MOSES MAWIRE v RIO ZIM LIMITED (PRIVATE) LIMITED SC13/21

“If there was acceptance of the variation, as there was, there was no claim to be

prescribed. It follows that by his conduct, the appellant impliedly consented to the variation of his contract. In such circumstances, he could not claim any benefits flowing out of the contract that had been varied.”

Category: Implied Consent to the Variation of a Contract

Introduction

It is trite in our law that an employment contract cannot be unilaterally varied without the consent of the employee.[1] It is also deep routed in the labour laws of this country that an employment contract is not cast in stone.[2] Changes in the economy, the industry among other factors may warrant changes to the contract.[3] It is accepted that consent can be explicit, that is given in writing. It can also be implied. Moses Mawire v Rio Zim Limited (Private) Limited deals with implied consent and demonstrates the far-reaching consequences of such consent.

Facts

The appellant was employed in 2006 at a time when the Zimbabwean dollar was still functional. His contract provided for a sundry of allowances. In 2009 the Zimbabwean dollar became moribund forcing companies, the respondent company included, to adopt the US dollar as a means of remunerating employees. A letter was written to the appellant employee advising him of the new USD salary. Allowances were excluded. This was on 9 February 2009. Despite the appellants contract stipulating that he was entitled to a motor vehicle, the employer continued to supply him with fuel and maintained his personal vehicle. In 2014, close to 5 years after the changes, the employee lodged a complaint with a labour officer. Conciliation failed and an arbitrator ruled that the employee was entitled to the back dated allowances that he was claiming. Aggrieved, the employer appealed to the Labour Court. It was the Labour Courts finding that the claims had prescribed, and that the employee had accepted the variation of his contract. The appeal was therefore allowed. It was this result that founded the Supreme Court appeal.

The Law

Prescription of the dispute

The appellants argument was that there was no prescription of the dispute since it was continuing as the employer not paying the contractual allowances every month. It was, however, the Supreme Court’s finding that the alleged non-payment of allowances every month constituted independent infractions which prescribed every two years. The appellants plea to have a judgement in favour of non-payments for the past two years, 24 months of the alleged non-payments, could not be sustained by the Supreme Court since this was not an issue in the court aquo. In this respect the Supreme Court argued:

“It is trite that a litigant cannot argue on appeal a case different to that presented in the proceedings a quo.”

Variation of the Contract

It was the courts finding that a memorandum had altered the appellants contract and for five years he received his salary without any complaints. It found that there was implied consent to the terms of the contract. The supreme court utilised the authority in Smith v Hughes where it was stated that:

“If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms.”

Conclusion

Having found that the appellant had accepted a new salary without the allowances, that the appellant had accepted the variation to his contract, the appeal was dismissed.

[1] Agricultural Bank of Zimbabwe Limited t/a Agribank v (1) Celemio Machingaifa (2)

Chenjerai Mutambisi SC 61/07

[2] Chirasasa v Nhamo N.O. & Anor 2003(2) ZLR 206(S)

[3] Chirasasa v Nhamo N.O. & Anor 2003(2) ZLR 206(S)

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A Sundry of Other Cases Decided in the Year 2020 – 2021

This section constitutes a quick overview of various cases that were decided in 2020 and 2021. Unlike other cases summaries, we have on this blog, this section is updated constantly as the cases are decided. The summaries are noticeably short. Readers are encouraged to peruse through the full judgements to fully appreciate the circumstances that led to those decisions.

Stuttafords Removals (Private) Limited v Nyamazunzu (SC 40-20): This was a case regarding condonation for late noting of an appeal. The court argued that all requirements for the granting of such condonation must be considered. These include the degree of non-compliance, explanation proffered, prospects of success on appeal and the convenience of the court among a host of other requirements. The case makes it clear that condonation is at the discretion of the court and the more alluring the reason put forward the more the court is likely to grant the condonation.

National Foods Limited v Tendai Bonde (SC 60-20): This case deals with internal pay equity. It argues that an employer can come up with an employee retention scheme at its discretion. An individual who does not fit into that scheme cannot argue that they have been discriminated against without proof.

Ncube v Fidelity Printers and Refineries (Private) Limited (SC 62-20): This was an application for leave to appeal to the Supreme Court. The court dismissed the application because the applicant had no prospects of success on the main appeal.

