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MATERNITY LEAVE AND FIXED TERM CONTRACTS

Introduction

Recently, a colleague of mine brought a legal question involving maternity leave and renewal of fixed-term contracts. The facts surrounding this question can be summarised as follows:

An employee has been signing fixed-term contracts from 2017. She has applied for maternity leave and the company is now of the position that it won’t renew the contract because it doesn’t want to pay maternity leave. The employee has been told that she can always come back after giving birth to her child. The company intends on hiring someone to replace such an employee during the period of maternity leave.

I will argue that employees on fixed-term contracts are entitled to maternity leave, in the same manner, the right is conferred to employees on permanent contracts. I will also argue that this case points to systematic discrimination based on pregnancy and that the employer in this instance is under an obligation to renew the fixed term contract to ensure that the employees right to maternity leave is upheld. In the last section, I will explore the legal remedies that can be available to an employee who is seized by such a daunting situation.

Discrimination

Unfairly discriminating against employees based on gender and pregnancy is prohibited by the Labour Act (Chapter 28.01). Discrimination has been defined as the treatment of employees favourably or unfavourably based on various grounds. When the grounds for discriminating against an employee are based on inherent job requirements there is no unfair discrimination. Problems arise when the grounds for discrimination are explicitly prohibited by an act such as the Labour Act.

The Labour Act outlaws the discrimination of employees based on gender and pregnancy. Section 5 (1) of the Labour Act[i] reads as follows:

“No employer shall discriminate against any employee or prospective employee on grounds of race, tribe, place of origin, political opinion, colour, creed, gender, pregnancy, HIV/AIDS status…”

It is submitted that the moment an employee’s contract is not renewed simply because she has fell pregnant a case of unfair discrimination on one of the prohibited grounds would have occurred. The pregnant employee is going to be treated less favourably compared to those employees who are not pregnant. This unfair treatment is what section 5(1) was created to cure. It is argued that based on the facts presented above, the employer indeed discriminated against the female employee. It follows that this action alone will be accompanied by various legal consequences. Such consequences will be discussed under the section on remedies.

Maternity Leave Provisions

The Labour Act provisions on maternity leave are important in resolving the case at hand. The most important part of these provisions is Section 18(1) of the Labour Act which reads as follows:

“Unless more favourable conditions have otherwise been provided for in any employment contract or in any enactment, maternity leave shall be granted in terms of this section for a period of ninety-eight days on full pay to a female employee who has served for at least one year.”

Section 18(1) is clear cut. It provides that an employee who has served the employer for a period of one year is entitled to 98 days of maternity leave. The employee mentioned in this section, it is submitted, is one on either a fixed-term contract or one on a permanent contract. What is decisive is whether the employee has served the employer for a period of at least a year in order to qualify for maternity leave.

From the facts in casu, the employee has been on a fixed-term contract from 2017 to 2019. More than a year has elapsed which means that the employee qualifies for paid maternity leave. This picture would have been totally different if the employee’s continuous service was less than one year.

It is important to note that in terms of the said section, employers can provide for better terms in a contract of employment or another enactment. Such better conditions should not relegate the position in the act. This means that employers can provide for conditions such as lowering the qualifying service for maternity leave or coming up with long periods of maternity leave.

It is thus vehemently argued that Section 5 (1) (Anti-Discrimination Provision) when read together with Section 18 (1) (Maternity Leave Provision) allow for employees on fixed-term contracts to be afforded paid maternity leave without any derogation. What this means is that that a fixed-term contract should be extended in order for an employee to be afforded an opportunity to enjoy paid maternity leave as found in the labour act. Failure to extend such a contract and terminating in the grounds of pregnancy will come with serious legal ramifications.

Non-Renewal of a Fixed Term Contract

The non-renewal of a fixed term contract can have serious repercussions on the employer if it does not take into consideration section (12)(3)(b) of the Labour Act.

The section reads as follows:

“An employee is deemed to have been unfairly dismissed—

(a) ….

(b) if, on termination of an employment contract

of fixed duration, the employee—

(i) had a legitimate expectation of being re-engaged;

and

(ii) another person was engaged instead of the employee”.

From the facts provided at the start of the article, it has been pointed out that the employer in question intends to hire labour to replace those employees whose contracts are not renewed. Further, the employer seems to be suggesting that but for the pregnancy, the contracts could have been extended. This shows that the employees had the legitimate expectation of having their contracts renewed. In the circumstance, it is risky for the employer to decide to terminate the contract citing the pregnancy and proceed to hire another employee.

Labour Amendment Act, 2015

The Act which came into force in 2015 came with provisions that were meant to cure the anomaly that arises when a fixed-term employee is denied an opportunity to enjoy benefits that accrue to employees on permanent contracts despite the continuous renewal of the contract.

The important provision is section 12 (3a) which provides as follows:

“A contract of employment that specifies its duration or date of termination, including a contract for casual work or seasonal work or for the performance of some specific service, shall, despite such specification, be deemed to be a contract of employment without limitation of time upon the expiry of such period of continuous service as is-

(a) fixed by the appropriate employment council; or

(b) prescribed by the Minister if there is no employment council for the undertaking concerned, or where the employment council fixes no such period;

and thereupon the employee concerned shall be afforded the same benefits as are in this Act or any collective bargaining agreement provided for those employees who engaged without limit of time.”

The Labour Amendment Act provisions point to the need for Labour Practitioners, HR Practitioners and lawyers alike to be aware of the legal provisions in specific industries. At the time of writing this article, the minister has not fixed the period of continuous renewal of fixed-term contracts in compliance with this provision. Various industries have however prescribed the number of permissible renewals.

Be that as it may, it is submitted that nothing in the labour act or any provisions preclude the benefit of maternity leave to be afforded to employees on fixed-term contracts. As already mentioned, non-renewal of contracts of fixed-term duration based on pregnancy may result in unfair discrimination allegations as well as the evocation of the doctrine of legitimate expectation all which result in serious legal problems for the company.

Available Legal Remedies

From the legal provisions discussed above, it is argued that the employee has a wide range of remedies available to her. These range from criminal remedies, civil or labour law-related remedies and constitutional remedies. Some of these remedies discussed in this section.

Once is accepted that by failing to renew the employee’s contract based on her application for maternity leave is tantamount to discrimination, then remedies to cure this discrimination can be evoked. One of these remedies is provided for under section 5 (3) which reads:

“Any person who contravenes subsection (1) or (2) shall be guilty of an offence and liable to a fine not exceeding level eight or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment”.

It is submitted that Section 5(3) points to the fact that violating discrimination provisions may warrant criminal prosecution. Such a prosecution might result in the payment of a fine or the imprisonment of the employer. This is not the only remedy under the section. Other remedies are also provided for.

The section provides for other remedies as follows under subsections 4 and 5:

“(4) Without prejudice to any other remedy that may be available to him in any competent court, any person who is aggrieved by any act or omission of an employer in contravention of subsection(1) shall be entitled to claim or apply under Part XII, as the case may be, for either or both of the following remedies—

(a) damages from the employer for any loss caused directly or indirectly as a result of the contravention;

(b) an order directing the employer to redress the contravention, including an order to employ any person, notwithstanding that the vacancy in question has already been filled and notwithstanding that the employer may be liable to any claim arising from the need to dismiss or terminate the services of any other employee who has been engaged.”

“(5) Without prejudice to any other remedy that may be available to him in any competent court, any person who is aggrieved by any act or omission of any person in contravention of subsection (2) shall be entitled to claim or apply under Part XII, as the case may be, for either or both of the
following remedies—

(a) damages from such person for any loss caused either directly or indirectly as a result of the contravention;

(b) an order directing such person to redress the contravention.”

it is clear that discriminating against an employee can have far-reaching consequences. Besides the criminal sanction prescribed under the section under consideration, an employee can be entitled to damages. The same employee is also entitled to a court order directing that she be retained by the employer. What is important to note is that section 5 does not preclude the employee from pursuing other remedies provided for in the Labour Act or the Constitution.

