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Can an employee strike because of a retrenchment dispute?

This article is based on Chapter 1 of the latest book “A PRACTICAL STEP-BY-STEP GUIDE TO RETRENCHMENT LAW IN ZIMBABWE” which is available in hard copy.


One potential question that may arise in the retrenchment procedure is whether disputes related to retrenchment can be resolved through collective job action. While retrenchment may result in difficulties, an examination of the Act reveals that such disputes cannot give rise to collective job action, such as a strike. This is because the retrenchment provisions outline a structured dispute resolution mechanism that allows any aggrieved party to seek redress.


Statutory Instrument 191 of 2024 establishes the Retrenchment Board, a statutory body responsible for handling retrenchment disputes. The provisions clearly define the rights of both employees and employers, reinforcing that retrenchment disputes fall under disputes of rights.


In Zimbabwe, disputes of rights do not justify collective job action. Any employee who engages in a strike over a retrenchment dispute, or any employer who enforces a lockout in response, commits an unfair labour practice. Furthermore, under Act 11 of 2023, unlawful collective job action now carries severe penalties, potentially leading to criminal sanctions for both employers and employees.


For the sake of completeness, it is important for one to acknowledge the exceptions outlined in Section 104(4) of the Act, which legally permit employees to engage in collective job action even in cases where a dispute of right is anticipated. For instance, if an employer seeks to retrench the entire workers’ committee or union representatives without valid justification, the law recognizes the employees’ right to initiate collective job action in response. However, while this provision exists, employees must refrain from misusing it for personal or self-serving purposes. Section 12C provides complete remedies for anyone aggrieved with a retrenchment exercise. Care and due diligence must thus be taken by those contemplating a collective job action over a retrenchment dispute.

205 Views

Retrenching employees for unlawful reasons could be problematic.

This article is based on Chapter 7 of the latest book “A PRACTICAL STEP-BY-STEP GUIDE TO RETRENCHMENT LAW, IN ZIMBABWE” which is available in hard copy.


From the foregoing, a common predicament employers face arises when an employee falls ill or is accused of breaching workplace rules, leading employers to resort to retrenchment in such circumstances. It is expected that whenever an employee is ill, the procedure outlined under section 14 of the Act should be followed to terminate the contract of employment. Similarly, when a breach of workplace rules is alleged, compliance with section 12B of the Act is mandatory.

We submit that resorting to retrenchment for reasons other than those specified under section 2 of the Labour Act is procedurally unfair and subject to challenge. For instance, a sick employee’s contract can only be terminated after the exhaustion of the initial 90 days of sick leave on full pay, upon a doctor’s recommendation, or after an additional 90 days on half pay. Retrenching such an employee is not only inhumane but also deprives them of other rights provided under the Act.

Likewise, retrenching an employee accused of breaching workplace rules undermines the rights outlined in section 12B (2) of the Act. Employers are therefore urged to utilize retrenchment only in the appropriate circumstances as stipulated in the Act.

Employees have a constitutional right to equal benefit and protection of the law, retrenchment laws included. This means that all the rights accruing to employees in terms of the Labour Act must be respected without derogation. This further means that retrenching employees in inappropriate circumstances prevents them from enjoying some of the rights accruing to them in terms of the Act, to the extent that a retrenchment process may be challenged if the reasons put forward by the employer are not legitimate.

Despite our submission above, situations may arise in the workplace where an employee who is ill or has a pending disciplinary hearing opts to be retrenched. In such cases, it is advisable for the employer to engage in a mutual separation arrangement under section 12(4a) of the Act. This approach allows the employer to avoid using the retrenchment procedure in circumstances where it may be inappropriate.

158 Views

Enforcement of the retrenchment package: A need to improve the law

This article is based on Chapter 7 of the latest book “A PRACTICAL STEP-BY-STEP GUIDE TO RETRENCHMENT LAW, IN ZIMBABWE” which is available in hard copy.

The procedure outlined in the Labour Amendment Act 11 of 2023, which requires employees to approach the Retrenchment Board when they do not receive their retrenchment package, is, with respect, cumbersome, time-consuming, and costly. It is recommended that the legislature consider streamlining this process by allowing affected employees to approach the Labour Court directly for the enforcement of retrenchment packages without the need to go back to the retrenchment board.


Under this proposed approach, employees should be permitted to present a retrenchment certificate and/or a retrenchment agreement before the Labour Court to seek enforcement of the outstanding payment. This would eliminate the need for the current multi-step process, which requires the employee to return to the Retrenchment Board, present evidence of non-compliance, and wait for the issuance of a non-compliance certificate—only after which the employee can approach the Labour Court.


This process is unnecessarily repetitive, particularly considering that parties already receive a retrenchment certificate during the retrenchment process, confirming the retrenchment’s validity. This certificate, along with any evidence of non-payment, should be sufficient for the Labour Court to issue an order compelling the employer to fulfil the retrenchment package obligations.
Simplifying the procedure in this way would expedite the resolution of disputes, reduce legal costs, and provide retrenched employees with quicker access to their entitled packages.

229 Views

An employer can withdraw a notice of intention to retrench under certain conditions

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.

135 Views

Critique of the retrenchment process under Act 11 of 2025

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.

One particular aspect of our retrenchment laws has drawn significant attention in our analysis of these provisions.


The retrenchment process, in cases where no retrenchment package has been agreed upon between the parties, requires additional procedural steps to ensure that both the affected employees and the retrenchment board are duly notified. This can be done without any negotiations with the employees. This means that an employee’s contract may be terminated without the employer being strictly bound to uphold the employee’s right to be heard or negotiate.


A potential criticism of this framework is its resemblance to the situation in 2015 following the Zuva Petroleum judgment, where employees could be dismissed with nothing more than three months’ notice. While the legislature has since removed the direct termination of permanent contracts on notice, the current retrenchment laws are not significantly different in their effect.
This is mainly because the statutory minimum retrenchment package—equivalent to one month’s salary for each year of service—does not offer adequate protection for employees with shorter service periods. An employee with less than a year of service may receive compensation amounting to less than a month’s salary upon termination, which, in our considered view, is not far removed from the challenges employees faced in the aftermath of the Zuva Petroleum ruling.


The situation is even worse for fixed-term contract employees, who can be terminated with notice and without being afforded a retrenchment package. It is important to note that even though the Act provides for the capping of fixed term contracts, where the renewal of fixed term contracts is limited for a certain period, this capping hasn’t been applied to certain sectors. At the time of authoring this book, for example, the mining industry does not have any limitation on how many times a fixed-term contract can be renewed. This means that an employee can be on a fixed-term contract for an exceptionally long period of time and may also lose his or her job through the termination of the contract on notice. The retrenchment provisions do not assist such an employee. This, in our view, is akin to the situation after the Zuva Petroleum judgment of 2015.


That said, we acknowledge the legislature’s efforts in introducing provisions that allow employees to challenge the adequacy of the retrenchment package by presenting evidence that the employer has the capacity to offer a higher payout. This aspect is discussed in further detail below from a procedural and substantive law perspective.

264 Views

IMPLICATIONS OF THE MINIMUM RETRENCHMENT PACKAGE UNDER STATUTORY INSTRUMENT 191 OF 2024

Introduction

We have stressed on several platforms that labour law is not static. It changes every day. Employers and employees must actively be on the lookout for the changes that happen in the law.


