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Banking giant Absa Bank has suffered a major legal embarrassment after the Labour Court in Cape Town ordered it to reinstate private wealth banker Ronaldo Giovanni Kleinsmith, ruling that his dismissal was substantively unfair and partly based on invalid disciplinary charges.
The judgment — which overturned an earlier decision by the Commission for Conciliation, Mediation and Arbitration (CCMA) — has sent shockwaves through the banking sector, including here in Uganda where Absa operates as Absa Bank Uganda.
Acting Judge W Jacobs reviewed and set aside the CCMA award that had upheld 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 first joined Absa in 2008 and later rose to private wealth banker. He was retrenched in July 2021 but re-employed in December 2022 under a new contract.
Yet in November 2023, the bank charged him with gross misconduct on three counts: failing to declare an outside business affiliation with Opulence Advice and Consulting (Pty) Ltd; using an unapproved introducer; and disclosing client information to a third party.
Crucially, the second and third charges allegedly related to incidents dating back to 2014 — nearly a decade before his dismissal.
He was found guilty and fired. The CCMA backed the dismissal. But the Labour Court saw things differently.
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. Charges two and three were declared invalid from the outset.
On the remaining charge — failure to declare an outside business interest — the court found that Kleinsmith had disclosed it during recruitment and that Absa employed him after assessing the risk. The judge also noted that Opulence ceased doing business with Absa after his re-employment and that the bank failed to show any actual risk or harm arising from the omission. Dismissal was ruled too harsh.
The court ordered Absa to reinstate him retrospectively, pay his back-pay within 14 days, and issue a written warning instead.
For Ugandan observers, the ruling is significant. Absa is one of the major players in Uganda’s banking sector, operating under the supervision of the Bank of Uganda. The case raises broader questions about corporate governance, internal disciplinary processes, and fairness in multinational institutions operating across Africa.
Legal analysts in Kampala note that under Uganda’s Employment Act, employers must also ensure procedural and substantive fairness before dismissal — especially where alleged misconduct dates back years.
While the case was decided in South Africa, the reputational impact crosses borders. For customers and employees in Uganda, the big question now is whether lessons will be learned — and whether due process inside big banks is as strong as their glossy corporate branding suggests.
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