Conclusion

From the foregoing discussion, it is submitted that employees on fixed-term contracts and those on permanent contracts should be afforded the same maternity leave conditions. Section 18 of the Labour Act does not distinguish between maternity leave given to a fixed-term employee and that which is afforded an employee on a permanent contract. Once the period of qualifying service has been achieved, the employee is entitled to the right conferred by the act. In certain circumstances, it is argued, it might be necessary to extend a fixed-term contract in order to afford the employee an opportunity to enjoy this maternity leave. Failure to renew such a contract, will depending on the conditions, amount to discrimination and might result in complaints of unfair dismissal.

SOURCES

[i] Labour Act (Chapter 28.01)

2,599 Views

REFRAINING FROM ATTENDING A DISCIPLINARY HEARING

One of the biggest mistakes an employee can ever make when accused of having breached company rules is to abscond a disciplinary hearing. Practitioners dealing with disciplinary issues can also fall into the trap of not properly handling situations that arise when an accused employee refrains from attending a disciplinary hearing. Employers and employees, alike, should be well versed with the legal implications of failing to attend a disciplinary hearing. In this article, the serious consequences that flow from this wing of our labour law will be discussed. The right to be heard which forms the foundation of every disciplinary process will be explored for in the first place.

The right to be heard

The cornerstone of every hearing, whether in criminal or civil spheres, is the right to be heard. This right is encapsulated in the maxim audi alteram partem translated to “hear the other side”. In terms of this principle, an impartial tribunal must hear a dispute and come up with an impartial determination/resolution (See the article on impartiality). This principle also entails that an employee must be arraigned before a disciplinary tribunal and be given an opportunity to state his or her case. The net effect of this principle is that when it is violated or in other words if the employee is not awarded the opportunity to be heard, the resultant proceedings may be impugned by the courts.

So important is the audi alteram partem principle that our courts in Taylor v Minister of Education & Anor [i] highlighted that:

“The maxim audi alteram partem expresses a flexible tenet of natural justice that has resounded through the ages. One is reminded that even God sought and heard Adam’s defence before banishing him from the Garden of Eden. Yet the proper limits of the principle are not precisely defined. In traditional formulation, it prescribes that when a statute empowers a public official or body to give a decision which prejudicially affects a person in his liberty or property or existing rights, he or she has a right to be heard in the ordinary course before the decision is taken.”

The view expressed by the courts in Zimbabwe is also observed by courts of other jurisdictions. In this regard in the Labour Court of South Africa and, in a matter between Kock and Another v Department of Education Culture & Sport Province of the Eastern Cape and Others [ii] the court noted that:

“For these reasons, I found that the principles of natural justice had not been observed. Failure by the Department and the respondents to apply the audi alteram partem rule has constituted a procedural impropriety vitiating the agreement in so far as it affected Mr Kock. Accordingly, the argument advanced on behalf of the respondents had to fail.”

Given the importance attached to this principle, the question that begs a response is, what then are the consequences attached to an employees absence from a hearing? This will be dealt with within the next section.

Waiver of the right to be heard

The importance of the right to been outlined above. Despite being important in legal proceedings, this right can be waived or be lost in certain circumstances. Failure to attend a hearing is one of the ways in which the right to be heard can be lost. It is important to note that this failure must be imputed on the employee for the same to lose the right.

The matter between Zesa Enterprises (Private) Limited v Aloyce Roy Stevawo [iii] clearly explains how the waiver of the right to be heard can emanate from the failure by the employee to be present at a hearing. The court in this matter decisively remarked as followed:

“The facts before the court a quo established beyond question that the respondent was given notification of the hearing date. He successfully negotiated for a date convenient to himself but defaulted on the date of hearing. His request for a further compromise by email could not absolve him from attending the hearing unless it was granted by the employer. By deliberately absenting himself from the hearing the respondent irrevocably waived his right to be heard.”

This matter shows that when an employee has a valid reason for not attending a disciplinary hearing such a reason will have to be communicated to the employer. Once communicated the employer must acknowledge the reason and excuse the employee from not attending the hearing. In practice, the disciplinary committee or official is the person who receives such communication and who then excuses the employee. The role of HR in this instance is to facilitate the communication and the documentation that will accompany such permission.

Evidentiary Burden

One who alleges that an employee has deliberately absented himself or herself from a hearing has the onus of proving the same. Evidentiary burden entails an obligation to produce the requisite evidence.

This obligation points to the need for practitioners handling disciplinary proceedings to keep adequate documentation. An important document in this regard is the “hearing notification”. This is the document that tells the employee to attend a hearing at a certain place and time and to respond to the allegation so raised. Another important document is the “hearing postponement” document. This is the document that will show that a hearing has been postponed, the reasons thereof as well as the date and place of the next hearing. These documents differ depending on the industry and institution but the principles behind them remain the same. These are the documents that will show whether an employee was aware of the hearing and whether the failure to attend the hearing can be imputed on the same employee.

To illustrate the importance of such documentation I will refer to a matter between Zesa Enterprises (Private) Limited v Aloyce Roy Stevawo. The court took notice of the contents of a hearing notification and realised that:

The notice to appear before the disciplinary committee dated 14 December 2011 advised the respondent of his rights and cautioned him that in the event of him defaulting, the hearing would proceed in his absence.

It is submitted that in the absence of the documentation referred to in this matter the employee would have managed to get away with a clear default. That said, I will hasten to mention that Zesa Enterprises (Private) Limited v Aloyce Roy Stevawo should not be used as authority for failing to recognise genuine reasons put forward by employees when they cannot attend a disciplinary hearing. This aspect will be dealt with next.

The need to trade with caution

The above sections highlighted that a right to be heard is imperative in disciplinary proceedings and that this right can be waived if the employee is at fault. In this section I will reconcile what has been discussed so far with the remarks by the court in the Aloyce Roy Stevawo case when it said:

“His request for a further compromise by email could not absolve him from attending the hearing unless it was granted by the employer.” (Emphasis Added)

Does this mean that the court/tribunal can ignore any reason put forward by the employee unless permitted by the employer? The answer is no, it is submitted.

Factors such previous conduct of the employee in question and the actual reason put forward by the employee will have to be taken into consideration in determining whether the permission to be absent from a hearing is to be granted. These are not the only reasons. What is needed is for the disciplinary authority and practitioners dealing with the discipline to approach the employee’s absence and the reasons put forward with an open mind. If the reason put forward by the employee is such that one can infer that the situation was beyond the control of the employee, then it will only be fair for the hearing not to proceed and foster the audi alterum paterm rule as discussed above.

Conclusion

The discussion in this article dealt with situations were employees decide not to attend a disciplinary hearing. The effect of this absenteeism has also been highlighted together with the need to handle such absenteeism with caution and an open mind. Whilst the employer has the right to accept or refuse the reasons put forward, for not proceeding with a hearing, it is always important to trade on the side of caution. This is especially true if the employee is facing circumstances beyond his or her control or if the employee is resolving issues to do with legal representation.

SOURCES

[i] Taylor v Minister of Education & Anor 1996 (2) ZLR 772

[ii] Kock and Another v Department of Education Culture & Sport Province of the Eastern Cape and Others (ZALC 47 (30 March 2001)

[iii] Zesa Enterprises (Private) Limited v Aloyce Roy Stevawo (Sc 29/2017)

2,176 Views

Muparaguda v Commercial Workers Union of Zimbabwe (SC 55/18)

“There having been no irregularity in the manner in which he uplifted the suspension, the upliftment of the suspension was perfectly lawful and binding. An employer who elects to pay an employee during the course of disciplinary proceedings voluntarily assumes an obligation from which he cannot unilaterally wriggle out without first re-suspending the employee without pay. Although it was within the appellant’s discretion to re-suspend the respondent without pay, it did not exercise that option until the contract was lawfully terminated on 26 April 2013. For that reason, the judgment of the court a quo upholding the arbitral award of 26 April 2013 cannot be faulted.”