One of the glaring changes and challenges that came with Act 11 of 2023 was the absence of a definition of a minimum retrenchment package under section 12C of the Labour Act. This created a legal challenge. In the Contemporary Employment Law in Zimbabwe , we noted this legal challenge in the following terms:

“Section 12C (2) shows that the minimum retrenchment is payable in the absence of an agreed enhanced retrenchment package. Without ascribing a meaning to the minimum retrenchment package some of the provisions in section 12C become difficult to comprehend. For example, if an employer alleges that he or she cannot pay any part of the minimum retrenchment package it becomes mandatory for the same employer to still notify the retrenchment board and indicate that “the portion of the minimum retrenchment package that he or she can pay” is not “less than twenty-five per centum of the total package.” The reference in this section to 25% of the total minimum retrenchment packages means that the legislature envisaged that the “minimum retrenchment package” would be known beforehand. In the absence of the definition of a minimum retrenchment package in the Act, there is no objective way of calculating the 25% that should be strictly paid by an employer that cannot afford the minimum retrenchment package. This is a legal problem.”

Fortunately, it seems that this issue has now been resolved. In this article, we outline the contemporary minimum retrenchment package and discuss the legal implications of its definition.

Statutory Instrument 191 of 2024

Through a Supplement to the Zimbabwean Government Gazette dated the 6th of December 2024 a fresh statutory instrument was born. It designates the retrenchment board, defines the minimum retrenchment package and comes up with a set of forms that parties can make use of during retrenchment. Of particular interest in this article is the definition of the minimum retrenchment package.

The minimum retrenchment package

Section 5 of Statutory Instrument 191 of 2024provides that:


“Unless better terms are negotiated and agreed between the employer and the employee or employees concerned or their representatives, a minimum retrenchment package of one month’s salary or wages for every year of service as an employee or the equivalent, lesser proportion of (one month’s salary or wages for a lesser period of service) shall be paid as compensation for loss of employment”.


The minimum retrenchment package as defined in this statutory instrument is higher than what was provided under Act 5 of 2015 which designated the minimum package as “two weeks salary” for every year served by the employee. The minimum package is also applicable to employees who have been with an employer for less than one year and will be paid on a pro-rata basis.


Defining the minimum package as has been done provides legal certainty and gives parties in the employment relationship a starting point in negotiating their separations. It also gives the retrenchment board the capacity to consider and resolve retrenchment issues.

Legal implications of the well-defined minimum retrenchment package

Compared to the minimum retrenchment package outlined in Act 5 of 2015, the package introduced under Statutory Instrument 191 of 2024 is higher. It shifts from providing two weeks’ salary for each year of service to one month’s salary for every year of service.


The presence of a definition of a minimum retrenchment package does not make this the only package one can pay a retrenched employee. Employers and employees are still under an obligation to negotiate and if there is room allow employees to get an enhanced package.


The companies with pending retrenchment exercises are compelled to comply with this legal development. Those parties who were relying on the minimum retrenchment package of 2015 have changes to make.


Those retrenchment exercises that had not been finalised and were based on the 2015 minimum package would have to be revisited in due compliance with the law.


The definition of the minimum retrenchment package would also now affect those contemplating mutual separations under section 12(4a) of the Labour Act. Section 120(4b) provides as follows:
“Where an employee is given notice of termination of contract in terms of subsection (4a) and such employee is employed under the terms of a contract without limitation of time, the provisions of section 12C shall apply with regard to compensation for loss of employment.”


Section 12(4a) provides for the peremptory provisions that ought to be followed when ending a contract of employment including the use of mutual separation agreements for the termination of contracts of employment. Section 12(4b) of the Act provides for the compensation of employees who may be affected by the termination of the contract on notice under section 12(4a)including those under mutual separation conditions.


A mutual separation agreement remains an agreement between the parties. Parties contemplating mutual separation agreements now have to start their negotiations by taking into cognizance the minimum package payable. After the statutory instrument parties cannot agree on anything that is below the minimum package payable.


One would add that section 12(4b) of the Labour Act should not be used to imply that the minimum package is payable to an employee who would have resigned or who would have been dismissed. These circumstances of ending the employment relationship do not constitute a situation where “an employee is given notice of termination of contract” as outlined in Section 12(4a).

What is the salary or wage for retrenchment calculations?

A contentious yet essential issue we must address in this article is the definition of “salary or wage” for each year of service. This question is contentious because, to the best of our knowledge, it remains unresolved by the courts. It is further complicated by the structure of payslips in Zimbabwe, which typically distinguish between “basic salary,” “gross salary,” and “net salary.” The basic salary refers to the amount paid to an employee excluding allowances, the gross salary includes allowances, and the net salary is what remains after statutory and permissible deductions. Each of these components constitutes a form of salary.


In our considered view, the gross salary reflected on the employee’s final payslip should serve as the basis for calculating the minimum retrenchment package. We argue that the purpose of a retrenchment package is to fairly compensate an employee for the loss of their employment. Excluding the gross salary from this calculation fails to achieve full compensation for the purposes of retrenchment. While this is our respectful position, we acknowledge that the courts may decide differently in the future.

Conclusion

With the minimum retrenchment package now clearly defined, we believe that the ambiguities surrounding the implementation of Section 12C of the Labour Act have been effectively addressed. We applaud the authorities for heeding nationwide calls to at least make compulsory retrenchment available to parties contemplating utilising this method of ending the employment relationship. We are confident that employers and employees now have a solid foundation for retrenchment negotiations.

993 Views

Termination of Permanent Contracts on Notice.

A viewpoint from the Parliamentary discussions that took place before Act 11 of 2023 was passed

Introduction

During nearly every workshop I attend, there’s a recurring inquiry about whether Act 11 of 2023[2] permits employers to terminate permanent contracts with notice. The presence of section 12(4) of the Labour Act (Chapter 28.01) which provides for the “notice of termination of the contract of employment to be given by either party” is to other people an indication that permanent contracts in Zimbabwe can still be terminated on notice. 

When Act 5 of 2015 was enacted, the clear intention of the drafters of the legislation was that “no employer shall terminate a contract of employment on notice”.[3] This position was indeed a response to the Zuva Petroleum judgement which recognised the employer’s right to end a contract on notice. This undesirable law led to several employees losing their jobs a position which Act 5 of 2015 sought to resolve.

When Act 11 of 2023 was then promulgated, the provision that “no employer shall terminate a contract of employment on notice” was removed. Section 12 (4a) was reamended in the following terms:

“ A contract of employment may be terminated only, on the part of an employee, by his or her resignation or retirement, and in the following cases on the part of an employer—

(a) by mutual agreement in writing.

(b) for the breach of an express or implied term of contract, upon such breach being verified after due inquiry under an applicable employment code or in any other manner agreed in advance by the employer and employee concerned.”

This article will analyse if the enactment of Act 11 of 2023 and the removal of the clause that provided that  “no employer shall terminate a contract of employment on notice”[4] now allows employers to end contracts on notice. It assesses parliamentary discussions of the bill that became Act 11 of 2023 and from that discussion, the article outlines the intention of the legislature as far as termination of contracts on notice is concerned.

It will be concluded at the end of this article that employers should utilise other methods of ending contracts that are found in the Labour Act and desist from ending contracts on notice.

