Labour Court orders Absa to reinstate banker dismissed for over decade-old misconduct claims

The Labour Court in Cape Town has ordered Absa Bank to reinstate private wealth banker Ronaldo Giovanni Kleinsmith, ruling that his dismissal was substantively unfair and based partly on invalid disciplinary charges.

Acting Judge W Jacobs reviewed and set aside a Commission for Conciliation, Mediation and Arbitration (CCMA) award that had previously upheld Ronaldo Giovanni Kleinsmith's dismissal.

The court substituted it with an order declaring two of the three charges against him legally void and finding that the remaining charge did not justify dismissal.

Kleinsmith was first employed by Absa in 2008 and later promoted to private wealth banker. He was retrenched in July 2021 but re-employed in the same role in December 2022 under a new contract.

However, in November 2023, Absa charged him with gross misconduct on three counts; failing to declare an outside business affiliation (OBA) with Opulence Advice and Consulting (Pty) Ltd; using an unapproved introducer; and disclosing client information to a third party.

The second and third charges related to incidents allegedly occurring in 2014 — nearly a decade before Kleinsmith’s dismissal in 2023.

He was found guilty on all counts and dismissed. A CCMA commissioner later upheld the dismissal, prompting Kleinsmith to approach the Labour Court on review.

The court held that Absa had no legal right to discipline Kleinsmith in 2023 for alleged misconduct that occurred in 2014 under a previous employment contract that ended in 2021.

Judge Jacobs ruled that once an employment contract terminates, the employer loses the right to institute disciplinary proceedings based on that contract. As a result, charges two and three were declared invalid from the outset.

Turning to the first charge, the court found that while Kleinsmith had failed to declare his outside business interest on Absa’s internal compliance system, he only disclosed it during the recruitment process and Absa had employed him after assessing the risk.

The court also noted that Opulence ceased doing business with Absa after Kleinsmith’s re-employment and that the bank failed to show any actual risk or harm arising from the omission. The judge found dismissal to be too harsh a sanction.

As a result, the court ordered Absa to reinstate Kleinsmith retrospectively from the date of dismissal on the same terms and conditions. 

The bank was further ordered to pay him backpay within 14 days; and issue him with a written warning instead of dismissal.

sinenhlanhla.masilela@iol.co.za

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