Introduction

At times it becomes necessary to suspend an employee without pay in order to carry out an investigation into an allegation that the employee has breached workplace rules. This is called a precautionary suspension. There are also instances where an employee will have to be suspended as a function of a penalty imposed in a hearing. This is called punitive suspension. Muparaguda v Commercial Workers Union of Zimbabwe deals with a precautionary suspension. It answers the daunting legal question as to whether an employee is entitled to remuneration between the time of suspension and the time of his dismissal.

Facts

The facts of this case can be summarised as follows:

The employee, Muparaguda, was employed on the 19^th of January 2009.
On 12 October 2009, he was suspended without pay following allegations of breach of the National Employment Code of Conduct, SI 15 of 2006.
On 3 November the hearing official referred the matter to the General Secretary noting that he was unable to finalise the matter.
The General Secretary wrote to the employee informing him that his suspension without pay had been uplifted and that he was now an employee on suspension with pay.
On 30 November 2009, the General Secretary dismissed the employee pursuant to a request by the hearing official who had indicated that he could not finalise the matter.
The matter was brought before a Labour Officer who made a ruling nullifying all the proceedings. He proceeded to hear the matter afresh and made a ruling that the dismissal was unfair for want of compliance with substantive and procedural fairness requirements of the National Employment Code of Conduct, SI 15 of 2006.
The date of award, 26 April 2013, was deemed to be the effective date of the employee’s termination and that he be paid his salary and benefits from the date of suspension to the date of the award. The appellant was not happy with the verdict given by the labour officer and appealed to the Labour Court.
The employee was also not satisfied with the verdict given by the Labour Court thus founding an appeal to the Supreme Court.
At the Supreme Court, the only legal question was whether the employee was entitled to a salary from the date of suspension to the date of lawful dismissal, from 12 October 2009 to 26 April 2013.

Reasoning

The Court reasoned that there was nothing wrong with the General Secretary altering the suspension from being an employee on a suspension without pay to an employee on a suspension with pay. This was considered to be an administrative function and not a disciplinary action. This administrative function was permissible in terms of the constitution of the employer as the General Secretary had the discretion to suspend an employee with or without pay.

The court thus reasoned that when the administrative action of the General Secretary was put into effect, the status of the employee changed to that on suspension with pay. This, therefore, meant that when the arbitrator nullified the proceedings, the parties reverted to the status quo ante with the employee being one on a suspension with pay. The court thus decisively remarked as follows:

“Thus, the respondent could not have reverted to being an employee on suspension without pay because that status no longer existed.”

Verdict

The appeal was dismissed.

Own Comment

This judgment was well reasoned, and the legal principles articulated in this case are clear cut. If there are irregularities necessitating the nullification of disciplinary proceedings, the employee reverts to the status he held before the nullification of the proceedings. In the present case, the last status the employee held was that of an employee on suspension without pay. This was the status he reverted to. This was although the employee had been previously suspended without pay and benefits at one point.

1,512 Views

Alpha Madzima v Marange Resources (Private) Limited SC12/18

“It is settled in our law that an appellate court must be slow in interfering with the discretion exercised by a lower court. It must appear that some error has been made in exercising the discretion. If the primary court acts upon a wrong principle, if it allows extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not into account some relevant considerations, then its determination should be reviewed and the appellate court may exercise its own discretion in substitution, provided always it has the material for so doing.”

Introduction

Alpha Madzima v Marange Resources (Private) Limited dealt with an employee charged with “act or conduct inconsistent with the fulfillment of express or implied conditions of his contract of employment” in terms of the National Code (S.I 15 of 2006). It demonstrates the fact that the act or conduct should go to the root of the employment relationship to warrant dismissal. This happens when an employee does not fulfill his or her fiduciary duty to further the interests of the employer. This case also demonstrates the discretion an employer has in dismissing an employee who acts in a manner that is incompatible with his contract of employment.

Facts

The facts which led to the current dispute can be summarised as follows:

The appellant was employed as a Finance Manager in 2010.
In October 2012, when events giving rise to the current dispute arose the appellant was acting as the Chief Financial Officer for the respondent.
On 3 October 2012, the appellant received a phone call from Tetrad requiring him to do a letter of undertaking on behalf of one of the company’s suppliers called DD Mining and General Suppliers.
A Draft Letter of Undertaking emanated from Tetrad and had the effect of guaranteeing that Marange Resources (Private) Limited will irrevocably and unequivocally direct all payments due to the supplier to the account held by Tetrad. The appellant consulted his superior who gave him the go-ahead to put the letter of undertaking on the company’s letterhead and to sign it.
The major problem with this whole transaction was that DD Mining and General Suppliers was never the supplier of the respondent.
In September 2013, the police brought to the attention of the appellant and his superior an alleged fraud relating to orders financed by Tetrad in favour of DD Mining and General Supplies.
The appellant was charged with fraud and acting in a manner that is inconsistent with the fulfillment of express or implied conditions of his contract of employment in terms of Labour (National Employment Code of Conduct) Regulations, 2006, SI 15 of 2006.
He was found guilty and dismissed for acting in a manner that is inconsistent with the fulfillment of express or implied conditions of his contract of employment.
An appeal was lodged with a Labour Officer and finally with an arbitrator following a certificate of no settlement. The Arbitrator found that the employee was guilty but prescribed a final warning letter.
Not happy with the Arbitrators finding the appellant appealed to the Labour Court. At the Labour Court, the arbitrator’s findings were set aside, and the dismissal was confirmed.
The decision of the Labour Court thus founded the Supreme Court Appeal.

Reasoning

The two legal questions before the Supreme Court were whether the appellant was guilty of the offense charged as well as whether the Labour Court should have interfered with the decision of the Arbitrator.

In finding that the appellant was guilty, the Supreme Court noted that employer and employee relationships are based on the principle that the employee should safeguard the interests of the employer. The appellant had a duty to advise the respondent company finance department which he failed to do competently. The court noted that by signing a letter of commitment on behalf of a third party the employee was not acting to further the interests of his employer. The court thus remarked as follows:

“The Appellant conceded that the letter that gave rise to the litigation between the parties was written at Tetrad’s bidding and initiative. The contents of the letter were authored by Tetrad. The appellant was an employee of the respondent and not of Tetrad. The appellant’s conduct in writing the letter and signing it amounts to him acting in pursuance of the interests of a third party, which third party is not included in the employer-employee relationship that he had with the respondent. This is so because by appending his signature to the letter of undertaking, the appellant vouched for the truthfulness of the contents of the letter. He vouched for the correctness of the allegations in a letter that did not emanate from or benefit his employer. In addition, he did this without ascertaining the truth of the contents of the letter in circumstances where other departments of the respondent company would have been in a position to advise him accordingly.”

The essence of the above remark was to demonstrate the circumstances under which an “act or conduct inconsistent with the fulfillment of express or implied conditions of his contract of employment” can go to the root of the employment relationship to warrant dismissal. The appellant should not have signed the undertaking in the first place. The undertaking did not further the interests of the employer in any way. It also breached the trust and integrity required of an employee who is in the appellant’s position. The court had no option other than to confirm, that under the circumstances, the appellant was guilty as charged.

The court confirmed the legal position that the penalty to be imposed for workplace violations entails an exercise of the discretion by the employer. It set aside the ruling by the arbitrator that had found that the employer’s discretion to terminate had not been exercised in a judicial manner. In emphasising the discretion of the employer to dismiss the employee under the circumstances the court decisively noted:

“The following excerpt from Standard Chartered Bank Zimbabwe Limited v Michael Chapuka (supra) at page 7 of the judgment, now quoted more fully, is of assistance in the proper determination of matters of this nature:

“Conduct which is found to be inconsistent or incompatible with the fulfillment of the express or implied conditions of a contract of employment goes to the root of the relationship between an employer and an employee, giving the former prima facie right to dismiss the latter.”

