This article is based on Chapter 3 of the latest book “A PRACTICAL STEP-BY-STEP GUIDE TO RETRENCHMENT LAW IN ZIMBABWE” which is available in hard copy.
There may be situations where an employer deems it necessary to withdraw a notice of intention to retrench. During retrenchment negotiations, the employer may come to realize that the minimum retrenchment package is financially unfeasible, perhaps due to adverse economic conditions.
Additionally, the employer might recognize that proceeding with the retrenchment could put the organization in a more detrimental financial position. This raises the question of whether such an employer can legally withdraw the notice of intention to retrench. Meanwhile, employees may be prepared to leave the organization and begin a new chapter in their lives. The issue becomes whether the employer has the legal right to retract the notice of intention to retrench and call for the resumption of duty by the employees.
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In Freda Rebecca Gold Mine Holdings Ltd v Nhliziyo & 180 Others, the Supreme Court dealt with a matter which resembles the above scenario. In this case, the employer engaged in a retrenchment exercise to cut down on operational costs. The retrenchment exercise was approved, and at that stage, the employer realised that retrenchment was going to be a costly exercise. The employer withdrew the retrenchment notification, and the employees initially agreed to return to work, worked for two days and thereafter demanded that they be paid their retrenchment packages since their employment had ended through retrenchment.
Those who refused to return to work were dismissed, leading to them challenging the process. The labour court ruled in favour of the employees, pointing out that when the ministerial approval was given, their contracts had been terminated. The retrenchment procedure that applied during this period was that the minister could either approve or refuse to approve a retrenchment.
The Supreme Court acknowledged that, under specific conditions, an employer may lawfully withdraw its intention to retrench and reinstate employees to the workplace.