CONSTITUTIONAL COURT DISMISSES CHALLENGE TO STATE PENSION FUND CANCELLATION PROJECT
21 September 2018
On 20 September 2018, the Constitutional Court handed down judgment in the matter of Rosemary Hunter v Financial Sector Conduct Authority and Others, which concerned the legality of the so-called “cancellations project” by the Financial Sector Conduct Authority (“FSCA”), formerly known as the Financial Services Board. The “cancellations project” aimed to cancel the registration of a number of pension funds, after changes in the laws governing pension funds left thousands of funds without properly constituted boards.
Lawyers for Human Rights represented the Casual Workers Advice Office (CWAO), a non-profit organization that provides advice, assistance, and support to precarious workers, which was admitted as amicus curiae in the matter. A critical part of CWAO’s mandate is to to ensure that workers are able to access their employment benefits arising from those times when they were employed, including benefits flowing from pension funds and medical aid membership.
The Applicant in the matter, Ms Rosemary Hunter, as the former deputy registrar of pension funds and deputy executive officer of the FSCA, identified irregularities in the cancellations of these funds, and alleged the that the cancellations project would have prejudicial consequences for the remaining members of the cancelled funds. She sought a supervisory order compelling the FSCA to conduct further investigation, which the Constitutional Court dismissed on the basis that previous investigations have already been undertaken, and that a more appropriate course of action in this case would have been to seek judicial review.
As amicus curiae, the CWAO submitted that the registrar’s unlawful conduct centred on the failure to consult the pension fund beneficiaries in conducting the cancellation project. In its submissions, CWAO argued that the Constitution imposes upon the registrar a duty of consultation and intervention (to proactively search for, consult, and where appropriate cause to be paid) owed to the beneficiaries of benefit funds. The failure to provide notice or engage prior to cancellation meant that beneficiaries were not informed of their unclaimed benefits, and the regulatory authority was not in a position to facilitate the collection of those benefits.
“The outcome of this matter is disappointing, particularly for those workers who already face a number of difficulties in accessing benefits to which they are legally entitled”, said Jessica Lawrence, attorney for the Labour Unit at LHR. “The cancellation project is only one part of a larger, systemic failure of the respondent regulatory authorities to protect the rights and interests of workers and their nominated beneficiaries, and to facilitate their access to provident and pension fund benefits. LHR and CWAO will certainly look to develop the law in this respect in future”.
For more information contact:
Carol Mohlala
Phone: 079 238 9826
E-mail: Carol [at] lhr [dot] org [dot] za
Website: www.lhr.org.za
Jessica Lawrence
Phone: 011 339 1960
E-mail: jessical [at] lhr [dot] org [dot] za
Website: www.lhr.org.za