Secondary

Is a debarment hearing a procedural prerequisite

Is a debarment hearing a procedural prerequisite?

A Tribunal decision published on 1 September provides further guidance to the debarment theme we have been focussing on recently. Importantly, it clarifies the need for a debarment hearing where due process had been followed.

The Respondent debarred the applicant on the basis of her non-compliance with the provisions of the FAIS Act and provisions of the General Code of Conduct. In addition, it was alleged that she compromised her fit and proper requirements in that she was dishonest in her conduct pertaining to various clients.

The request for reconsideration was based on the fact that the appellant contended that she  was not provided with the grounds for,  or proof of the debarment. She further stated that she had provided  substantial proof and had not received any such correspondence from the respondent pertaining to her debarment.

Investigations were initiated by the FSP on 15 January 2021, and the employer continuously furnished the applicant with evidence against her and requesting her to respond by 31 March 2021.

On  5  March  2021  she was informed that  her  employment  contract  would  be terminated  within 30 days.  She was  also notified of her employer’s intention to debar her and was  referred  to previous emails containing the results of the investigations into her conduct as reasons for her debarment. In addition, she was given the opportunity to state her case before 31 March 2021.

On 31  March 2021, the applicant  was  advised that  the  debarment  process  would ensue  and that she should advise if a date should be set for a disciplinary hearing.

Instead, she persisted with the issue that she has a right to be furnished with the reasons  and evidence pertaining to her debarment. This was given to her. She  was also given the  opportunity to  deal  with  the  allegations of misconduct  levelled against her. The Tribunal notes that  she failed  to  deal  properly  with the  substantive issues and “…persisted  with  peripheral  issues  namely  grammar  issues  –  “no inverted commas”,  the fact  that  she  has  not  been referred  to as  “Ms”,  the document  having spelling errors, the document  having  “inserts”  from  the  FAIS  Act  and  the  fact  that  proof  was not furnished to her when the issue of  debarment was raised.”

In addition, she stated that she had provided substantial proof to dispute the allegations against her but did not receive any response from the FSP pertaining to her debarment. This formed the basis of her application for reconsideration of her debarment.

Debarment policy

The employer’s  policy  on debarment  is  aligned with the provisions  of  Section 14(3)  of  the FAIS Act,  read with  the  Guidance Note  2019.    It  is  not  required  that  a  debarment hearing be conducted.   The fundamental  requirement  is  that  the debarment  process must  be fair  –  namely  that  she  be given an  opportunity  to  respond  and have consideration  to  the  allegations  levelled  against  her  together  with  the  relevant information.

The  debarment  policy does however allow the  FSP to proceed with the decision to debar  in  the  event  that  the  representative  fails  to  respond.

Tribunal findings

“The applicant has placed nothing concrete before this Tribunal to demonstrate that the findings and conclusions against her were not justified. The evidence from the forensic investigation remains unchallenged. The confirmation from clients that the policies were issued without their consent has not been contested with concrete facts. This includes the evidence of forgery identified by a hand-writing expert.”

“The evidence reflects that the applicant compromised her honesty and integrity. She was dishonest in her dealings with the respondent as well as her clients. She committed forgery, fraud and was dishonest. Her conduct is unbecoming of a financial service provider in this industry.”

The application for reconsideration was therefore dismissed.

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