The intention of the legislature

Interpreting legislation is not an easy job. It entails discerning the intention of the drafters of the legislation or as put by Christo Botha,  “to determine what the legislation has to accomplish in the legal order”.[5]

Several rules have been devised in our jurisdiction to ascertain the true meaning of words in statutes. The most accepted rule of interpreting legislation in Zimbabwe is the so-called golden rule of statutory interpretation. The golden rule for interpreting statutes dictates that if the language in a statute is clear and unambiguous, it should be interpreted according to its ordinary meaning unless doing so would result in absurdity or conflict with the legislature’s intent.[6] In Chegutu Municipality v Manyora 1996 (1) ZLR 262 (S) it was held that:

“There is no magic about interpretation. Words must be taken in their context.  The grammatical and ordinary sense of the words is to be adhered to, as LORD WENSLEYDALE said in Grey v Pearson (1857) 10 ER 1216 at 1234, ‘unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity and inconsistency, but no further.’”

It is only when the golden rule of statutory interpretation is in conflict with the intention of the legislature that one can resort to other methods of statutory interpretation such as the historical context of the legislation.[7] In our situation, it is essential to consider the history of section 12(4a) of the Act, introduced in 2015 to address the implications of the Zuva Petroleum judgment. This raises the question of whether the legislative intent has shifted between 2015 and 2023. This article contends that the legislature’s intention to prohibit the termination of employment contracts with notice has remained consistent throughout this period.

Parliamentary Debates and Interpretation of Legislation

Section 15B of the Interpretation Act (Chapter 1:01) allows for the use of extrinsic material in the interpretation of enactments. In terms of the Act, a Minister’s speech to Parliament, made when proposing the second reading of a bill containing a specific provision, along with the committee stage proceedings related to that bill as recorded in the Votes and Proceedings of Parliament or any official parliamentary debate records, can be utilized to confirm and determine the meaning of the provision.[8] In addition, the Act also allows for “any relevant material in the Votes and Proceedings of Parliament or any official record of debates in Parliament.”[9]

Legal scholars also concur that parliamentary debates that preceded an Act of Parliament can be used to interpret provisions in an Act of Parliament and discern the intention of the legislature.[10] Christo Botha observes that in De Reuck v Director of Public Prosecutions, Witwatersrand Local Division 2003 (3) SA 389 (W), the court utilized parliamentary debates to interpret the Films and Publications Act 65 of 1996 in South Africa.[11] The same author also notes that in Case v Minister of Safety and Security; Curtis v Minister of Safety and Security 1996 (3) SA 617 (CC) the Constitutional Court of South Africa referred to parliamentary debates during its interpretation of the relevant legislation.

It therefore follows that records of parliamentary debates assist persons in discerning the true meaning of the legislative provision. The same records can be used to ascertain the true meaning and consequence of section 12(4) of the Act when read together with section 12(4a).

Parliamentary records and debates relevant to the termination on notice

A perusal of the records of the second reading of the Labour Amendment Bill in the Senate shows that the Minister of Justice, Legal and Parliamentary Affairs (Hon. Ziyambi) remarked in the following terms when dealing with the issue of termination of contracts on notice:

“…, I think we have removed that part that employers can just give you notice and then you are discharged. In fact, what most employers were now doing, instead of going through the processes of disciplinary hearings and all that, they will simply write you a letter and say we are giving you notice that after three months we are terminating your employment. It was legal. They were now avoiding the processes of disciplinary hearing and they could just dispose of workers as and when they wanted. We have removed that provision that came about because of the Zuva Judgement, and we believe that employers can negotiate if they are under distress. If they want to downsize, they pay retrenchment package as opposed to doing that.”[12]

The impact of these statements is that ending a permanent employment contract solely through notice is forbidden under Act 11 of 2023. The honorable Minister’s mention of the three-month notice pertains to the period given to numerous employees following the Zuva Petroleum case’s aftermath. Hence, when the Act was still in the Bill stage, it was the legislative intent that termination of permanent contracts with notice should not be permitted. This intent remains unchanged.

The Acceptable Perspective

Considering the aforementioned points, the recommended approach involves interpreting the provisions of Section 12 (4) of the Labour Act in conjunction with Section 12 (4a) of the same legislation. This entails understanding that Section 12(4) specifies the legal notice periods applicable when implementing any termination methods outlined in Section 12(4a) of the Act. Employing this perspective, parties considering mutual separation, retirement, or resignation would need to adhere to the legal notice periods stipulated in Section 12(4). It’s crucial to view these two provisions not as conflicting but rather as complementary.

Conclusion

Although it is acknowledged that the language of Act 11 of 2023 does not explicitly forbid termination of permanent contracts on notice in the same manner as Act 5 of 2015, this does not negate the legislative intent. As previously discussed, this intent primarily stems from the parliamentary deliberations. The Senate records of June 7th, 2023, distinctly illustrate a legislature aiming to safeguard employees from contract termination via notice. This legislative intent remains unchanged.

This exposition has demonstrated that when the golden rule of statutory interpretation conflicts with legislative intent, the context of the legislation as evident in parliamentary debates and the provision’s history can be utilized to interpret its meaning.

Such an interpretive method does not endorse the notion that termination on notice is now permissible under Act 11 of 2023. Therefore, employers should terminate employment contracts in accordance with the clear provisions of Section 12(4a) of the Act or any other relevant provision applicable to their circumstances.

[1]                  Taurai Mrewa is an academic writer, and his writings are intended for informational purposes only. They should not be considered a substitute for professional legal advice. You can view more of such articles on HTTPS//: taumrewa.co.zw/blog.

[2]                  Labour Amendment Act 11 of 2023.

[3]                  Section 12(4a) of the Labour Amendment Act 5 of 2015.

[4]                  Section 12(4a) of the Labour Amendment Act 5 of 2015.

[5]                  See Christo Botha (2012) ‘Statutory Interpretation: An Introduction for Students’ (Fifth Edition) Juta South Africa, page 10.

[6]                  In Delta Beverages (Pvt) Ltd v Zimbabwe Revenue Authority HH129-15 the court held on page 4 that: “The golden rule of interpretation of statutes is that where the language used in a statute is plain and unambiguous it should be given its ordinary meaning unless that would lead to some absurdity or inconsistency with the intention of the legislature.”

[7]                  See Christo Botha (2012) ‘Statutory Interpretation: An Introduction for Students’ (Fifth Edition) Juta South Africa, paragraphs 5.3.2 and 7.2.2.

[8]                  Section 15B(2)(f) of the Interpretation Act (Chapter 1:01).

[9]                  Section 15B(2)(h) of the Interpretation Act (Chapter 1:01)

[10]                 See Christo Botha (2012) ‘Statutory Interpretation: An Introduction for Students’ (Fifth Edition) Juta South Africa, paragraph 6.4.3 (a).

[11]                 See Christo Botha (2012) ‘Statutory Interpretation: An Introduction for Students’ (Fifth Edition) Juta South Africa, page 150.

[12]                 Pages 43 – 44 of Parliament of Zimbabwe record of Wednesday, 7th June 2023 in which the Second Reading of The Labour Amendment Bill [H. B.14a, 2021] was undertaken. Available at https://parlzim.gov.zw/download/senate-hansard-7-june-2023-vol-32-no-35/ <Accessed 18 May 2024>.

