid retrenchment.  The commissioner held the dismissal to be procedurally as well as substantially unfair.  The Employer contended in the Labour Court that the Commissioner lacked jurisdiction to arbitrate the matter based on the judgement in Rand Water v Bracks NO and Others where it was held that only the Labour Court had jurisdiction in respect of procedural fairness in dismissals based on operational requirements.

    Judgement: The court held that the Rand Water Judgement was clearly wrong in law. This Judgement was based on a statutory interpretation driven by a desire to spare CCMA Commissioners the headache or challenge of dealing with complexities arising from procedural issues. However, there was nothing in LRA which suggested that the determination of procedural fairness in s 189 dismissals was more complex than substantive fairness issues. The court held that an employee who was dismissed for operational reasons was free to refer the dispute whether founded on procedural or substantive fairness either to CCMA or Labour Court. It is for the legislature, and not the courts to decide where individual employees dismissed on operational requirements should refer disputes. The LRA gives employees a choice. The LRA has as it’s purpose to ensure that employment related disputes should be conciliated and arbitrated by CCMA with minimum legal formalities. Such disputes must be resolved expeditiously, equitably and with minimum fuss Consequently the court held that the Commissioner had jurisdiction to arbitrate the dispute. The court held that, in this case, the Employer had not consulted with the employee regarding alternative positions.  The employee had not waived her right to an alternative position because she had never been made aware that there was one. The employee might have accepted alternative position if it had been presented to her. Therefore the retrenchment was procedurally unfair. The application was dismissed with costs.

    HARLEY V BACARAC TRADING 39 (PTY) LTD

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    Case Number: J 2543 / 08

    Judgment Date: 23 March 2009

    Jurisdiction: Labour Court, Braamfontein

    Judge: Van Niekerk J

    Subject: Suspension without Pay

    Issue: Urgent application to declare employee’s continued unpaid suspension unfair and to order the Employer to pay his remuneration.

    Summary of Facts: The employee was a Technical Director at a salary of R40 000.00 per month.  He had purchased 30 shares in the company from existing shareholders in the company for R1.8 million.  On signature the employee was to pay R500 000 in part payment of the shares.  This agreement contained a clause to the effect that, should the employment of any shareholder be terminated on a count of misconduct, that party would be obliged to dispense his shareholding to other shareholders for no purchase consideration.  On 24 July 2008 the employee was advised by the auditor of the company that the Employer demanded his immediate resignation.  The Employer also offered to purchase his shares at this time for an amount of R300 000, which was to include R120 000 in arrears salaries.  The Employee refused to resign and on 30 July 2008 he was suspended pending an investigation.  On 1 August 2008 the Employer advised creditors that the Employee was no longer employed by the company.  A disciplinary enquiry was convened on 26 August 2008 and postponed to 08 September 2008 and eventually started on 22 September 2008.  On 29 September 2008 the employee was found guilty on three of the seventeen charges of misconduct brought against him. On 07 October 2008 the employee filed an application in LC (this court) for an order declaring the employer to be in breach of its contractual obligations and failing to pay him the remuneration that he had not received for 2 months.  He also claimed that his suspension was unfair. The day after application to declare the suspension unfair was lodged, the employer dismissed the employee with immediate effect.

    Summary of Judgment: The employer argued that financial hardship and loss of income can never be grounds for urgency.  The court held that each case must be assessed on it own merits, and that an application should not be refused only on this basis.  The court has a wide discretion to determine the urgency with which application should be treated.  Regarding the non-payment of remuneration, the court held that it was not persuaded that the employee did not have the right to receive monthly remuneration of R40 000.00.    The court further held that that, where suspension was effected as a measure pending a disciplinary hearing, suspension without pay was a material breach of contract. In the absence of any apparent apprehension that the employee’s continued presence in the workplace prejudiced a legitimate business interest, the suspension was also held to be unfair.   It was clear that the dismissal had been a direct response to employee launching his application in the Labour Court and, far from being academic, it smacked of an act of victimisation.  The court was satisfied that the employee had made out a case for the relief he sought and made an order declaring the suspension to be unlawful.  It also ordered the Employer to pay the employee his remuneration for the months of his suspension as well as costs.