It was on the basis of the above reasoning that the court realised that the employee had been correctly dismissed.

Judgment

The appeal was dismissed. This meant that the appellant’s dismissal was confirmed.

1,736 Views

MUTUAL AGREEMENT TO TERMINATE A CONTRACT OF EMPLOYMENT

It is accepted at law that if an employment relationship can commence by agreement, its termination can also result from an agreement between the parties. Our Statutory law recognises mutual agreements as one of the methods of ending employment relationships. The legal principles applicable in such separations will be discussed in this article. Case law from South African and Zimbabwean courts will be used to illustrate the far-reaching consequences of such terminations.

Introduction

Statutory Provisions

The statutory provisions that provide for mutual separations include Statutory Instrument 15 of 2006 and Labour Amendment Act, 2015. Collective bargaining agreements for various industries also provide for mutual separations.

Statutory instrument 15 of 2006 (The National Employment Code), on clause 5 (c) states that:

“No employer shall terminate a contract of employment with an employee unless — the employer and employee mutually agree in writing to the termination of the contract”.

In addition, the Labour Amendment Act, 2015 on section 12 (4) reads;

“No employer shall terminate a contract on notice unless;

a….

b. the employer and employee agree to mutually agree in writing to the termination of the contract.”

What is common in these provisions is that a mutual agreement to terminate an employment contract should be in writing all the time. Verbal agreements are null and void. It also follows that since this is a mutual agreement both parties should show that they agree to the terms contained in their document. In normal situations, both parties sign the agreement in the presence of witnesses.

Legal Implications

Mutual Separation as a waiver of rights

Several legal ramifications emanate from mutually agreeing to the termination of a contract. In the first instance, a mutually agreed termination overrides all other rights that an employee might have in terms of the law. Once it has been agreed, no party can renege on the terms and conditions in the document that constitutes the agreement. In recognising the fact that mutually agreed terminations have such an effect, the court in Lawrence Shumbayaonda v Madhatter Mining (Private) Limited[i] remarked:

“If he was entitled to cash-in-lieu on three months’ notice why would he signed an acknowledgement of debt of a lesser amount? In my view this shows that the parties agreed to terminate mutually their relationship. Plaintiff waived his rights and agreed to leave the employ of the defendant on the terms set out in their discussion. He is not entitled at this stage to claim that which he renounced and expressly signed away”.

In Gauntlet Security Services (Pvt) Ltd. v Hlabangani[ii] the employer and the employee agreed to mutually terminate their employment relationship. After concluding the agreement, the employee went on to pursue a legal route in a bid to get more money from the employer. The courts failed to support such mischief in the following terms:

“If that is the case, he is entirely to blame for having misled Gauntlet Security into believing what he intended it to believe that is to say that the contract of employment was being terminated by mutual agreement. He must have known that he was not entitled to the payment of the money he received as terminal benefits without the contract of employment having been terminated in terms of agreement embodied in the document that he signed.”

It thus becomes crucial that parties contemplating a mutual termination of a contract incorporate all the terms of their agreement in the document that governs their separation. The net effect of such a document is that it cannot be set aside arbitrarily. Once parties agree, they are bound by the terms of the agreement even though these terms can be onerous in some instances.

Mutual Separation not equivalent to a retrenchment

A mutual agreement to terminate a contract is not equivalent to a retrenchment exercise. In Nei Zimbabwe (Private) Limited v Zane Brown and 10 Others[iii] the employees agreed to mutually separate with the employer after a change of shareholding structure of the company. The employees entertained the view that indigenous shareholders cannot properly run an organisation. The employer tried, to no avail, to convince these employees that a change in Shareholding structure does not change the management of the company. The employees remained adamant and separation was inevitable. The employees were paid some monies and left the employers premises. A few months down the line, the ex-employees decided that their separations where not properly executed. They demanded more money arguing that theirs was supposed to be a retrenchment. This argument was not supported by the court which in turn concluded:

“The employees wanted to terminate their employment with the appellant, that was their prerogative, but they were not entitle to retrenchment packages in terms of section 2 of the Act and the Regulations. The employer offered them some payment, which I might add, it was not obliged to pay in terms of the law. The employees accepted the payment offered. They received the payment and resigned, squandered the payment and now claim that they are entitled to more money or re-instatement in terms of the Act. That claim is not sustainable”.

When an employer and an employee agree to mutually terminate their employment relationship this cannot be construed as a retrenchment exercise. According to the court in this case, the definition of a retrenchment is clear to the extent that the circumstances did not warrant the inference that a retrenchment exercise had been carried out. This point is best illustrated where the court indicated:

“That is to say retrenchment means termination of an employee’s employment for the purpose of reducing expenditure or costs. The termination of employment in casu was not for the purposes of reducing expenditure or costs. Retrenchment also means termination of employment for the purposes adapting to technological change. Again, termination in casu had nothing to do with technological change. Retrenchment can also be effected for the purposes of reorganizing the undertaking in which the employee is employed”.

The clear distinction made by this court doesn’t need further explanation. When a mutual termination has been executed it cannot be deemed to be a retrenchment.

Mutual Separation and unfair dismissal

The other legal implication of a mutual separation is that once it has been concluded no party can successfully raise claims of unfair dismissal. In a South African matter between Ferguson v Basil Read (Pty) Ltd[iv] the court noted that when a claimant enters a mutual separation with “open eyes”, meaning that deception did not obtain, the question of dismissal will be farfetched. This court conclusively remarked:

“The applicant entered into a termination agreement with the respondent in full and final settlement of any disputes arising from his employment. He did so voluntarily, waiving the opportunity to engage in a consultation process in which he could have requested the respondent to consider alternatives to dismissal, such as future employment at the Saldanha project once it commenced. He was not induced to enter into the agreement by misrepresentation. Hence, he was not dismissed”.

It is submitted that dismissal is one of the several ways in which a contract of employment can cease to exist. Mutual separation is a different method altogether. There are instances where the two coincide for instance were a retrenchment is contemplated and in the process, parties end up ending the relationship by mutual agreement i.e way before finishing the retrenchment. What is crucial to note is that once the mutual agreement is concluded on, no one can escape its consequences unless allegations of fraud and misrepresentation become apparent.

Invalid mutual separations agreements

What makes mutual separations valid is the presence of consensus between the parties. This means that in the absence of this consensus a mutual separation agreement is voidable at the instance of either party.

Misrepresentation, fraud and duress are some of the things that render a mutual separation invalid. These acts have one thing in common. They result in the absence of consent between the parties to a separation agreement. The resultant agreement will not bind the parties.

Conclusion

Those contemplating a mutual separation should ensure that they are well versed with the principles discussed in this article. As noted, this type of separation has far-reaching consequences including a waiver of rights. It is advisable that when one is presented with such an agreement, they take time in scrutinising all the terms mindful of the fact that once the agreement is in effect there is no going back!

SOURCES:

[i] Lawrence Shumbayaonda v Madhatter Mining (Private) Limited (HH 147-2010)

[ii] Gauntlet Security Services (Pvt) Ltd. v Hlabangani (SC 51/02)

[iii] Nei Zimbabwe (Private) Limited v Zane Brown and 10 Others (SC 84/04)

[iv] Ferguson v Basil Read (Pty) Ltd (ZALCCT 38)

5,568 Views

NORMAL RETIREMENT

Retirement is a source of contention in labour relations. Unbelievable as it may sound, there have been cases where employees have approached their employers with “new” birth certificates simply to prove that they haven’t reached their retirement ages. Some employees have claimed unfair discrimination simply because there were retired when others were afforded late retirement options. Despite the challenges that some might face, retiring employees is not as complicated as it may appear […]

Introduction

In this article, the law behind retirement will be reviewed. The major questions to be answered in this article include:

What’s the retirement age in terms of Zimbabwean Labour Law?
What’s the source of law retirement?
Is the consent of the employee necessary?