Samuel Mkozho v Standard Chartered Bank Zimbabwe Limited (SC 73-20): Among other important lessons, the case emphasises that grounds of appeal must be outlined in a concise manner failure of which the grounds of appeal will be fatally defective. It also argues that using a standard of proof higher than the balance of probabilities is not acceptable when dealing with civil matters.

Mazarire v The Retrenchment Board & Anor (SC 105-20): This case is authority to the fact that if a court takes into consideration facts that are outside what it is called for to decide by the parties, the resultant judgement will be fatally flawed. The same goes for a court that formulates its issues for determination. As in the first instance, a higher court can impugn the decision.

Tendai Bonde vs National Foods & Others (SC 11-21): In this case, the Supreme Court dismissed an application for leave to appeal to it on the basis that no question of law was raised on the grounds of appeal. The grounds of appeal should show that the Labour Court erred at a point of law and a mere repetition of facts would not amount to a question of law.

Honest Chipangura and Others v Kwekwe City Council and Anor (SC 27-21): In this case, employees were moved from Kwekwe Breweries to Kwekwe City Council. Following this movement, the employees were offered jobs different from what they held with Kwekwe Breweries. They argued that they had been transferred on less favour terms in contravention of section 16 of the Labour Act. Kwekwe City Council argued that there was no transfer of undertaking since it owned the Kwekwe Breweries. It was held that there was no transfer of undertaking as contemplated by the Labour Act and that the employees signed new contracts with the city council.

Glademan Mbira v Civil Service Commission (SC 32-21): Illustrates the dangers of not having a well-organised hearing. The court frowned upon conducting a disciplinary hearing in such an informal manner that evidence is left untested.

Martin Jongwe v National Foods Limited and Anor (SC 33-21): The court ordered costs at attorney-client scale against the appellant for filing a fatally defective appeal. The court argued that the failure to cite the correct date of the judgment appealed against in a notice of appeal contravenes the peremptory requirements of r 37 (1) (a) of the Rules and invalidates such a notice.

Tongai Machona v Old Mutual Limited (SC 34-21): Argues that not all procedural irregularities warrant the vitiation of proceedings. The court found that the failure to hold a pre-suspension meeting did not constitute a violation of the code.

Zimbabwe Broadcasting Corporation (Pvt) Ltd v Irvine Mhlanga (SC 58-21): Argues that where a party is alleged to have waived their right to an arbitral award, the party relying on such waiver must adduce clear proof that the other party indeed intended to waive his rights. The intention must be clear and must not be left to speculation.

Living Waters Theological Seminary v Reverend Ngoni Chikwanha (SC 59-21): This case argues that Labour Officers do not have the appellate jurisdiction over matters already heard and determined by disciplinary committees and appeals committees. When a disciplinary committee or appeals committee determines a matter, it can no longer be conciliated as a decision will have been made by a competent authority whose decision can only be appealed against the Labour Court.

Patrick Manjovha v Delta Beverages (Private) Limited (SC 64-21): Reiterates the position that, an appeal should be against an order of the court and not against the reasons given by the court. The days within which one should note an appeal are calculated from the day the order is given and not when the reasons are produced by the court (see also Martin Jongwe v National Foods Limited and Anor SC 33-21). The appellant took 3 years to contest his dismissal and had his case dismissed for failure to comply with the prescription requirements.

Last Updated: 18 July 2021

Please refer to the Terms of Use

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COLCOM FOODS LIMITED v TARUVA SC107-20

“The authorities I have cited make it clear that a deadlock in negotiations over new terms of employment may entitle the employer to terminate on notice.”

Category: Deadlock Over New Terms and Conditions of Employment

Introduction

Colcom Foods Limited v Taruva dealt with the correct method of ending an employment relationship that has been affected by a deadlock over the negotiation of new employment terms. Whilst this case argues that termination on notice is permissible, this point should be understood against a background where section 12 of the Labour Act was amended in 2015.[1] In terms of these amendments, termination on notice, as far as it affects employees on permanent contracts, is now unlawful but the case provides profound insight into what an employer can and cannot lawfully do when faced with such a deadlock.