    Potgieter V National Commissioner of SAPS and one other

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    Issue: Unfair discrimination claim arising from sexual harassment or victimization of employee by employer.  Court must determine the liability of the employer arising from the conduct of its employee. In doing so the court had to determine whether the employer should have taken further steps to address the complaint of sexual harassment. The court held that the employer acted appropriately and that not every complaint of sexual harassment would involve a dismissal. The application was dismissed.

    Summary of Facts: Employee (Mrs Potgieter), the former data processing clerk of the employee, was sexually harassed by another employee, (Constable Mafodi) of the employer (National Commissioner of SAPS) and this incident occurred at the workplace and during working hours. The employee reported these instances to her employer, the most severe incident being that “he tried to kiss her”. She reported the incident to a Captain Swanepoel, who insisted that she make a statement to the effect. The employee alleged that there was a lack of progress and repeatedly approached Swanepoel in this regard. The employee alleged that when doing so, he victimized and ridiculed her. She also alleged that she was requested to withdraw the charges, by a certain Reddy and on refusing to do so she was loaded with work and her maternity leave form was not signed. A disciplinary enquiry was held where Mafodi was charged and found guilty of sexually harassing the employee and was fined R600 half of which was suspended, in terms of the employer’s disciplinary regulations. Mafodi was not suspended and the employee was transferred to another department on the request of herself and a social worker. The social worker’s report indicated that Swanepoel had not kept the matter confidential, and in response to this he was given a written warning. She resigned from the place she had been transferred to, due to one of the employee’s encouraging her to have an affair with a certain member of the public, this however remained unreported. The employee contended the following: dealing with Mafodi had been delayed, her complaint was not kept confidential, Mafodi was not removed from the work place, the sanction imposed was too lenient, Swanepoel called her names which had sexual connotations and she was not timeously referred for assistance. Her complaint in essence was that the employer had failed to comply without its own policy.

    Summary of Judgment: The issue for determination was whether the employer was liable for the conduct of its employee (Mafodi). Section 60 of the EEA sets out certain requirements which must be met before liability can be established, namely whether: 1)sexual harassment was committed by another employee; 2)sexual harassment must constitute unfair discrimination; 3)must take place at workplace; 4)incident immediately brought to attention of employer; 5)employer aware of incident and employer failed to consult all relevant parties or take necessary steps to eliminate conduct and 6)employer failed to take all reasonable and practical measures to ensure employees don not act in contravention of EEA.  The employees claim was based on S 5 EEA which imposes a duty on employers to take positive steps to ensure promotion of equal opportunities by eliminating unfair discrimination in any employment policies. S 6(3) EEA prohibits unfair discrimination in the form of sexual harassment, harassment constitutes discrimination and if discrimination is ito of a ground in S 6(1) it is automatically unfair. .Mafodi was charged and found guilty of sexual harassment at the disciplinary enquiry, thus it constituted automatically unfair discrimination. The court was of the view that the first three requirements had been met and thus only the last three instances had to be looked at. The incident was reported thus the court was satisfied that that the employer was aware of the incident, leaving only the last two issues relevant for the determination of the liability of the employer.  It was undisputed that the employer had not failed to consult with parties or take necessary steps. The court held in this respect that the delay in finalizing the hearing was not unreasonable nor due to an ulterior motive of the employer. It was also held that the issue of sanction imposed at the disciplinary hearing was irrelevant. The rights of the employee were not dependant on the dismissal of Mafodi, since she could still claim even if he was dismissed. The court noted that the chairperson of the disciplinary enquiry had taken into account the disciplinary regulations. The court held that there is no general rule that suspension or removal from the workplace is automatic in every sexual harassment complaint. It was held further that the nature and the extent of the harassment may indicate whether this would be a necessary step. The other instances of sexual harassment were never reported by the employee and thus could not be dealt with by the employer. The court held that the issue which had arisen in respect to signing the maternity leave form, had nothing to do with the sexual harassment complaint and was caused by her transfer on her request. In respect to the issue of confidentiality, the employee did not report this to the employer and had only become aware of this through a social worker’s report, and on receipt of this Swanepoel was disciplined which was in line with the social worker’s recommendation. The court did state though that Swanepoel should have known that what he did was wrong or exposed the employee to risk, but was of the opinion that the steps taken against him were appropriate. The essence of the employee’s case was that the employer failed to implement its own disciplinary code and also the circular. The court held, that in terms of the circular there was no evidence that the employee suffered prejudice due to the disciplinary hearing being chaired by a male and not a female, as in the view of the court it was no mandatory to do so. Its reasoning for the above was that, disciplinary codes are guidelines that should generally be followed unless there are reasons for failing to do so, thus in essence it must be in accordance with justice. In respect to the other incidences of sexual harassment, they had not been reported and thus could not have been dealt with by the employer. In light of the above reasons the court dismissed the employee’s contentions and the application was dismissed without costs.

