SARS employee fired over R3.6m refund wins back her job after court ruling - IOL
The Labour Court has ruled that SARS was wrong to dismiss an employee over a R3.6 million VAT refund audit, finding that her failure to properly document some audit findings amounted to negligence, but not gross negligence warranting dismissal.
The Labour Court has ruled that SARS was wrong to dismiss an employee over a R3.6 million VAT refund audit, finding that her failure to properly document some audit findings amounted to negligence, but not gross negligence warranting dismissal.
The Labour Court has overturned the dismissal of a South African Revenue Service (SARS) employee who was fired for alleged gross negligence after failing to properly document parts of a R3.6 million VAT refund audit.
The judgment was delivered by Judge Makhura on August 11, 2026, following a review application challenging a CCMA arbitration award that had upheld the employeeβs dismissal.
The matter stemmed from a VAT refund claim submitted by the Muslim Judicial Council Land Trust (MJC) for the April 2019 tax period. The claim, amounting to R3,608,006.26, was flagged for verification after SARS detected variances in the taxpayer's return.
The employee, who worked as a VAT auditor, was assigned the case on December 24 2019. She was required to investigate six identified risks before finalising the verification. The revenue service later accused her of failing to follow its audit procedures and properly record her findings, alleging that this had resulted in financial loss to the revenue service.
She was dismissed onΒ September 2, 2021.However, the Court found that the evidence showed she had addressed the identified risks but failed to record her findings in relation to three of them.
"First, negligence is not rendered gross or serious merely because an employer characterises it as such," Makhura said.
"Whether negligence rises to the level of gross negligence is an objective enquiry that must be determined with reference to the facts and evidence of the particular case. Its seriousness cannot be assumed; it must be established."
The court also found that the R3.6m refund was legally due to MJC and was eventually paid by SARS on 18 May 2021. This meant the revenue service had suffered no financial loss.
"The evidence ultimately established that the amount in question was legitimate,lawfully due and payable to MJC, and was in due course paid to it."
The judge further said that the employee had continued performing the same duties for more than 18 months after the incident without further allegations of misconduct.
SARS's own witness testified that she still trusted the employee and confirmed that workers who failed to follow the guidelines were often given warnings.
He found that the commissioner had failed to properly consider the evidence and that the decision to uphold the dismissal could not stand.
The court declared the dismissal substantively unfair and ordered SARS to reinstate the employee retrospectively, without loss of benefits.
SARS was also ordered to pay her backpay within 15 court days, while she received a written warning valid for five months.
"The applicant is ordered to report for duty within a reasonable time but not later than Monday, 17 August 2026 (unless she has a valid reason) in terms of her reinstated contract of employment."
