- Tribunal clarifies that provident fund benefits cannot be withheld due to pending labour disputes.
- Rule 9.1 of the Sanlam Umbrella Provident Fund guarantees members’ entitlement upon service termination.
- Employer’s attempt to delay payments for financial protection is deemed invalid.
The Financial Services Tribunal has confirmed that employees can withdraw their provident fund benefits even while a labour dispute with their employer is ongoing.
The ruling, handed down on 14 November 2025, arose from the case of Wonderboy Shasha, a truck driver dismissed after an accident at work. Anderson Transport Dienste, his former employer, attempted to prevent Shasha from accessing his provident fund, insisting the payout should be withheld until the dispute before the Bargaining Council was resolved.
Judge MF Legodi, delivering the Tribunal’s decision, was unequivocal about the force of the fund’s constitution. He stated, “The rules of a fund are its constitution, and the doctrine of ultra vires applies.” He continued, “If the rules of a fund do not give the fund a legal power or capacity to do something, then such an act by the fund is ultra vires and is null and void.” This approach, he added, “aligns with the constitutional principle of legality.”
Rule 9.1 guarantees entitlement regardless of disputes
The Tribunal highlighted that Rule 9.1 of the Sanlam Umbrella Provident Fund governs termination of service. Judge Legodi noted, “If a member’s service with the employer is terminated before the normal retirement date … the member will become entitled to a benefit in terms of Part 9 once he or she elects in writing in the prescribed format.”
He explained further, “Rule 9.1 comes from the constitution of the fund. It does not give the fund legal power or authority to act against its provisions. Neither the Adjudicator nor this Tribunal may depart from this imperative.”
Addressing Anderson Transport Dienste’s arguments, Judge Legodi stated, “Rule 9.1 removes any protection the applicant has as both the employer and the employer’s contribution must be paid out. The concern about retrospective orders does not override the explicit entitlement under the fund’s rules.” He reinforced, “The application must be decided according to the provisions of the rule, and anything contrary will be ultra vires.”
Employees’ rights protected despite workplace incidents
At the time of the ruling, Shasha’s accumulated fund credit stood at R30 241, with the final contribution made in February 2025. The Tribunal rejected the employer’s assertion that withholding the payout would provide financial protection for both parties.
Judge Legodi clarified, “Such orders will protect both the applicant and respondent, as there must be repayment of provident fund contributions if required. However, this cannot override the explicit entitlement under the fund’s rules.”
The judgment makes it clear that membership in a provident fund gives employees robust rights that cannot be suspended during a workplace dispute. “Employees are entitled to receive their benefits once their service terminates, and employers must follow the fund’s constitution,” Judge Legodi concluded.
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