    Discrimination on the basis of race: Employers will pay a high sanction!

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    The consequences for any employer guilty of racially discriminatory practices are severe. In a recent Labour Court case which is discussed in full below, an employer was held to have unfairly determined an employee’s pay on the basis of race, and to have unfairly dismissed her for exercising her right to refer the practice to a bargaining council for conciliation. The Court, commenting that such conduct “calls for a high sanction”, awarded the employee compensation of 20 months’ salary, plus the differential in salary for a year, plus the costs of the claim.

    In the case of Mutale v Lorcom Twenty Two CC a black secretary was tasked to interview candidates for the position of Girl Friday. She was instructed to offer all black candidates a set salary lower than all white candidates who would be paid whatever amount they requested. The instruction resulted in the employee reflecting upon her own position and this left her feeling deeply hurt. She then realised that she had also been hired at the set salary rate offered to black candidates on commencement of her employment, despite the fact that she had requested more in her curriculum vitae. To make matters worse, although she held a degree, a non-degreed, white, female colleague in the same position as herself was earning more than her.   She took this issue up with her employer, who could give her no reasonable explanation for this discrepancy. She was then given a series of warnings for no good reason before finally being dismissed.  She claimed that she had been dismissed for threatening to take her complaints to the Department of Labour.

    The court stated that the onus or the burden to prove that she had been discriminated against on the basis of her race was hers to prove. The court could not just assume that because she was black that white persons were being treated more favourably. It was held that none of the numerous complaints about the employee’s conduct warranted her being dismissed. It was more probable that the employee’s claim that she had been paid less than the other white employees because of her race was the reason.

    The court had the following to say about the employer’s conduct – The employer had realised her intentions to take issue with her employer’s conduct, and had attempted to indict her through trumped up charges of misconduct. The Court held the employer had used race as a yardstick to determine the salary range to be offered to candidates for the position of the post of Girl Friday. The court held that the employee was genuinely concerned that her own salary was computed on the basis of her race. When the employee took issue with the racially based salary computation of the employer’s employees, Mrs Smith (employer) reacted to it and concocted an exit mechanism for her from the employment. Mrs Smith (the employer) would decide what increment and when to give it to the employee. The computation of the employee’s salary was based on arbitrary grounds. The employee was entitled to refer an unfair labour practice dispute pertaining to the computation of her salary to the relevant bargaining council.

    The court held that discrimination of an employee on the grounds of race or other arbitrary grounds has no place in employment practices even apart from the fact that it is unlawful.

    The size of the award serves as a hefty reminder to all those employers who may still be behaving as though they were in apartheid times.

    In previous cases the courts have had the following to say about racial discrimination –

    In Mahlangu v Amplats Development Centre the labour court commented on racial discrimination and it said: Perceptions of racial discrimination in the employment environment, endemic in the aftermath of the apartheid era, are not uncommon and are frequently justified. Those are causes which, if proved and established upon application of the relevant legal principles, will justify the award of the maximum relief which the Labour Relations Act 1995, recognizing the absolute unacceptability of that form of conduct on the part of employers, prescribes. A phenomenon of not infrequent occurrence, although perhaps equally understandable in the historical context, is a hyper sensitivity to a perceived state of affairs in which, upon objective analysis, the true facts are distorted.”

    Employers please ensure that all your employment practices are recorded, transparent, and fair. Racial discrimination, whether it be in the employment field or anywhere else, will not be tolerated and Employers who do not heed this will PAY heavily!