Facts

The dispute arose when the respondent employee was offered a lateral transfer at a time when negotiations for a retrenchment exercise were ongoing. On signing the contract, the respondent indicated that he was accepting the agreement under protest as he alleged that his terms of employment had been varied. At the same time, he lodged a claim with a labour officer under the Ministry of Labour citing unfair labour practice. He argued that the employer had repudiated his contract of employment and that the employer had also failed to pay his dues. The employee never reported for work at the new workstation despite being asked to do so. The employer accepted that he had repudiated the contract of employment and proceeded to terminate it on notice. Conciliation of the dispute failed. An arbitrator and the Labour Court found in favour of the respondent employee. It was the Labour Courts finding that the employer should have conducted a disciplinary hearing before proceeding to terminate the employment relationship on notice. Aggrieved by the Labour Courts finding, the employer lodged the appeal with the Supreme Court thus founding the current dispute.

The Law

It was the Supreme Court’s finding that the dispute pertained to the lawfulness of terminating the contract on notice under the circumstances outlined above. It noted that the Labour Act provided for dismissal and termination as legitimate methods for ending an employment relationship. It further found that termination does not amount to dismissal all the time. In this respect the court distinguished:

“Dismissal ordinarily arises from disciplinary proceedings while termination may be done on notice.”

It was also the court’s finding that in previous disputes where a deadlock arose regarding the new terms and conditions of employment the termination of the contract on notice was upheld by the courts as a lawful method of ending the employment relationship. Disciplinary action is not an option.[2] The court remarked:

“On the basis of that authority, it is clear that the court a quo was wrong in drawing the conclusion that the appellant should have conducted a disciplinary hearing following the respondent’s refusal to report for duty. There was no need to proceed in terms of a code of conduct.”

Based on the above findings, the court concluded that there was nothing wrong with the termination of the respondent employees’ contract.

Own comment

We have already mentioned that this case happened before the enactment of Act 5 of 2015. If an employer were to face similar circumstances, termination on notice would not be permissible. The Act now specifically provides circumstances under which an employer can terminate on notice and these are in terms of an employment code, by mutual agreement, if the contract is of a fixed term nature and when the termination is according to a retrenchment exercise.

The Section 12 of the Labour Act, as amended in 2015 reads:

“(4a) No employer shall terminate a contract of employment on notice unless—

(a) the termination is in terms of an employment code or, in the absence of an employment code, in terms of the model code made under section 101(9); or

(b) the employer and employee mutually agree in writing to the termination of the contract; or

(c) the employee was engaged for a period of fixed duration or for the performance of some specific service; or

(d) pursuant to retrenchment, in accordance with section 12C.”

The words “No employer shall terminate a contract of employment on notice” are peremptory making termination on notice unlawful unless under the circumstances prescribed. We submit that if an employer were to face circumstances like in Colcom Foods Limited v Taruva the most viable option would be to pursue a retrenchment exercise. Unlike the situation before the 2015 amendments where retrenchment exercises would result in unending deadlocks, the Labour Act now provides for a minimum retrenchment package payable to an employee. This arrangement has seen retrenchment exercises becoming less cumbersome than was previously the case.

[1] See Section 4 of Act 5 of 2015

[2] See Chirasasa v Nhamo N.O. and Anor 2003 (2) ZLR 206 (S) and Colcom Foods Limited v Kabasa SC 12/04 cited by the Supreme Court

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REPUDIATION OF A CONTRACT OF EMPLOYMENT

1. Introduction

In this section, we outline the rules of contract that determine and explain the repudiation of a contract of employment. Repudiation occurs when a party to a contract shows, by omission or conduct, that they are no longer willing to be bound by a contract duly concluded by the parties.[1] It is a breach of contract.[2] The principle emanates from the common law rules upholding the sanctity of any contract.[3] In terms of these common-law rules, persons are bound by the contract that they have with others and as such contractual obligations, as a general rule, cannot be regened from. In Latin words, the rule states “pacta sunt servanda” loosely translated to agreements must be honoured.[4] It is an important aspect of employment law that one cannot afford to ignore. The discussion will also outline some of the common law principles that have been upheld in the course of judicial decision making.