2,055 Views

Urgent Chamber Applications

This article is based on Chapter 3 of the “Contemporary Employment Law in Zimbabwe, First Edition”.

1.1.         Introduction

The Labour Court plays a crucial role in protecting the rights of workers and ensuring that labour laws are upheld. In some cases, urgent chamber applications may need to be made to the court to address pressing labour issues.[1] An urgent chamber application is a request made to the court for an urgent hearing of a matter that cannot wait for the normal court process. The position regarding urgent applications is outlined in Document Support Centre [Pvt] Ltd v Mapuvire[2] as follows:

“Urgent applications are those where, if the courts fail to act, applicants may well be within their rights to suggest dismissively to the court that it should not bother to act subsequently, as the position would have become irreversible to the prejudice of the applicant.”

Such applications are thus usually made in cases where there is a risk of irreparable harm or where there is a need for urgent relief. Urgent chamber applications are as a result dealt with expeditiously.

1.2.         The Relevant rule

Rule 18 outlines what must happen if a party is facing an urgent labour dispute and they feel compelled to urgently approach the Labour Court for relief. A party is required to apply to the court and indicate that the matter is urgent.[3] The application must be accompanied by an affidavit in which the applicant outlines the urgency[4] of their dispute.[5] If a lawyer is representing the applicant, it is expected that a certificate of urgency is filed by the lawyer. Once an urgent matter has been received by the Registrar, the rules require that the matter be brought to the attention of the judge.[6]

A judge may then direct that the application be served on the Respondent(s) upon receiving the application from the Registrar.[7] Rule 18 (5) is quite robust as it allows a judge to ensure that a matter is heard in a manner that the judge considers appropriate. The provision is in our view more robust and highly suits the labour dispute resolution process as it ensures that disputes are resolved as soon as practicable in tandem with the court’s position Document Support Centre [Pvt] Ltd v Mapuvire cited above.

1.3.         What constitutes urgency?

What constitutes urgency has been defined and elaborated by the courts.[8] It entails that the Applicant must not delay in the enforcement of their rights. This can best be explained by the South African case of Workforce Staffing (Pty) Ltd v Sadan and Others in which the employer had to hire a private investigator to ascertain if its former employees were violating a restraint of trade agreement entered between the parties. Immediately after the violation was confirmed the Applicant sought recourse on an urgent basis. The court recognized the urgency of the matter under that circumstance.[9] It also recognised that a restraint of trade enforcement is generally an urgent matter.

It is crucial to note that urgent chamber applications should only be made in cases where there is a genuine need for urgent relief.[10] The court will not grant such applications if they are frivolous or vexatious. It is also essential to ensure that all the necessary documents and evidence are provided to the court when making such applications.

In Secretary for Higher and Tertiary Education v College Lecturers Association of Zimbabwe & 14 Others,[11] the court argued that there was no urgency in the matter because the applicant was aware of a judgement that became the subject of urgency for more than a year. Prior knowledge that a matter is urgent and not doing anything about it removes the urgency of the case. Urgency that is self-created by the applicant will not be supported by the courts. In Jiba v Minister of Justice and Constitutional Development and Others (2010) 31 ILJ 112 (LC) paragraph 18, it was remarked that “it is equally trite that an applicant is not entitled to rely on an urgency that is self-created when seeking a deviation from the rules”.

Further, it is noted that an urgent application does not work where there is a proper alternative remedy available. In Maphalle v National Heritage Council and Others,[12] the Labour Court of South Africa dismissed an urgent application on the basis that the applicant had an alternative remedy in the form of unfair dismissal proceedings.

Prejudice against the applicant is not the only factor that may allow for the granting of an urgent application. It has been held that the urgency must not only come from prejudice that the applicant may suffer. The court must be put in a position where it is aware that the matter cannot wait.[13]

1.4. Circumstances that may warrant an urgent application.[14]

There are several situations where an urgent chamber application may be an appropriate procedure to make use of in the Labour Court of Zimbabwe. Each case will depend on its circumstances, but arguably, the following circumstances may warrant the procedure of an urgent chamber application:

  1. Relief that is Interdictory or declaratory in Nature

An interdict is an order granted by the court to prevent a party from doing something. The Labour Court is not statutorily allowed to grant interdicts or declaratory orders in the manner provided for in the High Court Act. This does not however preclude the court from issuing relief that is interdictory and declaratory in nature.[15] In the labour context, interdictory and declaratory reliefs may be used to prevent an employer from acting against an employee in a manner that may be harmful or discriminatory.[16] An employee who has been unfairly dismissed may seek relief to prevent the employer from replacing him or her before the dispute has been resolved. In the same vein, the employer may want to urgently stop an employee from working for a competitor in violation of a restraint of trade agreement.[17] Every case will depend on its facts.

Urgent reinstatement

In some cases, an employee may seek urgent reinstatement if they have been unfairly dismissed or suspended from work. This may be necessary if the employee is facing financial hardship or if there is a risk of irreparable harm. In such cases, an urgent chamber application may be made to the court to seek an order for immediate reinstatement pending the finalisation of the dispute.

Urgent payment orders

An urgent payment order is a request that can be urgently made to the court for an order to compel an employer to pay outstanding wages or benefits owed to an employee. This may be necessary if the employee is facing financial hardship or if there is a risk of irreparable harm. An urgent chamber application may be made to the court to seek an order for immediate payment pending the finalization of the dispute.

 Urgent injunctions

An injunction is an order granted by the court to prevent a party from doing something or to compel them to do something. In the labour context, injunctions are often used to prevent an employer from taking action that may be harmful or discriminatory towards an employee. For example, an employee who has been subjected to sexual harassment may seek an injunction to prevent the employer from continuing such conduct. Further, an employee may urgently want to compel a LO or a DA to finalise a dispute.

1.5.         Bottom line

Urgent chamber applications play a crucial role in ensuring that urgent labour issues are addressed promptly by the Labour Court of Zimbabwe. These applications should only be made in cases where there is a genuine need for urgent relief and all necessary documents and evidence should be provided to the court. The court will deal with such applications expeditiously to ensure that justice is served.

[1]              In Dilwin Investments [Pvt] Ltd v Jopa Enterprises Co Ltd HH 116/98 the court said: “A party who brings proceedings urgently gains a considerable advantage over persons whose disputes are being dealt with in the normal course of events. This preferential treatment is only extended where good cause can be shown for treating one litigant differently from most litigants. For instance, where, if it is not afforded, the eventual relief will be hollow because of the delay in obtaining it.”

[2]              Document Support Centre [Pvt] Ltd v Mapuvire 2006 [2] ZLR 240 [H].

[3]              Rule 18(1) of the Labour Court Rules, 2018.

[4]              The importance of an affidavit in urgent applications was explained in Solidarity obo Members and Others v SEESA (PTY) Ltd (J 37/22) [2022] ZALCJHB 111 wherein the South African Labour Court noted that a case of urgency must be shown in the founding affidavit failure of which the application must fail.

[5]              Rule 18(2) of the Labour Court Rules, 2018.

[6]              Rule 18(3) of the Labour Court Rules, 2018.

[7]              Rule 18(4) of the Labour Court Rules, 2018.