    Suspending an Employee

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    Mogothle v Premier of the Northwest Province; The member of the executive council for agriculture conservation and the environment
     
    Case No. J 2622/08
    Judgement Date: 05 January 2009
    Jurisdiction: Labour Court, Johannesburg
    Judge: Van Niekerk, Judge
    Subject: Suspension without a hearing

    Issue: The Employee, who was a deputy director general of department of agriculture and development in NWP, brought an urgent application to set aside his suspension after he had been indefinitely suspended to allow the Employer to investigate into the alleged corruption allegations against him. Held that his suspension had been unfair/ unlawful.

    Summary of facts: The employee was employed by the Department in April 2006. Allegations of corruption were levelled against the employee in an article in the Mail & Guardian on 4 November 2008. On 10 November 2008, the MEC appointed Auditors to investigate the allegations.  At this time the employee was not suspended.  On the 18 November 2008 the Minister of the Executive Council requested the employee to take a leave of absence pending an investigation into his alleged acts of corruption. He agreed to this on the basis that the investigation would be completed by month-end and he would be allowed to return to work.  On the 1 December 2008 the employee reported for duty, whereupon his leave was extended until 14 December 2008 so that the auditor general’s investigation might commence.  It then became clear to the MEC that this was an unrealistic target date and he was placed on extended leave for an indefinite period. The employee then filed this application. He claimed that his suspension was unlawful for the following reasons: 1) decision to suspend was taken by Employer under direction from Northwest legislature and not in exercise of discretion entrusted to them & 2) certain jurisdictional preconditions for suspension weren’t satisfied and 3) he wasn’t heard before the decision to suspend him was taken. The Employer argued that the LRA does not provide for pre-dismissal hearings and therefore the employee has no right to claim he was unfairly suspended.

    Summary of Judgement: The court held that the Employer failed to afford the employee a fair hearing prior to his suspension. In previous cases the court has emphasised the mutual relationship of trust and confidence that the common law contract of employment imposes on employers and employees, and should be developed in light of the constitution. Employees have the right to be fairly treated, this right may be enforced by employees substantively and procedurally, it exists independently of statutory protection against unfair dismissal and unfair labour practice. The principle of fair dealings between employer and employee must be applied.  This requires that the employer has to have a justifiable reason to believe that the employee has engaged in serious misconduct and that there is an objectively justifiable reason to deny the employee access to the workplace based on the integrity of any pending investigation into the alleged misconduct or some other relevant factor that would place the investigation or the interests of affected parties in jeopardy.  Additionally the employee should be given the opportunity to state his case before the employer makes a final decision to suspend the employee. In regard to procedural fairness, the audi alteram partem principle requires that prior to his indefinite suspension, the employee should have been given an opportunity to respond to any proposal that affected him. Suspension has the result that the employee suffers prejudice to his or her reputation, advancement and fulfilment. It is not for the employee to request a hearing, but for the employer to offer one. The hearing should be a process of dialogue and reflection and therefore it need not be a formal process.

    The bitter side of desert (ing)

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    It is that time of year again when holidays are over and the temptation not to go back to the grindstone looms for employees. This could pose problems for the employer who feels the absconding employee should be dismissed.

    Before dismissing, it is imperative for employers to take the necessary precautions and investigate the prolonged disappearance of their employees, by making contact with them. This can be done either by phoning them or conveying in another suitable form an ultimatum that said employee must return to work within prescribed period of time or a hearing will be held to dismiss them.

    The case of Nkgadma v Denkirk Metal Industries demonstrates the point:

    In this matter, the employee was absent from work for a week, so his employer sent him a letter informing him that if he did not come back to work then they would consider him to have automatically dismissed himself. Lo and behold, the employee did not return to work within the specified time. He claimed he couldn’t come back because his bank account was frozen and he had telephoned the company to tell them about his problem and was promptly told that his manager did not wish to see him. The employer agreed that it hadn’t paid him and asked him to be patient and also denied dismissing the employee.

    The commissioner found that, where an employee absconded and was given an ultimatum to return to work and did not do so, his services were terminated and he was therefore dismissed. BUT the commissioner held that the law requires an employer to convene hearings before dismissing absconding employees if their whereabouts are known, and as such this dismissal was unfair. The dismissal was also substantively unfair because the employee had not formed the intention of permanently ending employment. The employee was awarded compensation.

