Court halts ENPF board inauguration

THE High Court has granted an urgent interim order sought by business and labour organisations to stop the inauguration and public announcement of the Eswatini National Provident Fund (ENPF) Board over disputed appointments and the exclusion of their nominees.

The order was granted on Wednesday by Judge Maxine Langwenya following an urgent application by the Federation of Eswatini Business Community (FESBC), Business Eswatini and other applicants challenging decisions by the Minister of Labour and Social Security Phila Buthelezi, concerning the composition of the board.

The applicants want the court to review and set aside the exclusion of Themba Dlamini, nominated by FESBC and E. Nathi Dlamini, nominated by Business Eswatini, as well as the appointment of Makhosini Mndawe, the ministry’s Principal Secretary to the board.

The minister is accused by the respondents of bypassing business federations by excluding two nominees and raise corporate governance concerns.

According to the court order, the applicants were represented by attorneys from Robinson Bertram lawyer Siphamandla Simelane, while there was no appearance for the respondents. The court granted an amendment to the application to include the Federation of Eswatini Trade Unions (FESWATU) as the sixth applicant. It further granted orders in terms of prayers one, two, three and four of the notice of motion.

The rule was made returnable on November 11, when the matter is expected to return to court.

The dispute arose after the minister reportedly scheduled the inauguration and public announcement of the new board for Wednesday at Sibane Hotel. The applicants approached the court urgently after receiving an invitation from the ministry on Tuesday informing them of the planned event.

In their founding affidavit, FESBC Chief Executive Officer Ben Simelane argued that the planned inauguration could prejudice the applicants while their challenge to the nomination and appointment process remained unresolved. Simelane said the applicants could not afford to pursue the matter through ordinary court procedures because the application might only be heard after approximately three months, by which time the board would already have been appointed and could have made financial and strategic decisions.

“The applicants have no adequate alternative remedy capable of providing effective protection against the imminent prejudice described above,” the affidavit stated.

The applicants argued that allowing the inauguration to proceed could undermine the effectiveness of the review proceedings because the board might begin exercising its powers before the court determined whether its composition was lawful. They asked the court to prohibit the minister from inaugurating or publicly announcing the appointments pending the final determination of the substantive review application.

The applicants also want the court to declare the minister’s decisions unlawful, irrational and invalid, arguing that the decisions departed from the statutory framework governing the ENPF board and the established arrangements for nominating representatives.

Dispute over nominations

ACCORDING to the founding affidavit, the First Schedule to the Eswatini National Provident Fund Order of 1974 provides for a board comprising representatives of employers and employee federations, public officers, the Swazi National Council, a ministerial nominee, the fund’s chief executive officer and the labour commissioner.

The applicants contended that the nomination process should respect the relevant statutory provisions and the established rotational arrangement through which employer federations nominate representatives to the board.

They claimed that FESBC was entitled to nominate a representative during the latest appointment process but was not invited to submit a name. Instead, the minister allegedly requested the Business Federation of Eswatini (BUFE) to make the nomination.

FESBC subsequently nominated Themba Dlamini, but the applicants maintain that his exclusion deprived the organisation of its turn to nominate a representative. “FESBC maintains that it is entitled to nominate Dlamini for appointment to the ENPF Board,” Simelane stated in the affidavit.

The applicants further argue that the minister’s decision was based on an incorrect interpretation of what constitutes a completed term of office. The dispute follows the dissolution of the previous ENPF board in July after concerns were raised about irregularities in the appointment of certain members, including its chairperson.

According to the affidavit, a parliamentary inquiry examined the appointments and recommended that the minister takes appropriate steps to address the identified irregularities. The minister subsequently dissolved the entire board through an instrument dated July, 29.

The applicants argue that the previous board never held its inaugural meeting, underwent the required induction or began performing its substantive functions before it was dissolved. They therefore contend that its members should not be regarded as having served a completed term for purposes of determining eligibility for reappointment.

PS’s appointment questioned

THE applicants are also challenging the appointment of Principal Secretary in the Ministry of Labour and Social Security Makhosini Mndawe to the ENPF board.

They do not dispute that the governing framework provides for the appointment of public officers.

However, they argued that Mndawe’s simultaneous roles as PS in the ministry responsible for the fund and as a board member could create a conflict of interest.

According to the affidavit, the ministry handles administrative and policy matters relating to the ENPF, including issues that may require ministerial consideration or approval.

The applicants contend that Mndawe’s position could place him in a situation where he participates in board decisions that subsequently require consideration or processing by the ministry in which he holds senior executive office.

They argued that this arrangement risks compromising the separation between the board’s decision-making responsibilities and the ministry’s oversight and administrative functions.

“The applicants accordingly contend that the appointment of the PS, without adequate consideration of the potential conflict and without appropriate safeguards to preserve institutional independence and accountability, is irrational and inconsistent with the principles of sound corporate governance,” the affidavit stated.

The applicants maintained that their case concerns the lawful constitution of the fund’s governing body and the protection of their rights to participate in the nomination process.

They are seeking a final order setting aside the disputed decisions and an order directing that the costs of the application be paid by any respondents opposing it. The respondents included the minister of labour and social security, Simon T. Khumalo, the Business Federation of Eswatini, the attorney general and ENPF.