Recovery of Company Property

Introduction

Situations may arise that necessitate the need for a company to retain its property that is in the hands of ex-employees. A typical example is when an employee who has been allocated a company vehicle or a laptop is dismissed and in turn appeals against such a dismissal. The employee in this example may insist on using the company property pending the outcome of the appeal. The major question is whether such insistence can be sustained at law. In this section, the legal principles behind this worrying question will be discussed!

Why some employees retain company property

Various reasons are normally put forward by employees in their bid to retain property that belongs to the company. In most cases, such property is allocated formally in the course of employment to help an employee perform his job. In other cases, the property in question is given to an employee as a form of remuneration, “a benefit”, subject to it being owned by the company.

When company property is allocated to an employee, the contract of employment may provide for a right of first refusal if the car is to be sold at a later date. This means that the employee is given the first chance to purchase the property[1]. Problems often arise when employees, on being dismissed or on resignation interpret such contractual clauses as creating a right to have the property sold to them or to be handed over to them.[2]

Another source of the problem comes during appeal proceedings. An employee who has an appeal pending before a Labour Court might interpret such proceedings as giving him or her a right to hold on to the company property in his possession pending the outcome of the appeal. This problem has been authoritatively addressed by the court in Nyahora v CFI Holdings (Pty) Ltd.[3]The lodging of an appeal does not mean that the employee has a right to hold on to company property.

What remedy is applicable in this instance?

The remedy applicable for the recovery of company property that is in the hands of ex-employees is the civil remedy of rei vindicatio. This is one of the oldest civil remedies since Roman times. It is available to an owner of the property who has found his property in the hands of another without a justifiable cause.

According to a matter between Chitungwiza Municipality v Maxwell Karenyi[4]for an employer to make use of this remedy, he or she must prove the following elements:

That he is the owner of the property.
That at the commencement of the action, the thing to be vindicated was still in existence
That the respondent was in possession of the property
That the respondent’s possession is without his consent.

On proving these elements, a court may order the employee to hand over to the employer company property in his or her possession.

It is important to note that when hearing such an application the employee holds a right to prove that he has a better right that entitles him or her to continue holding on to the property. In Chitungwiza Municipality v Maxwell Karenyithe High Court noted that the option to purchase a car belonging to a company on resignation does not create a right to purchase the vehicle when the employer is not yet selling the car.

The right to ownership is respected by the courts. Ownership is the most comprehensive real right one might have with regards to his/her thing. The remarks by the Supreme Court in Nyahora v CFI Holdings (Pty) Ltdcannot go unmentioned. The court said:

“The action rei vindicatio is available to an owner of property who seeks to recover it from a person in possession of it without his consent…. He has merely to allege that he is the owner of the property and that it was in the possession of the defendant/respondent at the time of commencement of the action or application. If he alleges any lawful possession at some earlier date by the defendant, then he must also allege that the contract has come to an end “

This Supreme Court case is clear. When a contract of employment comes to an end, the right to hold on to a property belonging to an employer also comes to an end. The employer simply needs to show that the employee has resigned, or that his services have been terminated. The fact that the dismissal is being contested in another forum does not have a bearing on the rei vindicatio application.

Which court has jurisdiction to hear such a dispute?

Arguments have been put forward before our courts that a dispute in terms of which there is a legal nexus between the property in question and the contract of employment falls within the exclusive jurisdiction of the Labour Court. This question was finally dealt with in Nyahora v CFI Holdings (Pty) Ltd discussed above. In this matter the Supreme Court argued as follows:

“Nothing in s 89(6) takes away the right of an employer or employee to seek civil relief based on the application of pure principles of civil law, except in respect of those applications and appeals that are specifically provided for in the Labour Act. Nor is there contained in s 89 any provision expressly authorizing the Labour Court to deal with an application, such as in the instant case, for the common law remedy of rei vindicatio. Such applications fall squarely within the jurisdiction of the High Court.” (Emphasis Added)

It is submitted that both the High Court and the Labour Court have jurisdiction to hear applications for rei vindicatio. The High Court has exclusive jurisdiction to hear all civil matters before it. This jurisdiction is conferred in terms of Zimbabwe’s Constitution of 2013.[5] This, therefore, means that an employer contemplating recovering his or her property has a choice between taking the matter up with the High Court or the Labour Court.

Conclusion

I find this area of law interesting. It shows the relationship that arises between labour law and civil law. Practitioners dealing with labour relations must be mindful of the jurisdictional issues indicated above. They also must be alive to what needs to be proved for the company to retain its property in the hands of ex-employees. That said, it should be highlighted that the same principles discussed in this section are also applicable when immovable property is in question. By instituting eviction proceedings, the company must prove a similar set of facts to the ones discussed above.

Category: Recovery of Company Property