Retirement definition

Retirement is when an employer terminates a contract of employment simply because an employee has reached a certain age limit. In Zimbabwe most companies set their normal retirement ages at 60 years and late retirement is normally set at 65 years.

In terms of the National Security Social Authority Scheme certain industries such as mining have their early retirement ages set at 55 years. Retirement at 55 is accordingly reserved for arduous tasks. These jobs include underground mining, cross boarder truckers etc.

Sources of law

Contracts of employment as well as Collective Bargaining Agreements are the major sources of retirement law. This means that employers and employees agree in writing that upon reaching a certain age limit the employee will be retired.

Pension regulations are also an important source of law. Organisations can set policies that ensure that their retirement age limits coincide with the pension regulations that apply in their industries. It is important to note that pension regulations may not be used as authority to retire an employee in the absence of an agreement between the parties.

In supporting this argument, the Supreme Court Matter between Mubvumbi and City of Harare[i] is authoritative. The courts in this matter held that:

“There is no basis upon which the respondent retired the appellant at 60. It was neither a specific term of the contract of employment between the parties nor a provision of any collective bargaining agreement that applied to him.”

It is therefore important that employers contemplating retiring their employees are conversant with the collective bargaining agreements obtaining in their industries. In the absence of a collective bargaining stipulation on this subject, it is best to come up with an agreement or a policy which states the age at which employees are going to retire. As mentioned above, another option is to fix, by agreement, the retirement age with that of the pension scheme that the organisation and its employees are subscribing to.

Employee consent

Arguments have been before our courts that consent of the employee ought to be required when retiring an employee. In support of such an argument one claimant has pointed that the employer should settle its arrears with the pension fund first and get consent of the employees in question, before opting to retire the employees.[ii] The courts have rejected this argument.

In Water and Allied Workers’ Union of Zimbabwe v City of Harare is was noted as follows:

“The respondent fixed the normal retirement age at 60 years and set 65 years as the late retirement age. The applicant agrees with that but contends that there was still a need on the part of the respondent to obtain consent from each of its members. I disagree.”

It is argued that consent from either party is unnecessary because in normal cases every party to the employment relationship is deemed to be aware of the retirement age. When the day finally arrives, there will be no negotiation unless if the employer needs to further engage the employee. The financial issues in connection with unremitted pension monies do no have an impact on the legality of the decision to retire an employee.

Employers discretion to retire an employee

A situation that normally raises unfair discrimination claims is where employee A is age 63 and has not yet been retired pending late retirement age of 65 whereas employee B is age 60 and is retired. The question that arises is whether the employer’s discretion to retire employee B can be changed by the courts. Can employee B question the discretion exercised by the employer in retiring him?

The importance of the employer’s discretion to retire employees has been emphasised by the courts in several occasions. In Water and Allied Workers’ Union of Zimbabwe v City of Harare[iii] the courts had the following to say:

“I agree that some members of the applicant were allowed to continue serving beyond the age of 60 years. That would certainly have caused them to believe they would now fall under the late retirement age of 65 years. (i.e. legitimate expectation) I, however, venture to say, upon reaching the normal retirement age, members of the applicant served at the pleasure of the respondent. (Emphasis added)

In Godfrey Munyamo Jonga V Chief Executive Officer, Zambezi River Authority and Zambezi River Authority the employer declined a request by its employee to extend his retirement age from 60 years to 65 years. This did not go down well with the employee who felt that his retirement should be postponed for him to build his pension which had significantly reduced during the hyper inflationary period, which had culminated in the loss of value for most pension schemes. The court did not support the argument by the employee and proceeded to conclude that:

“In casu, the request for extension did not find favour with the first respondent and he explained why he could not accede to the request. I did not find his reasons distant to a reasonable exercise of his discretion. I am therefore, unable to interfere with the decision reached.”

It follows therefore that once an employer has exercised his discretion in a reasonable manner the resultant decision to retire an employee cannot be interfered with by a court of law.

Conclusion

The legal principles behind retirement of employees seem straight forward. What is important is for employees to be aware of when they will retire. The best way to provide for retirement provisions is to make use of the employment contract if this is not already provided for in a Collective Bargaining Agreement for the industry. It has also been noted that the employer does not need to get consent from the employees when retiring them. Consent is only requirement when the employer intends on engaging the employee beyond the period of retirement. The discretion to retire an employee cannot be questioned. Once this discretion has been exercised in a reasonable manner it cannot be interfered with.

SOURCES:

[i] Mubvumbi v City of Harare (SC 64/18)

[ii] Water and Allied Workers’ Union of Zimbabwe v City of Harare (HH 238-15)

[iii] Godfrey Munyamo Jonga v Chief Executive Officer, Zambezi River Authority and Zambezi River Authority (HH 126-15)

2,839 Views

Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others (2014) 35 ILJ 209 (SCA)

Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others is a case decided in the Supreme Court of Appeal of South Africa. I think is relevant to the Zimbabwean Jurisdiction even though its binding effect in our jurisdiction is questionable. The case deals with sick notes that emanate from traditional healers […]

Introduction

Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others is a case decided in the Supreme Court of Appeal of South Africa. I think is relevant to the Zimbabwean Jurisdiction even though its binding effect in our jurisdiction is questionable. The case deals with sick notes that emanate from traditional healers.

Summary of Facts

This is an appeal against the decision of the Labour Appeal Court. The matter was between Mmoledi who as in the employ of Kievits Kroon Country Estate (Pty) Ltd. Between the month of April and May 2007, the employee, Mmoledi, requested to have her shift adjusted to accommodate her application for sick leave. She needed to attend a course as a traditional healer. The application for leave was granted. It is important to note that the course emanated from the visions that she reportedly saw which visions were interpreted as a calling for her to become a traditional healer.

On 1 June 2007 she approached her supervisor with a similar request. This time around she required a period of 5 weeks to attend the course. This request was made at a time when she had exhausted all her leave days. Her supervisor was willing to accommodate her request albeit for a shorter period of week. Mmoledi insisted that she required more time. To support her request for more time off she brought a note from her trainer which note indicated that she needed more than one week. The documents were left on her supervisor’s desk as the supervisor was not in the office on the day the papers were brought to the company.

The employee subsequently did not return to work within the period expected by her supervisor. The employer proceeded to institute disciplinary proceedings noting that the employee had breached work place rules. A disciplinary authority appointed in terms of the company rules found that the employee was guilty of misconduct and prescribed her dismissal from employment as the appropriate penalty. In dismissing her the authority concluded that her period of absence could not be construed as Sick Leave.

Aggrieved by the decision, the employee appealed to the Commission for Conciliation, Mediation, and Arbitration (CCMA). The decision to dismiss her was set aside on the basis that her absence from work was due to a situation which was beyond her control. The employer was aggrieved by the decision of CCMA and appealed to the Labour Appeal Court were the court concluded that the decision by CCMA was correct. The Supreme Court of Appeal was thus seized by an appeal by Kievits Kroon Country Estate (Pty) Ltd which emanated from the latter’s dissatisfaction with the conclusion reached by the Labour Appeal Court.

The issue in dispute

The major question was whether the commissioner of CCMA properly applied the principles applicable to an application for unpaid leave for issues unrelated to the contract of employment between the parties.

Further, the question was whether a traditional healer’s certificate could be construed as a medical certificate for purposes of applying for sick leave.

