Labour Court Orders SARS to Reinstate Employee
The court found dismissal over a R3.6 million VAT refund audit was too harsh despite proven negligence.
Updated on Nov. 14, 2026 in Human Resources
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The Labour Court ordered the South African Revenue Service to reinstate a former employee dismissed over negligence in a R3.6 million VAT refund audit. The court overturned a CCMA arbitration award that had upheld the dismissal.
Why it matters
The ruling underscores that negligence findings do not automatically justify dismissal, particularly for employees with long service and no prior disciplinary record. It highlights how consistency in disciplinary sanctions can weigh heavily in labour disputes.
The disputed VAT refund was R3.6 million, paid on 18 May 2021 after the employee's case was reviewed. The court ordered reinstatement without loss of benefits, with SARS required to pay backpay within 15 court days.
The players
South African Revenue Service (SARS)
South Africa's national tax and customs authority, responsible for collecting revenue and administering tax law.
Labour Court of South Africa
The specialist court that hears labour disputes, including appeals and reviews of arbitration awards.
The details
The employee was assigned the audit on 24 December 2019 and failed to document findings on three of six identified risks. SARS testified that employees committing similar misconduct were ordinarily issued warnings, and the court ruled dismissal was too harsh.
Timeline
24 December 2019: Employee assigned the VAT audit case.
18 May 2021: SARS paid the R3.6 million refund.
11 August 2026: Labour Court overturned the CCMA award.
17 August 2026: Deadline for the employee to report for duty.
Legal Framework
The judgment applies the substantive fairness test under South Africa's Labour Relations Act, which weighs the severity of misconduct against consistency with prior sanctions. The ruling follows that test by treating SARS's own practice of issuing warnings for similar conduct as decisive.
Employees facing discipline for negligence may find that dismissal is challenged where comparable misconduct has previously drawn only warnings. Employers are reminded that consistency in sanctions can determine whether a dismissal is fair.
The takeaway
Employers should document audit findings fully and apply disciplinary sanctions consistently, since inconsistency can undermine an otherwise justified dismissal. Employees with long records should note that tribunals and courts weigh service history heavily.
Further reading
Explore more on Human Resources and how South African labour courts assess dismissals.
Source note: This article includes information reported by IOL.
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