2. Intention is an important element of repudiation

It has already been mentioned that repudiation occurs when conduct or omission by one party shows an unwillingness to be bound by a contract of employment. The intention not to be bound by a duly agreed contract is thus an important element of this kind of breach. We submit that a mistake on the part of the accused party cannot lead to the repudiation of a contract. The act or conduct in question should leave a reasonable person objectively concluding that a contracting party is no longer willing to be bound by a contract of employment.[5]

The intention element of repudiation on the part of the employer is correctly captured under section 12B(3)(a) which provides for circumstances where an employee is deemed to have been unfairly dismissed. The section states that:

“An employee is deemed to have been unfairly dismissed—

if the employee terminated the contract of employment with or without notice because the employer deliberately made continued employment intolerable for the employee…”

The intention element is captioned by the words, “deliberately made” highlighted above. The test is objective, and a reasonable person should conclude that the employer’s actions or omissions went to the core of the employment relationship to warrant the conclusion that repudiation has occurred. It is only when this happens that one is deemed constructively dismissed.

Several court judgements have elaborated on the circumstances that qualify as a repudiation of a contract of employment. These judgements are discussed next.

3. Tel-One (Private) Limited v Kuyumani Zulu[6]

The major principle emerging from this case is that an employee who is on suspension and who proceeds to accept a job elsewhere repudiates his contract with the employer that suspended him or her.

In terms of the facts, Kuyumani Zulu was put on suspension on 21 February 1996. On 1 September 1997, he was employed by ZIMNAT and was employed there until he was dismissed on 12 February 1998. ZIMNAT terminated the Zulus contract upon being advised that he was still an employee for Telone. Meanwhile, Telone unlawfully dismissed him from employment, founding litigation that culminated in the awarding of damages in favour of Kuyumani Zulu. Dissatisfied with the damages the Supreme Court was called upon by the employer to adjudicate the dispute. In its decisive remarks, the Supreme Court argued:

“Firstly, the Tribunal failed to appreciate the distinction between an employee who is on suspension and an employee who has been dismissed, whether unlawfully or lawfully, and the different legal obligations pertaining to the different employees. An employee who is on suspension is under a legal obligation to avail himself for duty to his employer during the period of suspension and that if such employee takes employment during the period of suspension, he repudiates his contract of employment. See Zimbabwe Sun Hotels (Pvt) Ltd v Lawn 1988 (1) ZLR 143 (S). In that case, GUBBAY JA (as he then was) said at p 150:”

As a function of the law, therefore, an employee on suspension does not have a duty to mitigate his or her loss by seeking alternative employment. If this happens, on the day he or she takes up new employment, repudiation happens with the effect of ending the contract. According to Tel-One (Private) Limited v Kuyumani Zulu SC 110/04, mitigation of loss is only available to an employee who has been dismissed. As to the effect on the damages payable to the employee who would have repudiated a contract of employment, the court ruled that the employee is entitled to damages from the time his employment was unlawfully terminated to the time he or she repudiated the contract of employment.

4. Thomas Meikles Stores v Dorris Mwaita and Stella Phiri[7]

This case demonstrates the fact that repudiation also occurs when an employer makes continued employment intolerable for the employee. This may happen because of an unfair demotion effected on an employee.

The employees were buyers for the applicant company and in September 2004, they were advised of a restructuring exercise being implemented by the employer. In terms of this exercise, their responsibilities had been subsumed by other buyers in the company and they had to move to new positions dubbed section manager. In terms of the suggested changes, the employees’ salaries would remain the same. They would however not be entitled to a motor vehicle. They were also advised that if they were unwilling to take up the new positions the employer would pay them an exit package. Aggrieved, the employees refused the new positions and the exit package. Several communications were exchanged between the parties culminating in one letter sent to the employer whose language the employer took exception to. Both employees were charged and dismissed. The Labour Court found that the employees had been constructively dismissed and ordered their reinstatement. Aggrieved, the employer appealed to the Supreme Court.

In concluding that the employer had repudiated the employee’s contracts, the court accepted that the letter that was given to the employees on 30 September 2004 gave the employees only two choices, “to accept either demotion by a certain date or a pre-determined exit package”. No negotiations were to be undertaken. The court further accepted that since they did not report for duty as required, they were deemed to have been dismissed. It realised that the employer was attempting to force the employees to accept a demotion on the pretext of reassignment. The court also made an important finding that given the wording of the letter dated 30 September 2004, disciplinary action against the employees was no longer lawful because they had already been dismissed.