[8]              See Kalayi Sikhaphakhapha Njini & Berthilde Juliet Njini v Solwayo Ngwenya and Bulawayo City Council HB 190/11 where it was held that: “The court can only exercise its discretion in determining the urgency of the matter at hand and that discretion can only be exercised on the basis of facts.”

[9]              See Workforce Staffing (Pty) Ltd v Sadan and Others (J488/23) [2023] ZALCJHB 107 on paragraph 13 wherein the court observed that: “Clearly, the applicant did not rest on its laurels when its letter to the third respondent was not favoured with the response. It went ahead to contract the services of the private investigator and his findings enabled it to launch this application. In my view, the respondent’s contention that urgency has been squandered by the dilatory conduct on the part of the applicant is devoid of merit. I, accordingly, accept that the matter is urgent and deal with it as such.”

[10]             Document Support Centre [Pvt] Ltd v Mapuvire 2006 [2] ZLR 240 [H].

[11]             Secretary for Higher and Tertiary Education v College Lecturers Association of Zimbabwe & 14 Others LC/H/547/13.

[12]             Maphalle v National Heritage Council and Others (J 929 / 2022) [2022] ZALCJHB 99.

[13]             See Dexprint Investments (Pvt) Ltd v Ace Property and Investments HH 120/02.

[14]             We have deliberately used the word “may” in this subsection because the scenarios we discuss herein are hypothetical but not necessarily remote.

[15]             In TN Harlequin Luxaire Limited V Mberikunashe Masvimbo and 14 Others SCB 84-22 it was held: “While s 14 of the High Court Act captures this remedy in its broadest and classical form as a “gentle order” which may be issued with or without any consequential relief, there is absolutely no doubt in my mind that the Labour Court in its daily operations does routinely issue declaratory orders, holding, for example, that an employee has been wrongfully dismissed or certain actions constitute unfair labour practices and then proceeding to grant consequential relief.” (Own Emphasis).

[16]             In Chris Stylianou (2) Fred Driver and Sons (Private) Limited (3) D.R. Hendry (Private) Limited v Moses Mubita and 25 Others SC 7/17 it was argued that the Labour Court of Zimbabwe being a creature of statute does not have the powers to issue an interdict.

[17]             See Workforce Staffing (Pty) Ltd v Sadan and Others discussed above.

6,347 Views

BONUSES, AND BONUS PAYMENT IN ZIMBABWE: EXPLAINING THE KEY LABOUR LAW ASPECTS

Introduction

In 2015 there was an announcement that bonus payments for government employees would be suspended for two years.[3] After the pronouncement, there was an outcry from the government employees who did not take the suspension of the bonus lightly.[4] A strike action was threatened.[5] The then-president of Zimbabwe, Robert Mugabe had to intervene and announced that there was a procedural irregularity which had led to the announcement.[6] The presidential intervention, then resulted in the payment of the bonus and resultantly pacified the government employee relations at that time.

Every year in December issues to do with the Christmas bonus, or, as it is usually referred to, the 13th cheque become topical. To several employees, an extra month’s pay represents an opportunity to get extra income to spend during the festive holidays that incorporate Christmas and New Year’s Eve. To those who receive this 13th Cheque, there is no doubt that it brings joy to them and their families.

The economic climate prevailing in Zimbabwe may not allow several companies to pay an extra month’s worth of wages as a bonus when they struggle with normal wages and salaries. This was the case in 2017 when it was reported that EMCOZ, the largest employer representative body announced that employers were not going to pay bonuses for that year.[7] The position was also not taken lightly by the employees who indicated that “any attempts to deny them the benefit will be met with various actions, including court intervention.”

What is also topical during the festive season period is that some employers might have been paying the 13th cheque religiously and may also become reluctant for one reason or another to stop paying the bonus.[8] This was the case of Rodwell Jariremombe and Others v NSSA HH 402/2018 wherein NSSA decided not to pay a bonus that it had religiously paid in the past. Such instances can result in costly and highly emotional labour disputes.

The issue of bonuses like any other pay-related issue is an emotional one and it can lead to serious labour relations challenges. As illustrated by the events that have happened in the past in our country, the payment of bonuses, if not properly handled, can result in a poor labour relations climate in employment establishments. Our sincere belief is that most of the challenges surrounding the issue of bonuses and their payment can be resolved if employers and employers are equipped with the legal knowledge that forms the legal basis for the payment of this important benefit.

The purpose of this article

The purpose of this article is to outline the several labour law principles behind the establishment and payment of bonuses to employees by their employers. The articles outline the provisions in the Labour Act that speak to the payment of bonuses in Zimbabwe. It then analyses court decisions that have provided guidance and insight on these important issues. It will be noted in this discussion that, the South African position is not far off from the Zimbabwean labour law position on the issue of bonuses. Legal practitioners, Human Resources professionals, employers and employees can borrow some legal principles from South African jurisprudence without much of a hassle. The discussion starts by outlining the statutory basis for paying bonuses in Zimbabwe.

Statutory basis for bonuses

The Labour Act (Chapter 28.01)

The Labour Act contains provisions that are scattered throughout the Act that provide employers and employees with unqualified guidance on bonuses. At least three provisions in the Labour Act refer to bonuses and the payment thereof. What is important to note is that these provisions do not compel the employer to pay a bonus and the type of bonus to pay. These provisions are discussed hereunder.

Section 12 of the Labour Act

Section 12 of the Act imposes a legal obligation on an employer to provide, in writing, details of a bonus scheme that is operated by the employer.[9] This provision is meant to prevent and preclude disputes and provide legal certainty in the payment of bonuses in the workplace. The provision also implies that it is the employer that has the discretion to come up with a bonus scheme. Once a bonus scheme is in place it must be communicated with the employee, and this must happen on engagement. The provision does not provide a limitation on what constitutes a bonus and how this can be paid to the employees. All is left to the discretion of the employer.

Section 12A of the Labour Act

Once a bonus scheme has been established and communicated in accordance with section 12(2)(h) of the Act, the employer has an obligation to indicate on the employee’s payslip the payment of such a bonus. This is in line with section 12A(5)(c) of the Labour Act.[10] Again, the provision does not indicate the nature of the bonus and how it is calculated. All is left to the party’s discretion.

Section 25A of the Labour Act

Section 25A of the Act which provides for the composition, procedure, and functions of works councils has some regulation on bonuses. The provisions place an obligation on the employer to consult with the Works Council in connection with “the criteria for merit increases or payment of discretionary bonuses”.[11] In the process of consulting the works council on bonus issues, the employer is required to get representations from members of the worker’s committee and to allow them to advance alternative proposals. The employer must also consider and respond to the representations and alternative proposals. The employer should also state why he or she does not agree with the proposals being made.[12] As much as possible the employer must attempt to reach a consensus with the employees with regard to bonuses and conditions attached to it.

The importance of section 25A of the Act, in particular the need to inform employees of the decision to implement a bonus scheme was supported by the Supreme Court in T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18. The court stated that the employer in this case had a legal duty to notify the employees about the decision to implement the bonus scheme before implementing it.[13] Its failure to consult the employees made the legality of the scheme questionable.