A discussion of applicable labour law principles

The Supreme Court of Appeal noted that the employee genuinely believed that she was ill. This was because of the cultural belief that she was being called by her ancestors to become a traditional healer. The court proceeded to note that such cultural beliefs existed in the South Africa Society and have been recognized by the courts before. It went further to note that such beliefs were constitutionally protected.

It was also highlighted that it was beyond any dispute that people sometimes seek assistance from traditional healers once faced by similar situations. The court recognized that the employee was seeing visions and she made use of traditional healing methods because of her cultural belief. This evidence went on unchallenged.

The court concluded that the commissioner was correct in noting that the employee’s failure to report for duty was reasonable and that beyond her control. In the eyes of the Supreme Court of Appeal, the decision by the CCMA commissioner was correct.

Conclusion

The Supreme Court of Appeal concluded that the Labour Appeal Court was correct to dismiss the appeal. It then proceeded to also dismiss the appeal with costs.

NB: This summary was submitted to the University of South Africa (UNISA) in partial fulfilment of the requirements for the Degree of Bachelor of Laws (LLB).

2,207 Views

SICK LEAVE & RETIREMENT ON MEDICAL GROUNDS

This article will provide a juxtaposition of the sick leave clauses in the Labour Act and the interpretations that have been fostered by courts in Zimbabwe and to a certain extent by South African Courts. It is hoped that by coming up with such a comparison the law on sick leave will be made clear […]

INTRODUCTION

Sick leave provisions in the Labour Act (Chap 28.01) are clear cut. This article will provide a juxtaposition of the sick leave clauses in the Labour Act and the interpretations that have been fostered by courts in Zimbabwe and to a certain extent by South African Courts. It is hoped that by coming up with such a comparison the law on sick leave will be made clear. The section in question is section 14 is it is broken down into 5 subsections that will now be examined.

SECTION 14 (1)

Section 14 (1) provides as follows:

“Unless more favourable conditions have been provided for in any employment contract or in any enactment, sick leave shall be granted in terms of this section to an employee who is prevented from attending his duties because he is ill or injured or undergoes medical treatment which was not occasioned by his failure to take reasonable precautions”.

This provision provides parties to an employment relationship to come up with better conditions for Sick Leave. These better conditions can be found in a contract of employment or any other enactment such as a Collective Bargaining Agreement. Once the better conditions have been agreed upon an employer is bound by the latter. These better conditions take precedence over section 14.

In Zimasco v Maynard Marikano[i] the employer and employee agreed to better terms compared to the ones provided in section 14. The employer then deviated from the provisions set out in its policies. The Supreme Court in this matter did not tolerate such deviation from set standards and had no option but to rule that:

“In the circumstances the decision by the appellant to terminate the appellant’s contract of employment without reference to its own policy and procedures was irregular. The finding that there was an irregularity in the termination of the respondents’ contract of employment cannot therefore be impugned.”

Zimasco v Maynard Marikano points to the fact that employers can provide for better sick leave conditions in their policies. These policies are binding and cannot be circumvented for the sake convenience.

SECTION 14 (2)

Section 14 (2) reads:

“During any one-year period of service of an employee an employer shall, at the request of theemployee supported by a certificate signed by aregistered medical practitioner, grant up to ninetydays’ sick leave on full pay.”

In Thandekile Zulu v ZB Financial Holdings (Private) Limited[ii] the phrase “one-year period of service” was construed as a period of 12 months from the date the employee fell sick.

The section makes it mandatory to have the request for sick leave supported by a certificate that would have been signed by a registered medical practitioner. The term “registered medical practitioner” poses no challenges as these are health personnel registered in terms of the requisite laws of Zimbabwe.

Problems may arise when an employee brings in “sick note” from an unregistered traditional healer. In the South African case between Kievits Kroon Country Estate (Pty) Ltd v Mmoledi [iii]the Supreme Court of Appeal in South Africa argued that a note from a traditional healer ought to be construed as a sick note for purposes of sick leave. In explaining this position, the court remarked:

“The certificate from the traditional healer was considered ‘meaningless’ and was therefore rejected as proof of illness. But had he understood it to be equivalent to a medical certificate or tried to understand its import by asking the respondent to explain its meaning, instead of summarily rejecting it, he may well have accommodated her request”.

This South African decision may not bind Zimbabwean Courts. It may have persuasive effect on future judgements. This therefore means that practitioners must trade with caution when dealing with “sick notes” emanating from traditional healers who are not registered.

SECTION 14 (3)

Section 14 (3) reads:

“If, during any one-year period of service of an employee, the employee has used up the maximum period of sick leave on full pay, an employer shall, at the request of the employee supported by a certificate signed by a registered medical practitioner, grant a further period of up to ninety days’ sick leave on half pay where, in the opinion of the registered medical practitioner signing the certificate, it is probable that the employee will be able to resume duty after such further period of sick leave.”

This section seems straight forward. Any employee can only be granted a further 90 days of sick leave on half pay if a medical practitioner is of the view that the employee will be able to refuse normal duty at the expiry of the 90 days. If the employee’s prospects of recovery are slim, then section 14 (4) will kick in and the employee will have to be retired on medical grounds.

SECTION 14 (4)

Section 14 (4) stipulates that:

“If, during any one-year period of service, the period or aggregate periods of sick leave exceed— (a) ninety days’ sick leave on full pay; or (b) subject to subsection (3), one hundred- and eighty-days’ sick leave on full and half pay; the employer may terminate the employment of the employee concerned”.

This subsection provides an employer with unfettered right to terminate a contract of employment upon the lapse of 90 days sick leave on full pay or the 180 days. This provision has been a subject of great controversy. In Zimasco v Maynard Marikano the supreme court remarked in its obiter dictum that section 14 (4) had far reaching consequences for the employee and as a result the audi alterum paterm rule had to be observed.

It is argued that the correct position is now found in Thandekile Zulu v ZB Financial Holdings (Private) Limited in which the court highlighted the current position as follows:

“In light of the above, I am of the view that the provision does not take away the employer’s unfettered discretion to terminate employment due to incapacity. It would be a gross miscarriage of justice to impose an onerous obligation on the employer where the clear language of the statute does not provide such an obligation.”

Section 14(4) does not therefore provide the employer with any other obligation when terminating a contract on medical grounds. The picture will be totally different if the employer has a sick leave policy that provides better conditions compared to the ones in the Labour Act.

SECTION 14 (5)

Section 14 (5) provides that:

“An employee who so wishes may be granted accrued vacation leave instead of sick leave on half pay or without pay”.

Section 14(5) applies when an employee has exhausted the sick leave days provided under section 14(3) as mentioned above. It is submitted that the section can only be raised if there is an opportunity for the employee to recuperate and resume normal duties.

SOURCES

[i] Zimasco v Maynard Marikano (SC 6/14)

[ii] Thandekile Zulu v ZB Financial Holdings (Private) Limited (SC 48/2018)

[iii] Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others (2014) 35 ILJ 209 (SCA)

3,407 Views

DISPUTE RESOLUTION AND IMPARTIALITY

In this article, I will delve into the concept of impartial tribunals and a place this concept has in ensuring justice. I will also note with great concern that some tribunals have been found wanting in as far as this concept is concerned […]

I have seen situations where labour officers or arbitrators have tended to favour one side or the other in a labour dispute. When arbitrators take sides a gross violation of the justice system would have occurred.

As a starting point, for any disciplinary hearing to produce a fair outcome it will have to comply with impartiality which is one of the basic rules of natural justice. When a disciplinary committee sits in a hearing the chairman is not supposed to take sides, his or her role is to independently assess the circumstances of the case and give an uncontaminated verdict. It is also important that when one appoints a chairman this be someone who was not involved in the matter before either as an investigator or witness. In his book, A Practical Guide to Labour Law, Conciliation, Mediation and Arbitration in Zimbabwe, Mucheche CH, points, out on page 28, that the practise of hiring an outsider to chair a disciplinary hearing does not accord with the spirit of promotion of fair labour standards as the hired outsider will always act in a manner to please his or her “master”. Such will, in most cases, compromise impartiality.