The two cases discussed above provide an insight into the various forms repudiation of an employment contract can happen. Several circumstances other than those already discussed above qualify as a repudiation of a contract of employment. On the employee’s side, repudiation can occur when the employee deserts employment or when the employee deliberately refusing a lawful instruction, to mention a few of such instances.

On the employer’s side, repudiation of a contract can take the form of failing to pay the employee the agreed wages and salaries, withdrawing a contractual benefit without consent, unilateral changes to an employee’s role. Indeed, as noted above, repudiation on the part of the employer may be a ground for constructive dismissal.

5. Options available when repudiation occurs

Repudiation does not automatically end a contract.[8] On the part of the employee, should an employer show the unwillingness to be bound by the contract two options are available as stated in Tel-One (Private) Limited v Kuyumani Zulu. The employee can decide can enforce his or her rights without leaving employment or can accept the repudiation, end the contract, and sue for damages. In Thomas Meikles Stores v Dorris Mwaita and Stella Phiri, the court cited Joubert, General Principles of the Law of Contract, in which it is also argued that repudiation does not end a contract of employment. The one affected by the repudiation has an option to end the contract and seek legal redress.

On the part of the employer, it is our considered submission that once repudiation happens the employer must accept the repudiation and proceed to follow the necessary procedures in terms of the applicable code of conduct. This may entail engaging in disciplinary action as provided by the applicable code of conduct. In the case of an employee who would have deserted, the employer can still engage in disciplinary action. In such cases, a hearing notification should be sent to the employees last known address and thereafter a disciplinary action can be held in absentia.

6. Conclusion

It is summarised from the overview above that the repudiation of a contract of employment happens when either an employee or an employer shows an unwillingness to be bound by an employment contract appropriately agreed by the parties. The action or omission by either party should be such that it goes to the root of the employment contract to show that continued employment is no longer tenable. The Labour Act (Chapter 28.01) provides that an employee is deemed unfairly dismissed if the employer makes continued employment intolerable for the employee. It goes without saying that an employee who is under the employ of one employer repudiates his or her contract of employment if he or she gets employed by another employer. This is so even when the employee is on suspension.

[1] Visser & Potgieter’s Law of Damages 3ed (Juta 2012).

[2] Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town p.

[3] Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town.

[4] Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town.

[5] Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town.

[6] Tel-One (Private) Limited v Kuyumani Zulu SC 110/04

[8] Tel-One (Private) Limited v Kuyumani Zulu SC 110/04

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WORKERS COMMITTEES IN ZIMBABWE: A GENERAL GUIDE

1. Introduction

Every person has a right in terms of the Constitution of Zimbabwe to freely associate and assemble with others.[1] In this article, we will explore the right to freedom of association in the workplace with a focus on workers’ committees. We outline what we consider to be the most important and crucial provisions in the Labor Act, including the essential functions of every worker’s committee. We will also assess in part, the right to appear in courts as curtailed by the Supreme Court. At the end of the discussion, it is expected that one would be well versed with an important overview of the important provisions governing workers’ committees in Zimbabwe.

2. The definition of a workers committee

In terms of the Labour Act, a workers committee means a committee appointed or elected in terms of Part VI of the Act. In terms of the relevant provisions, employees under a single employer are expected to form a workers committee to represent their interests.[2] Managerial employees are also allowed to form their own worker’s committee provided that it represents their interests only. The formation of workers committees is also entrenched in terms of section 4 of the Labour Act which precludes employers from coming up with terms of employment that compel employees to relinquish their trade union or workers committee membership or which prevent employees from taking part in the formation of such bodies. This protection entitles every employee, if he or so desires, to be part of a trade union or workers committee. The provisions, therefore, entrench the constitutional provisions already mentioned at the start of this discussion.

3. Formation of workers committees

Employees in an establishment determine the structure as well as the procedure that the worker’s committee should adopt.[3] If more than 50% of the employees are represented by a specific trade union all members of the worker’s committee must be members of that trade union.[4] In the course of appointing a workers committee, the employees have to be assisted by a labour officer or a representative of an appropriate trade union. It is submitted that an appropriate trade union in terms of section 23 represents 50%, or above, of the employees. If an establishment has several trade unions all of which do not have 50% representation the best course of action is to make use of a labour officer because no union can claim major representation in such an instance.