Different types of bonuses

A review of several cases in Zimbabwe and South Africa shows that two main types of bonuses are normally awarded to employees. There is the 13th Cheque also called the Christmas bonus and the production or the performance bonus. The two forms of bonuses are discussed below. It is worth noting that the different types of bonuses can be awarded to groups of employees and may be awarded to individuals or the entire entity.

The 13th cheque or Christmas bonus.

This is a bonus that is usually given at the end of the year. It is paid after one receives their December wages or salary and that is why it is referred to as the 13th Cheque. It is 13th in the sense that the other 12 cheques would have been received between January and December. It is given as an extra wage or salary that comes after December of every year. There is usually no condition attached to the 13th cheque. In the majority of cases, it is given to all the employees who were present throughout the year.

Production or Performance Bonus

This type of bonus is tied to specific job performance criteria and is only awarded when the employee reaches a predetermined target. It can be paid out either monthly or at the end of the year. This type of bonus is a common incentive used by employers to motivate employees to meet or exceed their performance goals. By offering a financial reward for meeting certain targets, employees are encouraged to work harder and more efficiently. The Production Bonus can be a win-win situation for both the employer and the employee, as it helps to ensure that the company’s goals are met while also providing a financial benefit to the worker.

We believe that the labour law principles governing bonuses are the same whether it is a 13th cheque or a production bonus. It is thus important to note from the outset that the Labour Act leaves the issues of bonuses at the discretion of the employer. It is the employer that must sit down and set out the conditions under which a bonus is payable in an establishment. As discussed above, under section 25A of the Labour Act, the employer has a duty to consult with the employee representatives and may or may not accept the proposals presented by these representatives. There is also no strict guidance in terms of what is payable as a bonus and the quantum thereof. All these aspects are left to the discretion of the employer and an extent the employees through the consultation process.

Discretion of the employer in bonus issues

As indicated above, the statutory provisions in the Labour Act do not impose an onerous obligation on the employer to pay a bonus. The provisions are not strict and allow the employer to consult the worker’s committee in which case the employer can take into consideration what is proposed by this committee. In some cases, the employer may proceed to avoid implementing a bonus scheme.

The major disputes that have been before our courts in connection with bonuses and bonus payments have been a result of whether bonus payment is discretionary or not. In other words, the question is whether a bonus is a privilege or a right. The analysis by the court in Rodwell Jariremombe and Others v NSSA HH 402/2018 regarding whether a bonus can be discretionary or not is profound. The court found that whether a bonus is discretionary or not is a function of whether it is a contractual obligation or not. The case is discussed below.

We submit that if a bonus is found in a contract of employment, a company policy, or a CBA or any law there is a chance that it is an obligation. This is of course after one has assessed the wording of the provisions referring to the bonus.[14] On the other hand, if this bonus is not found anywhere in the instruments mentioned above and the employer is paying it, there is a high chance that it is discretionary and can be withdrawn by the employer at any time.

 What follows is a review of several cases that provide insight into the several principles established by our labour law as far as bonus is concerned in Zimbabwe.

Minerals Marketing Corporation of Zimbabwe v Mvududu & 5 Others[15]

This case illustrates the important point that once an employer agrees to pay a bonus, this agreement cannot be set aside unilaterally. In this case, the employer agreed to a retrenchment package part of which it undertook to pay a bonus. After its audited financial statements were published it then turned out that the employer had made a loss. The employee insisted on the payment of the bonus since it was part of their agreement with the employer on retrenchment. The court pointed out that the employer must have qualified in the retrenchment agreement that a bonus was payable upon it making a profit. Failure to have such a meant that the employer didn’t set any conditions for the payment of the bonus and thus it could be paid to the employee whether a profit was made or not.

The importance of having bonus conditions known and documented is also illustrated in the facts found in the matter of Tendai Bonde v National Foods Limited SC 57/20. The employer and employee, in this case, agreed that the employee will not be entitled to a bonus if found guilty of a disciplinary offence during the period within which a bonus is payable. The employee was not paid the bonus based on a disciplinary offence. It would appear that the court was willing to accept the consequences of the terms of the bonus scheme and its adverse effect on the employee had the matter not been resolved with the consent of the parties.[16] It is thus important and indeed advisable for employers to come up with written conditions for bonus schemes and to ensure that these are communicated to the employees.[17]

Rodwell Jariremombe and Others v NSSA[18]

This case illustrates the complicated nature of bonus payments that are paid for a considerable period and that are later withdrawn unilaterally by the employer. In this case, NSSA withdrew an annual bonus citing that it was discretionary and could be taken away at any time. This prompted the employees to approach the High Court for a declaratory order compelling NSSA to pay the bonus.[19]

In refusing to compel NSSA to pay the bonus, the court argued that a bonus is a benefit that can either be contractual or discretionary. When a benefit is discretionary, the employer can take it away at any time.[20] The court further argued that once a benefit is discretionary the fact that it was honoured in prior years does not mean that it ceases to be discretionary.[21] This would be different from cases where a benefit is vested in terms of a contract of employment in which case, its discretionary nature does not exist. Such a contractual benefit must be paid by the employer unless the employee agrees otherwise.

The court then concluded that based on founding provisions of the NSSA bonuses are discretionary and as such the employer could not be compelled to pay its employees the discretionary bonus.

First Mutual Life Ltd. v Muzivi[22]

The First Mutual Life Ltd case involved the quantification of damages in lieu of reinstatement. The Supreme Court in this case, took note of the Labour Court’s judgement that an employee had to be paid a bonus for the time he had not been with the employer, that is during the period of unfair dismissal. The Labour Court had imposed this bonus after the quantification proceedings simply because the annual bonus had been “paid to other employees”. The Supreme Court highlighted the discretion of the employer regarding bonuses in such circumstances as follows:

“Payment of an annual bonus is generally discretionary on the part of the employer. It could not be said that the employee would have been awarded a bonus under all circumstances. A bonus would have depended on a clear record of performance. Having been suspended, it could not be said that the employee performed so well that he would have been entitled to a bonus.”

The Supreme Court’s remarks in the First Mutual Life Ltd case are important in that they speak to the philosophy in the Labour Act that a bonus is highly at the discretion of the employer. The remarks also seem to suggest that an employee must be available for work during the period of the bonus for them to be entitled to it. In cases wherein an employee is unfairly dismissed, the employee is not entitled to a bonus because they would not have been available for work.[23]

We have a different perspective on the court’s remarks in this particular case. When an employee is unfairly dismissed and reinstated by an order of the court, there is a legal obligation to place the employee into the position they would have been in but for the unfair dismissal.[24] Had the employee not been unfairly dismissed, he would have performed his duties and consequently would have been entitled to the bonus. Having been reinstated, we submit that an employee should also be entitled to the bonus that would have been paid to the other employees. This will place the employee into the position he or she would have occupied had it not been for the unfair dismissal occasioned by the employer. The employer’s discretion in issues of bonus must not be malicious or discriminatory.

T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others[25]

The dispute mainly concerned the implementation of a performance-based incentive bonus scheme. This had been implemented without the employer hearing what the employees had to say about the scheme. The employees complained that they were being underpaid since they were receiving a wage which was lower than that which was ordinarily paid to other employees in the same grade within the same company. The arbitrator who heard the matter concluded that by not consulting the employees on the bonus scheme, the employer had violated their right to be heard. The Labour Court also agreed with the arbitrator that an unfair labour practice had been committed in implementing the bonus scheme without prior consultation.