In Denford Chipunza Versus National Social Security Authority and the Chairperson, National Social Security Authority (HC 2112/2002) the court noted the following about a hearing:

The fact that the minutes were clearly doctored, coupled with the fact that there was only one witness was an indication that the Disciplinary Hearing Committee was biased against the employee.
Secondly it was pointed out that a past relationship with the affected individual particularly where such relationship has been sour must be viewed with suspicion more so if the party to that relationship is the sole witness.
Thirdly, the court noted that there is universal agreement among jurists of all countries that it is of first importance that judicial tribunals should be honest, impartial, and disinterested.

In Alternative Dispute Resolution (ADR) it is also important that the labour officer or the arbitrator be impartial in the same manner as any hearing official at company level. By interpreting Labour Law and applying it to the facts of each case, labour officers are part of our judiciary system. The Zimbabwean Constitution on section 164 (2) stipulates that;

“The courts are independent and are subject only to this Constitution and the law, which they must apply impartially, expeditiously and without fear, favour or prejudice.”

Our courts have dealt with impartiality that occurs in other Courts. One such case was between Itayi Nkomo and 2 Others Versus T. M. Supermarket (Pvt) Limited (HC 647/13). The background of the matter may not be important. What is important to note is the fact that the judge who had presided over the matter was engaged with TM supermarkets in some commercial activity. There was evidence that he received cash payments for agricultural produce as way back as 16 May 2012 before presiding over the matter in January 2013. Against the background the High Court held that:

“It is as clear as day light that …. had a pecuniary interest in respondent’s affairs. The amounts involved are quite negligible, but, however, it is not a question of the amount but a pecuniary interest which usher in reasonable apprehension of a real likelihood of bias”.

The judge went on to point out that;

“I detect a real likelihood of bias in this matter, which conclusion in my opinion a reasonable man cannot avoid to make. It is for that reason that despite all the technicalities that can be raised by respondent the inescapable and irrestible conclusion is that … should not have presided over this dispute”.

The implications of the matter between Itayi Nkomo and 2 Others Versus T. M. Supermarket (Pvt) Limited can be itemised as follows:

When one is handling a matter at arbitration level (as an arbitrator) or even at company level (as a hearing official) they need to ensure that they were no previous dealings with the parties in the dispute that may have negative implications on the judgement they will give.
Human Resources Practitioners and Lawyers need to be on the look for this kind of bias as this may have disastrous consequences in the way matters are handled.

Another kind of bias that is common in ADR is one in which a labour officer or designated agent argues on behalf of the employee or employer. A look at the matter between Trust Corporation Securities (Private) Limited Versus L.M Gabilo and Devorgille Patsanza (HC 4177/07) can help in understanding biases that can happen in this regard.

On the 26^th June 2007, while Mr Biti for, Devorgille Patsanza, was making submissions at the hearing, the Arbitrator (L.M Gabilo) remarked that Devorgille Patsanza had “told him about how she suffered during the years”. The Trust Corporation Securities (Private) Limited’s’ legal counsel asked him to clarify where this conversation took place, but the Arbitrator did not respond to that inquiry. Because of the remarks the impartiality of the arbitrator was doubted. The outcome of the matter is not very important however the lessons that one can, arguably, learn are as follows:

Arbitrators should not hear matters from the parties to the dispute in settings outside the hearings.
When a party challenges the impartiality of the arbitrator (In cases of desputes of interest), there is need to adhere to Article 13 (1) of the Arbitration Act (Chapter 7:15). Which says that:

“The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of para (3) of this article.”

When impartiality is alleged an arbitration, award can be set aside. The correct procedure will, however, need to be followed.

From the foregoing discussion about impartiality, it can be summarised that impartiality is a very important aspect if any hearing is to be considered as fair. The cases reviewed reflects to some extent that one needs to assess their role in a dispute resolution set up and determine if impartiality may be contested in the hearing or at the appeal level. It is also important to point out that when there are real grounds that one can prove against impartiality a matter can be contested on that basis and if a judgment had been issued it will be set aside.

This article was in the Labour Matters Magazine in 2017.

1,737 Views

QUANTIFICATION OF DAMAGES IN LIEU OF REINSTATEMENT.

The legal principles behind the quantification of damages in lieu of reinstatement have been clearly ascertained by our courts. The Labour Act (Chapter 28:01) provides for various forms of reliefs in cases of unfair labour practices. The reliefs include, but are not limited to, an order for back pay, damages for prejudice suffered because of the unfair labour practice and reinstatement (Section 89 (2) (C) of the Act) […]

Introduction
The legal principles behind the quantification of damages in lieu of reinstatement have been clearly ascertained by our courts. The Labour Act (Chapter 28:01) provides for various forms of reliefs in cases of unfair labour practices. The reliefs include, but are not limited to, an order for back pay, damages for the prejudice suffered because of the unfair labour practice and reinstatement (Section 89 (2) (C) of the Act). The relief of reinstatement is only awarded provided that a court or tribunal stipulates that damages are also payable as an alternative to an employee’s reinstatement or employment. The main aim of this article is thus to outline the law that operates in the sphere of quantification of damages as an alternative to reinstatement. I start with a review of the Labour Amendment Act (2015) and will then look into the various principles of damages in lieu of reinstatement, which principles have been developed by our courts.

Labour Amendment Act (2015) and Damages In lieu of Reinstatement
Some legal writers have commented that, by enacting section 12C of the Labour Amendment Act (2015), the legislature, has come up with a legal way of computing damages in lieu of reinstatement1. The section 12C of the Labour Amendment Act provides for a minimum retrenchment package that is payable to an employee whose termination is occasioned by a retrenchment exercise, mutual agreement and upon expiry of a contract. The authors go on to argue that getting the minimum retrenchment package as well as the “traditional damages” can be seen as “double dipping”. I do not share the same views. In this section, I will point out that the minimum retrenchment package, as well as the damages in lieu of reinstatement, are two different aspects of our labour law and that the legislature did not do away with what may be termed as traditional damages in lieu of reinstatement. The discussion will not go into whether or not the compensation contemplated by Section 12C is fair or not.

The starting point of my argument is that the Labour Amendment Act (2015) did not repeal section 89(2) (C) (iii) of the Act2 which empowers the Labour Court to order reinstatement upon a finding of wrongful dismissal. I submit that an inquiry into whether a dismissal was fair or not is independent of whether or not someone received compensation for loss of employment. It is further argued that receiving the compensation for loss of employment cannot be interpreted as “full and final settlement” of payable damages in lieu of reinstatement. Such an interpretation would mean that every dismissal/termination is presumably unfair and that the employee is supposed to receive damages in lieu of reinstatement. It would also mean that upon a finding that an employee has been unfairly dismissed such employee is entitled to nothing having received compensation in terms of section 12C of the Labour Amendment Act. I believe that such an interpretation would be absurd.

Secondly, the golden rule of statutory interpretation dictates that words in an enactment should be given their ordinary grammatical meaning3 unless this would lead to absurd results4. There is nothing in the wording of section 12C that suggest that the section replaced damages in lieu of reinstatement with the compensation of loss of employment. In any case, it is argued that damages in lieu of reinstatement are only available to employees whose termination is wrongful and compensation for loss of employment is available to every employee whose termination is lawful.

Period of Damages in lieu of reinstatement
The starting point for the computation of these damages is the date of wrongful dismissal5. The date of unfair/wrongful dismissal has been seen by our courts as “fixed and immutable” and that it is “not capable of being shifted, even metaphorically6”. Whilst the starting date for computing the damages can be easily ascertained, the end date can be a subject of controversy and debate. The last date for the computation of the damages is complicated by a need to mitigate any loss arising from the wrongful dismissal, which obligation falls on every unfairly dismissed employee. In Ambali v Bata Shoe Co Ltd7 the court pointed out that,

“I think it is important that this Court should make it clear, once and for all, that an employee who considers, whether rightly or wrongly, that he has been unjustly dismissed, is not entitled to sit around and do nothing. He must look for alternative employment. If he does not, his damages will be reduced. He will be compensated only for the period between his wrongful dismissal and the date when he could reasonably have expected to find alternative employment.