    In summary, Employers should do the following:

    • Contact the absconding employee with an instruction to return to work
    • Give e deadline by when the employee has to return to work
    • Explain that a hearing will be held in the event that the employee does not report for duty by the prescribed date
    • Inform that employee that dismissal could be a consequence
    • Conduct a hearing if the employee does respond

    This goes to say that at the end of the holiday your employees’ desert might not leave a sweet taste in your mouth. This does not mean that Employers should swallow the bitter pill, but don’t be the authors of your own misfortune. If you follow the correct procedure, you can sweeten your own pie and see that your employee gets his just deserts.

    What employers can do if their operational requirements demand overtime work - and the workers refuse to comply…

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    Ford Motor Company of SA (Pty) Ltd v NUMSA & others

    Labour Court: Johannesburg 16 October 2007

    The employer, with production deadlines to meet, scheduled overtime for their employees. There was an issue regarding the working of overtime on a particular Saturday and the union informed management to cease the scheduling of “excessive overtime” as it had a negative effect on the members. If the Employer didn’t comply the union would declare a dispute. The union contended that there was no contractual obligation to work overtime and could not be compelled to work overtime.

    Summary of judgment: It was held that the Employer had made out a proper case for arguing that the union had unequivocally expressed a demand that the company should cease to schedule “excessive overtime”. The court held further that the union had therefore also expressed an unequivocal intention to embark on an overtime ban, which therefore constituted unprotected strike action. The court held that the Employer would suffer irreparable damage if the unprotected industrial action was not interdicted and that the Employer had no other suitable remedy available. The Rule Nisi was therefore confirmed with costs to follow the suit. The interdict was granted as applied for.

    SETA Unable to Reclaim Grant

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    Tourism, Hospitality & Sports Education & Training Authority v TMS-Shezi Industrial Services

    Labour Court Johannesburg: 26 July 2007

    The Tourism, Hospitality & Sports Education & Training Authority, a SETA, concluded an agreement in terms of which the defendant would provide training for learners under the Skills Development Act 97 of 1998 (”Skills Development Act”). After two years, the SETA sued the defendant in the High Court for R9 859 005, being the amount it had allocated in the form of grants for training and learner allowances to the defendant in that period. The defendant’s response was to file an exception to the plea on the basis that it did not disclose a cause of action.

    Summary of Judgement: The court held that the SETA’s case was premised on an allegation that the defendant had breached its obligations under the Act, as read with the applicable learnership agreements, which breach made it impossible for the SETA to provide the learners with certificates as evidence of successful completion of their courses. The Skills Development Act is silent on whether the SETA may claim damages in such circumstances. “Damages” may entail either delictual or contractual damages, but if the claim was neither delictual nor contractual, it could only be founded on the provisions of a statute. The question was accordingly whether a claim for damages could be inferred from the Act or SAQA (South African Qualifications Authority) and/or the PFMA (Public Finance Management Act). In this regard, the court held that the first principle of interpretation was that the words of a statute must be given their ordinary, literal meaning. Any implied provision have to be reasonable, or necessary to give effect to the obvious intention of the Legislature. The court held that the PFMA provides a framework within which the SETA as an accounting authority could put in place measure, policies and procedures to protect the interests of public entity. In this case, for instance, it could have put in place policies and procedures to deal with payment of grants the consequences of failure to comply with the provisions of such policies. The court further held that the SETA had incorrectly assumed that it was itself a party to learnership agreements. Such agreements created contractual relationships between employers and individual employees. The SETA’s role is limited to assisting employers and employees to conclude agreements and to registering them. The Court held that, if the Legislature had wished to confer on SETAs the right to reclaim grants by way of actions for damages, it would have said so in clear terms. However, the Act goes no further than to confer the right to withhold funds if an employer or training provider fails to comply with stipulated conditions. Finally, the SETA did not quantify its damages as required by the rules of the court, as a result of which the defendant was unable to assess what was being claimed from it in each case and to that extent, the pleading was vague and embarrassing. As a result the court upheld the exception that the plea did not disclose a cause of action.

    As a result we may accept that the courts will not allow Setas to reclaim grants to service providers which have allegedly failed to comply with conditions of grants.