In the Supreme Court, the employer argued that there was nothing wrong with implementing the bonus scheme since the employees were being paid a minimum basic wage component in terms of the relevant Collective Bargaining Agreement. The court’s position was that there was nothing wrong with coming up with a bonus scheme for the benefit of the employees. It stated:

“A bonus is what can generally be termed a benefit. The implication that can be drawn is that the grant of a bonus per se is not illegal and an employer cannot generally be held to have committed an unfair labour practice by setting up a bonus scheme. The rationale to this principle is that every employee has the right to a performance-based incentive and if they work well, they will be paid well without any reference being made to their class, race, tribe, or any other factor on the basis upon which discrimination can competently be committed. Thus, the grant of a performance-based bonus is therefore not proscribed by law.”[26]

The remarks by the Supreme Court in this case are in tandem with the Labour Act in that a bonus is legal and fully recognised in terms of Zimbabwean law.[27] The court indicated that it is in very limited circumstances that it would interfere with the exercise of discretion by an employer unless the employer has acted on a wrong principle.[28] It recognised the law that was outlined in First Mutual Life Ltd. v Muzivi SC 9/2007. It recognised the need for an employer to implement a bonus scheme after informing the employees of the same.[29] On the basis that the employees had not been informed about the implementation of the bonus scheme, the Supreme Court accepted the Labour Court’s judgment that the whole scheme was illegal.[30] It also ruled that because the scheme was illegal, the Labour Court could not have lawfully proceeded to order back pay for the aggrieved employees based on the unlawful scheme.

The case thus illustrates the importance of communicating a bonus scheme to the employees in terms of Section 25A of the Labour Act. It also shows that a bonus scheme that is implemented without the involvement of the affected employees can be impugned by the court.

South African Legal Position

It is interesting to note that how the bonus is treated in South Africa is not far off from how Zimbabwean law views bonuses and their payment. The discretionary nature of the bonus in South Africa is also respected. We believe that the Labour law in South Africa, may expand and aid our understanding of bonuses and how they may be treated from a Zimbabwean labour law perspective.

Labour Relations Act of South Africa[31]

Like Zimbabwean law on the subject, there is no statutory obligation that is placed by South African Acts of Parliament compelling employers to pay a bonus and to have one in the first place. As will be gleaned below, South African statutory law requires that employees, through their representatives, be consulted before the issues of bonuses are considered and implemented. What follows is a review of the two important sections found in the Labour Relations Act of South Africa in connection with bonuses and payments thereof.

Section 84 of the Labour Relations Act of South Africa

Section 84 of the Labour Relations Act of South Africa provides for specific matters that an employer must consult with a workplace forum. A workplace forum is the South African equivalent of a Zimbabwean worker’s committee. Issues connected to the “criteria for merit increases or the payment of discretionary bonuses” should go through the consultation process before they are implemented.[32] As discussed above, this position is also found in the Zimbabwe set-up where an employer must consult a works council before implementing a bonus.[33] As already mentioned, in a matter of T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18 failure to consult a works council can result in a bonus scheme being deemed unlawful.

Section 87 of the Labour Relations Act of South Africa

The section simply states that on being elected to office, a workplace forum can arrange a meeting with the employer to review the “criteria for merit increases or the payment of discretionary bonuses.”[34]  The section does not provide for any other obligation on the part of the employer.

South African Case LawApollo Tyres v Commission for Conciliation, Mediation and Arbitration and Others[35]

The case determined that payment of a bonus is deemed a benefit in terms of the Labour Relations Act of South Africa (LRA). The court determined that the term “benefit” under the LRA refers to any existing advantages or privileges that an employee is entitled to. Such benefits can be based on a contract, law, or policy/practice at the employer’s discretion. The court noted:

“In my view, the better approach would be to interpret the term benefit to include a right or entitlement to which the employee is entitled (ex contractu or ex lege including rights judicially created) as well as an advantage or privilege which has been offered or granted to an employee in terms of a policy or practice subject to the employer’s discretion. In my judgment “benefit” in section 186 (2)(a) of the Act means existing advantages or privileges to which an employee is entitled as a right or granted in terms of a policy or practice subject to the employer’s discretion.”[36]

The case involved an early retirement policy which an employee could, at the discretion of the employer, opt for. The employer in this instance disallowed the employee from retiring early, for flimsy reasons and ended up treating the employee unfairly.[37] The employer also threatened the employee for demanding the early retirement package despite it being a benefit awarded to other employees. The court could not condone the exercise of the employer’s discretion in such a degrading and discriminatory manner. The observation of the court in this case applies with equal force to the issue of bonuses. The discretion to give or not to give an employee a bonus must not be arbitrary and motivated by inappropriate motives.

Public Servants Association obo Motsekoa v Department of Sports, Arts and Culture[38]

In this important case, the employees were not happy with how the employer determined and paid them bonuses.[39] The dispute concerned a bonus that had been awarded between 2010 and 2011. Before this period, bonus payments were made without any issues arising from the scheme.[40] For the 2010 and 2011 bonuses, the department implemented measures to ensure that the bonus paid stays within the set limit of 1.5% of the approved wage bill budget. The employee’s challenge was that a body that was constituted to ensure the implementation of these measures was not there in terms of the provisions governing the bonus.  The question before the court was whether a review of the employer’s actions was an appropriate procedure to follow. The court accepted that how an employer chooses to exercise its discretion will always be challenged under the provisions that deal with unfair labour practices.[41] This case illustrates that dispute resolution mechanisms of conciliation and arbitration will always be available to an employee who is aggrieved by the exercise of the employer’s discretion whether this is  bonus-related or not.

Aucamp v South African Revenue Services[42]

The court held that, even if a benefit is subject to certain conditions and the employer’s discretion, an employee can still seek to have instances where they were unfairly deprived of that benefit adjudicated in terms of unfair labour practice proceedings. Therefore, even if the benefit is not explicitly guaranteed in the employment contract, the employee can still claim it as an unfair labour practice if they can demonstrate that they were unjustly denied it.

The Bottom Line

We observe that the Zimbabwean and South African legal position regarding the payment of bonuses to employees is somewhat similar. The statutes for both countries do not strictly regulate the payment of bonuses. All is left to the discretion of the employer. Once the employer chooses to implement a bonus scheme, either as a 13th cheque or as a performance-related bonus scheme, there is a legal obligation to consult with the employee representatives in the employment setup. Failure to render such consultation can prove to be problematic for the entire bonus scheme.

We also note that whilst bonus payment is discretionary, the discretion must not be exercised arbitrarily or unfairly. The case of Apollo Tyres v Commission for Conciliation, Mediation and Arbitration and Others clearly illustrates that bonus issues, even when they are discretionary, can still be adjudicated upon in terms of the laws provided under the Labour Act. In Public Servants Association obo Motsekoa v Department of Sports, Arts and Culture the position was emphasized with the court positing that abuse of employer’s discretion in bonus issues can be adjudicated under the unfair labour practice jurisdiction that is reserved for ADR (conciliation and arbitration) mechanisms in terms of the labour laws of both countries.

An analysis of the laws of South Africa and Zimbabwe also points to the need for employers to come up with clear bonus schemes and policies that are adequately communicated to the employees. This can be through the works council and workers committee forums available in an employment setup. This communication enhances legal certainty and prevents instances of unnecessary disputes and wastage of legal costs.

