Why Old Mutual says it was within its rights to fire Moyo a second time

Old Mutual’s board, through its legal representatives, has submitted an answering affidavit to an application by CEO Peter Moyo to have it declared in contempt of court for blocking him from returning to work.

The response is the latest in the very public spat between the companies board and the CEO, who the board has dismissed twice, and locked out of his office on three occasions.

The battle between the two parties spilt into the open when Moyo was suspended as CEO toward the end of May 2019 and then fired three weeks later.

He successfully challenged the dismissal in court as being unfair and had his contract reinstated – only to then be fired for a second time soon after.

Moyo’s legal team has regarded the second dismissal and the move by Old Mutual to prevent him from returning to work, as being in contempt of the court order that reinstated his contract.

Old Mutual’s board, however, disagrees.

In the responding affidavit to Moyo’s claims of contempt, the board said that it had fully fulfilled its obligations to Moyo in terms of his reinstated contract, and nowhere in the initial court order did the judge prevent the group from dismissing him again.

It argued that it could not reasonably allocate the duties of CEO to Moyo while the matter was being appealed and that they were within their rights to discharge their obligations to Moyo’s contract of employment by paying him what was due in terms of the contract.

“(The board) were entitled to not accept his tender of services, or to require him to work, or place him in full executive authority during the period of interim reinstatement,” it said.

“Since Mr Moyo had already been paid (and accepted) his usual remuneration for the period ending mid-December 2019, the companies were not in breach of their primary obligations under the contract of employment.”

The reinstatement of Moyo’s contract was not suspended by the application for leave to appeal – and nothing in the initial court order said that the company could not fire Moyo a second time – so the board believes it acted fully within the confines of the law.

Old Mutual said that the entire situation with Moyo was untenable and that no company should reasonably be expected to endure it.

“It is not untenable because there is a complaint about the conduct of the CEO – it is untenable because it would render the company completely ineffective or dysfunctional at the very heart of its governance and leadership,” it said.

“There can be no doubt that the relationship between the board and Mr Moyo has completely broken down.”


Read: Old Mutual’s bitter feud with its fired CEO splits shareholders

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Why Old Mutual says it was within its rights to fire Moyo a second time