It follows, therefore, that employees are under an obligation to look for alternative employment upon being dismissed. In determining the period within which the employee can “reasonably have expected to find alternative employment” a court is bound to make use of evidence adduced by the parties to the dispute (see Hongyu Enterprises V Phillip Mafoti 8 and Delta Beverages (Pvt) Ltd v Murandu9). In the absence of such evidence, a court is bound to refer the matter back to the court that entertained the dispute in the first instance. This is exactly what happened in Hongyu Enterprises case.

Employees are therefore under an obligation to look for alternative employment upon being dismissed. In determining the period within which the employee can “reasonably have expected to find alternative employment” a court is bound to make use of evidence adduced by the parties to the dispute (see Hongyu Enterprises V Phillip Mafoti 8 and Delta Beverages (Pvt) Ltd v Murandu9). In the absence of such evidence, a court is bound to refer the matter back to the court that entertained the dispute in the first instance. This is exactly what happened in Hongyu Enterprises case.

When considering “the period between his wrongful dismissal and the date when he could reasonably have expected to find alternative employment” for the purpose of computing the damages, various factors are taken into account. Such factors include reasonable attempts by the employee to find alternative employment, the skills of the employee10 and the performance of the whole economy to mention a few.

Computation of Damages
The actual computation of the monetary values of the damages is not an easy task. A court can direct that parties to a dispute agree on an amount payable as damages11. In the event of a
disagreement ensuing the court may direct the parties to revert to it for a determination (See James Mataga v The Commissioner of Prisons and The Director (SSB))12. Most cases of wrongful termination have ended up reverting to the courts or arbitration tribunals so that damages in lieu of reinstatement can be established.

The computation of damages, like the period within which an employee is reasonably expected to have found employment, should be supported by evidence13 adduced by the parties to the dispute. In Erickson Mvududu v Agricultural and Rural Development Authority14, the court rightfully set aside an award of damages to the tune of sixty month’s salary solely because these damages were not supported by any evidence adduced by the parties to the dispute. It was in this regard that the court remarked as follows;

“Although it is trite that damages need not be quantified with mathematical precision, there must be some evidentiary basis for calculating damages, even if they be punitive damages.”

Our courts have been seized by litigation that spanned over the period between the Zimbabwe dollar era as well as the multi-currency regime. In such cases, the courts had no option but to award reliefs that were just. University of Zimbabwe v Sibanda15 is a case in which the court pointed out that;

“The Zimbabwean dollar is no longer in use since the beginning of the multicurrency system. For the Arbitrator to give the award in Zimbabwe dollars the social justice which the Labour Act is seeking to address will not be done. Such orders will only be academic and will not meet the justice of the case.”

The court went further to pronounce that awarding damages in lieu of reinstatement in values that were in the United States Dollar is proper and legal under the circumstances. Earlier judgements had realised the need to award damages in a currency that is functional at the time of the order16.
It has also been determined that the jurisdiction to covert damages from the old currency (Zimbabwean Dollar) to the United States Dollar is that of the Labour Court17 and not any other court or tribunal. This authority is found in terms of 2A of the Labour Court Act which provides for the advancement of social justice and democracy in the workplace by securing the just, effective and expeditious resolution of disputes and unfair labour practices18.

Mindful of the fact that converting a currency from Zimbabwe Dollar to US Dollar is not an easy task, the court in Madhatter Mining Company v Marvellous Tapfuma recommended the appointment of an expert. The court thus mentioned;

“I would accordingly venture to suggest to the Labour Court that it considers enlisting the services of an appropriately qualified expert in financial matters, in order to work out a formula for calculating the damages in question”

It is submitted that the computation of damages in lieu of reinstatement is not an easy task. Employees are under an obligation to find alternative employment and to avoid banking on a claim that is before a court. The process, like any court process, must be supported by evidence and it is important to point out that such evidence must be, as far as possible, written evidence.

Circumstances that will lead to awarding of the damages
The Act stipulates that such damages are only awarded when the employment relationship “is no longer tenable”. The Act does not suggest a direction as to what may constitute an employment relationship that is no longer tenable. The Courts have since shed more light on the circumstances that will lead to the awarding of the damages. The purpose of awarding damages, as an alternative to reinstatement, is to protect the employer from being forced to reemploy an employee in situations were normal relations between the employer and the employee had broken down19.

In Elvis Ndlovu v Higher Learning Centre20 an employee was awarded a relief of reinstatement but the employer refused to comply with the award and further refused to pay any outstanding salaries. The employee was subsequently awarded relief in the form of damages since reinstatement had failed.

Damages may also be awarded when an employer or his representative expressly stipulate that a reinstatement is no longer an option. This case was a subject of debate in Mvududu v Agricultural and Rural Development Authority where the employer had written to the employee legal representative that the employer was preferring payment of damages in lieu of reinstatement. Even though the communication was made “without prejudice” the Court noted that this was an indication that damages in lieu of reinstatement were proper.

Further, a consent order can also provide for damages in lieu of reinstatement. A consent order emanates from an agreement between parties to a dispute which is recorded as an order of a court. In Telecel Zimbabwe Private Limited v Sibangani Mabore such as consent order was the subject of the dispute. Parties to a labour dispute may also mutually agree that the employee is entitled to damages in lieu of reinstatement upon a finding of unfair dismissal21.

Enforcement of Damages
Damages in lieu of reinstatement can be enforced, in terms of section 98 (4) of the Act in the case of an arbitration award, and in terms of section 92B (3) of the Act, in the case of Labour Court Judgement, by registering the award either in High Court or The Magistrates Court.

For an award of damages to be enforceable, it must have a specific amount. In Khumalo v Ingwebu Breweries22 the High Court refused an application for the registration of an award because “the arbitrator should have done the calculation and arrived at a specified amount…”.

The court further pointed out that the authority for quantification of damages is that of the Labour Court or Arbitration Tribunal.

Conclusion
It is reemphasized that the quantification of damages in lieu of reinstatement is not an easy matter. Various legal principles have been laid out by the courts. The important principle is that an employee should mitigate his or her loss by finding alternative employment. If the employee does not endeavor to look for employment he or she will face a reduction in his or her damages. The quantification of damages may at times be complicated by the fact that a dispute occurred between the Zimbabwe dollar era as well as the multi-currency era. In some cases, financial experts have been recommended by the courts. It is always important for parties to a dispute to avoid plucking figures from the air and ensure that tangible proof backs their submissions.

Sources
2 Labour Act (Chap 28.01)
3 Nyamande & Another v ZUVA Petroleum (Pvt) Ltd (SC 281/14)
4 Botha CJ 2012 Statutory interpretation: an introduction for students 5 ed Juta
5 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
6 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
7 1999 (1) ZLR 417
8 SC 43/07
9 SC38/15
10 Telecel Zimbabwe Private Limited v Sibangani Mabore (SC 50/13)
11 Hongyu Enterprises v Phillip Mafoti (SC 43/07)
12 HC11064/01
13 Redstar Wholesalers v Edmore Mabika (SC 52/05)
14 SC 58/2015
15 LC/H/905/12
16 Gift Bob David Samanyau & Ors v Fleximail (Pvt) Ltd (HH 108 – 11)
17 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
18 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
19 Mtetwa v Business Equipment Corporation (SC 25/04)
20 HC 583/09
21 Tendai Zizhou v Barclays Bank (LC/H/57/14)
22 HC 2972/13

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