In the course of appointing workers committee members, the employer must ensure that he or she provides the employees with facilities for such appointments.[5] This will also include providing a place for the employees to meet during working hours. This is only acceptable provided that the employer’s business is not disturbed.[6] The employer should also provide a list of names for all employees at an establishment.

A party aggrieved by the process or appointment of workers committee members has a recourse. The dispute should be referred to a labour officer who assisted in the appointment process or if the labour officer is not present such a dispute must be referred to another labour officer.[7] The determination of such a labour officer shall be final unless the parties agree to have the matter go through voluntary arbitration.

Though not provided for in the Act,during the formation phase of a workers committee, some institutions have found it good practise to allow members of the worker’s committee to go through training before they take up their appointments. Such training covers such areas as the general provisions of the Labour Act as they affect employee representation, the right of the committee to represent employees as well as the consequences that follow such representation.

4. Functions of a workers committee

In terms of section 7(1) of the Labour Act, the formation and conduct of a workers committee is part of the employees right to democracy in the workplace. Its hindrance is explicitly precluded. In this section, we outline the major functions of a workers committee both within and without the entity, they fall under. These functions should be read together with some Supreme Court pronouncements which curtailed the functions of a workers committee especially with regards to the right to sue and be sued.

4.1. Representing employees in an undertaking

The primary function of a workers committee is to represent employees in an establishment.[8] The representation concerns anything that is of interest to the employees’ rights and interests. It is because of this power to represent employees that workers committee members can act on behalf of employees in collective bargaining agreements as well as in disciplinary hearings. So critical is this function that that section 24(2) of the Labour Act prescribes:

“where a workers committee has been appointed or elected to represent employees, no person other than such workers committee and the appropriate trade union, if any, may— (a) act or purport to act for the employees in negotiating any collective bargaining agreement; or (b) direct or recommend collective job action to the employees”.

Despite this function being broad as it is, in its role in representing employees, the worker’s committee is limited. It cannot sue or be sued.[9] Expressed differently, it is not a body corporate with the capacity to sue or be sued in its representative capacity.[10] The Supreme Court has highlighted that without this capacity, it becomes complicated if in litigation issues to do with costs were to arise because there will be no one to recovers the costs from since the Workers Committee is not a body corporate.[11]

In CT Bolts (Pvt) Ltd v Workers Committee[12] the court ruled that if the legislature intended to make a workers committee a legal persona it would have said so. It went further to ascertain that if a body has a constitution, it becomes a “Universitas”.[13] Under the common law, a Universitas is considered a body corporate capable of suing and being sued. On the face of it, one may argue that if a workers committee has a constitution it also retains the capacity to sue or be sued provided this capacity is retained in the constitution.[14]

Mindful of the common law position regarding “Universitas” the court in Gweru Water Workers Committee v City of Gweru[15] entertained the worker’s committee and awarded an order for leave to appeal and condonation for late noting of the appeal based on the fact the committee had a constitution. The constitution specifically provided for the right to sue and be sued. One might argue therefore that a workers committee with a constitution with similar provisions to the one found in the City of Gweru, can sue or be sued and will have locus standi to represent employees in a court of law. On the contrary, however, it should be noted that CT Bolts (Pvt) Ltd v Workers Committee[16] rejected that a workers committee can give itself more powers than those provided in the Labour Act. We submit that the position in CT Bolts is the correct position regarding the legal capacity of a workers committee to represent employees in court. A body cannot have more powers than those it can exercise in terms of its founding provisions. A workers committee cannot sue or be sued.

4.2. Negotiating a Collective Bargaining Agreement (CBA)

Another important function carried out by a workers committee is the capacity to negotiate with an employer, a CBA governing the terms and conditions of employment of the employees.[17] Section 24(3) limits the rights of a workers committee to collectively bargain with an employer. In that section, it is prescribed that where a trade union is existent within an establishment such must authorise in writing and give permission to the worker’s committee to negotiate with the employer. We submit that the words “only to the extent that such negotiation is authorized in writing by the trade union” found in section 24 (3) (a) are peremptory and if a workers committee does negotiate a CBA without the authority of a trade union within its establishment such CBA can be rendered void.