[1]              All rights reserved. No part of this article may be reproduced or utilised in any form or by any means, electronic or mechanical, including but not limited to photocopying, recording or by any information storage and retrieval system, without permission in writing from the author.

[2]              Taurai Mrewa is an academic writer who shares his expertise in labour law. Through his articles, he aims to equip employers and employees with knowledge about labour laws, fostering a harmonious working environment. Please note that the views expressed in these articles are his own and not affiliated with any organization.

Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this article and the website above (https://taumrewa.co.zw/blog) site is for general informational purposes only. Readers of this article and website should contact their attorney to obtain advice on any particular legal matter.

[3]              Herald, “Bonus: Chinamasa Speaks Out” (20 April 2015), https://www.herald.co.zw/bonus-chinamasa-speaks-out/, <Accessed: 2 December 2023>.

[4]              Voice of America, (12 January 2016) “Non-Payment of 2015 Bonuses Irks Zimbabwe State Workers”, https://www.voazimbabwe.com/a/zimbabwe-bonus-payments/3141951.html, <Accessed: 2 December 2023>.

[5]              The Herald (1 January 2016), Civil Servants meet the RBZ Chief, call off planned strike, https://www.herald.co.zw/civil-servants-meet-rbz-chief-call-off-planned-strike-bonus-still-coming-constant-pay-dates-promised/<Accessed: 2 December 2023>.

[6]              The Herald, (20 April 2015) “Bonus: Chinamasa Speaks Out”, https://www.herald.co.zw/bonus-chinamasa-speaks-out/, <Accessed: 2 December 2023>.

[7]              The Sunday Mail,(17 September 2017) “No bonuses for private sector”, https://www.sundaymail.co.zw/no-bonuses-for-private-sector, <Accessed 2 December 2023>.

[8]              The Herald, (6 September 2017) “Workers drag NSSA to court over bonus”, https://www.herald.co.zw/workers-drag-nssa-to-court-over-bonus/, <Accessed 2 December 2023>.

[9]              Section 12(2)(h) of the Labour Act provides: “(2) An employer shall, upon engagement of an employee, inform the employee in writing of the following particulars— (h) particulars of any bonus or incentive production scheme”. (Own Emphasis)

[10]             Section 12A(5)(c) of the Labour Act provides: “(5) All remuneration shall be accompanied by a written statement showing— the component of the remuneration representing any bonus or allowance.” (Own Emphasis)

[11]             Section 25A(5)(e) of the Labour Act provides: “Without prejudice to the provisions of any collective bargaining agreement that may be applicable to the establishment concerned, a works council shall be entitled to be consulted by the employer about proposals relating to any of the following matters— the criterion for merit increases or payment of discretionary bonuses”

[12]             Section 25A(6) of the Labour Act.

[13]             T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18 at paragraph 8 the court remarked that: “It is my view that the finding by the court a quo cannot be assailed because employees have a right to be informed about decisions pertaining to their employment conditions of service even if the decisions are made in the exercise of an employer’s discretion. The appellant as the employer had a duty to notify all employees about its decision to start a performance-based bonus scheme before implementing it.”

[14]             See Rodwell Jariremombe and Others v NSSA HH 402/2018.

[15]             Minerals Marketing Corporation of Zimbabwe v Mvududu & 5 Others LC/H/51/2014.

[16]             In Tendai Bonde v National Foods Limited SC 57/20 the court remarked: “The court found that for the period January – June 2016 during which the incentive bonus was payable, the applicant had an existing misconduct case and that he was therefore ineligible to get the incentive bonus in terms of the conditions of the scheme. The court also found that the incentive scheme was not an entitlement and that it was non-contractual. It therefore found that, as a court, it could not, in these circumstances, impose an obligation on the employer to pay the incentive bonus in all cases as that would be tantamount to rewriting the contract of employment for the parties.”

[17]             See T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18.

[18]             Rodwell Jariremombe and Others v NSSA HH 402/2018.

[19]             It’s important to note that in terms of Nhari vs Mugabe and others SC161/20 the High Court can no longer exercise its jurisdiction over Labour Matters.

[20]             Rodwell Jariremombe and Others v NSSA HH 402/2018 at page 29.

[21]             Rodwell Jariremombe and Others v NSSA HH 402/2018 at page 30.

[22]             First Mutual Life Ltd. v Muzivi SC 9/2007

[23]             See also Clan Transport Company (Pvt) Ltd. v Clan Transport Workers Committee SC 1 /02 wherein the court noted: “The respondents were not entitled to an award under this head since bonus is usually performance-related unless evidence led reveals the contrary and no such evidence was led.”

[24]             See CIMAS Medical Aid Society v Nyandoro SC 6/16 at page 7 wherein the court remarked: “Reinstatement is a remedy which is used to place an unfairly dismissed employee into a position he would have been had the unfair dismissal not been committed.”

[25]             T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18.

[26]             T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18 at page 6.

[27]             See sections 12, 12A and 25A of the Labour Act (Chapter 28:01).

[28]             T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18 at page 7.

[29]             T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18 at page 8.

[30]             T. M. Supermarkets (Private) Limited v Itayi Nkomo & 2 Others SC 26/18 at page 8.

[31]             Act Number 66 of 1995.

[32]             Section 84(1)(h) of the Labour Relations Act of South Africa provides: “Unless the matters for consultation are regulated by a collective agreement with the representative trade union, a workplace forum is entitled to be consulted by the employer about proposals relating to any of the following matters- (h) criteria for merit increases or the payment of discretionary bonuses.”

[33]             Section 25A(5)(e) of the Labour Act (Chapter 28.01)

[34]             Section 87(1)(a) of the Labour Relations Act of South Africa.

[35]             Apollo Tyres v Commission for Conciliation, Mediation and Arbitration and Others (2013) 34 ILJ 1120 (LAC).

[36]             Apollo Tyres v Commission for Conciliation, Mediation and Arbitration and Others (2013) 34 ILJ 1120 (LAC) at paragraph 50.

[37]             The court in this case observed that: “The appellant acted in a deplorable manner towards Hoosen. When she approached Van der Walt and asked him whether she could get a legal opinion on the issue of managerial discretion he threatened her, no he in fact intimidated her. When the referral documents were served on the appellant, she was told to leave with immediate effect. So despicable was its conduct that a farewell party that was arranged for her was cancelled. That is not the way to treat an employee who has, by all accounts, given more than 24 years of dedicated and excellent service. The appellant ought to be mulcted in costs.”

[38]             Public Servants Association obo Motsekoa v Department of Sports, Arts and Culture (2015) 36 ILJ 808 (BCA).

[39]             Public Servants Association obo Motsekoa v Department of Sports, Arts and Culture (2015) 36 ILJ 808 (BCA) at paragraph 1.

[40]             Public Servants Association obo Motsekoa v Department of Sports, Arts and Culture (2015) 36 ILJ 808 (BCA) at paragraph 13.

[41]             Public Servants Association obo Motsekoa v Department of Sports, Arts and Culture (2015) 36 ILJ 808 (BCA) at paragraph 50.

[42]             Aucamp v South African Revenue Services [2014] 2 BLLR 152 (LC).

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