The other limitation to negotiating a CBA provided under the said section 24(3) is that where a CBA is present, negotiations are only permitted within the confines of the CBA. Further, it is prescribed that a workers committee can also negotiate a CBA in circumstances where the Minister of labour endorses “in writing that an issue was omitted from or included in the principal collective bargaining agreement when it should not have been so omitted or included; and further that the parties to the principal collective bargaining agreement have failed or are not in a position to reach an agreement on such an issue.”

Whilst the worker’s committee is endowed with the powers to negotiate a CBA these powers are, because of what has been discussed above, limited.

Another key point to consider regarding the committee’s powers and capacity to negotiate a CBA with the employer is the limitations inherent in the process of negotiating. In defining “negotiating”, the court in T M Supermarket v TM National Workers’ Committee[18] held that negotiation does not necessarily mean than one party has to accede to the demands of the other party. It went further to point out that refusal to award that which is asked by another party is a sign that negotiations took place.[19]

4.3. Collective Job Action

In terms of 24 (c) of the Act, a workers committee is entitled to recommend collective job action to the employees falling under its constituency. The Labour Act further entrenches this function as a right.[20] Under section 104, all employees, workers committees and trade unions have the right to resort to collective job action to resolve disputes of interest.[21] Reference to a dispute of interest in this section is of paramount importance. A dispute of interest does not involve a dispute that involves the rights of employees.[22] A dispute of interest entails the creation of new rights.

It is also important to note that the right to recommend a collective job action is not unfettered. Section 104 discussed above prescribes conditions under which a lawful collective job action can be recommended and executed. Among several safeguards, a workers committee should recommend a collective job action after giving the required 14 days’ notice and the dispute has been conciliated upon.[23]

Failure by a workers committee to adhere to the basic requirements for recommending a collective job action may make it liable for damages emanating from an unlawful strike. The Act also provides for circumstances where a workers committee can recommend or engage in a collective job action without having to go through the cumbersome procedure mentioned above.[24] Such circumstances include were a health and safety issue is present which causes an imminent danger to the employees or in instances where the committee seeks to defend “an immediate threat to the existence of a workers committee or a registered trade union”.[25]

4.4. Role in the Works Council

Section 24 (d) of the Act provides that some members of a workers committee may be voted into a works council in establishments where a works council is present. To also entrench this right, the Act further prescribes it as a requirement that a works council is mandatory in all establishments where a works committee is present.[26]

A works council shall have an equal number of employer representatives and employee representatives. The major roles of the works council include the fostering of participation between management and employees, to encourage good relations between the employer and the employee as well as the promotion of general and common issues of “interest, including the health, safety and welfare of both the establishment and its workers”.

The presence of a works council in the workplace is not ceremonial. The Act designates certain acts that cannot be undertaken by the employer without consulting with the worker’s committee. The wording of the Act indicates that actions taken by an employer without the involvement of a workers committee. (arbitrary actions by an employer) maybe invalid and in this respect, Section 24A (5) of the Act reads:

“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— (Own Emphasis)

The words, “shall be entitled to be consulted” imposes an obligation on the employer to consult with the works council. An employer is expected to allow members of a workers committee to make representations, and to put across alternative proposals on an issue, and to generally attempt to reach a consensus with the members of the worker’s committee before making a decision.

An outline of the issues that the works council must be consulted on are as follows[27]:

the restructuring of the workplace caused by the introduction of new technology and work methods;
product development plans, job grading and training and education schemes affecting employees;
partial or total plant closures and mergers and transfers of ownership;
the implementation of an employment code of conduct;
the criteria for merit increase or payment of discretionary bonuses;
the retrenchment of employees, whether voluntary or compulsory.

5. Unfair Labour Practises Committed by a Workers Committee

Act 7 of 2005 introduced an important concept in our labour laws.[28] This is the designation of certain acts as unfair labour practises that can be committed by the worker’s committee. It is important for anyone involved in workers committee issues to be well versed with the concept of unfair labour practise as it applies to employees and their representation. Once an act has been designated as an unfair labour practise it has to go through the dispute resolution mechanism provided for under Section 93 of the Act.[29]

The list of unfair labour practises that can be committed by a workers committee include preventing an employee from exercising rights in terms of the Labour Act, failure to represent an employee’s interests in connection with issues arising from the Act as well as failure to comply with a CBA among other issues.

6. Conclusion

The worker’s committee is a body of employee representatives endowed with the power to champion workers’ rights in the workplace. This is a critical role. It has been explained that the function of a workers committee does not extend to representing employees in courts. In exercising its role as representatives of employees the worker’s committee has the power to recommend collective job action and to engage in collective bargaining with the employer. All these functions are important in fostering industrial relations and the right to democracy in the workplace.

[1] Section 58 (1) of the Constitution of Zimbabwe provide that “every person has the right to freedom of assembly and association, and the right not to assemble or associate with others”.

[2] Section 23 of the Labour Act (Chapter 28:01).

[3] Section 23 (1a) of the Labour Act (Chapter 28:01).

[4] Section 23 (1b) of the Labour Act (Chapter 28:01).

[5] Section 23 (2b) of the Labour Act (Chapter 28:01).

[6] Section 23 (2c) of the Labour Act (Chapter 28:01).

[7] Section 23 (2f) of the Labour Act (Chapter 28:01).

[8] Section 24 (1) of the Labour Act (Chapter 28:01).

[9] Cold Storage Company National Workers Committee v Cold Storage Company Limited HB 8/2002.

[10] Cold Storage Company National Workers Committee v Cold Storage Company Limited HB 8/2002.

[11] Cold Storage Company National Workers Committee v Cold Storage Company Limited HB 8/2002.

[12] CT Bolts (Pvt) Ltd v Workers Committee SC 91/11.

[13] CT Bolts (Pvt) Ltd v Workers Committee SC 91/11.

[14] CT Bolts (Pvt) Ltd v Workers Committee SC 91/11.

[15] SC59/13.

[16] CT Bolts (Pvt) Ltd v Workers Committee SC 91/11.

[17] Section 24 (1)(b) of the Labour Act (Chapter 28:01).

[18] T M Supermarket v TM National Workers’ Committee SC 19/04.

[19] T M Supermarket v TM National Workers’ Committee SC 19/04.

[20] Section 104 of the Labour Act (Chapter 28:01).

[21] Section 104 of the Labour Act (Chapter 28:01).

[22] Section 2 of the Labour Act (Chapter 28:01).

[23] Section 104 of the Labour Act (Chapter 28:01).

[24] Section 104(4) of the Labour Act (Chapter 28:01).

[25] Section 104(4)(b) of the Labour Act (Chapter 28:01).

[26] Section 25A (1) of the Labour Act (Chapter 28:01).

[27] Section 25A (5) (a) of the Labour Act (Chapter 28:01).

[28] Section 25A (5) (a) of the Labour Act (Chapter 28:01).

[29] Section 93 of the Act designates for the conciliation and arbitration of all disputes of interests.

11,775 Views

ISOQUANT INVESTMENTS PRIVATE LIMITED T/A ZIMOCO v MEMORY DARIKWA (CCZ 6/20)

“The analysis shows that there is a difference in the legal treatment of a party who has already obtained a final decision on a claim and one who has obtained “a draft ruling” in terms of s 93(5)(c) of the Act. The two parties are not similarly situated. The difference in the remedy available to them is justified by the nature and effect of the procedure adopted for the resolution of the dispute of right or unfair labour practice involving a dispute of right.”

Category: Conciliation process, powers of designated agents for the NECs.

Introduction

Act 5 of 2015 brought about important changes in our labour laws. These changes have to some extent resulted in confusion and misinterpretations. In this case, the CCZ took the opportunity to clarify the procedures that can be undertaken by a designated agent seized with an unfair labour practice matter. This case is also important in illustrating the importance of a draft ruling as well as the process a Labour officer or a designated agent should follow in order to come up with the draft ruling. It is important to note that the main question before the court was in connection with the referral of a constitutional matter from a lower court. The most important lesson from this judgement is that a lower court can only refer to the CCZ a matter that is within its jurisdiction.

Facts

Between 21 July 2015 and 14 August, 2015 ZIMOCO terminated on notice contracts for17 of its employees. The employees demanded minimum retrenchment packages as provided under section 12C of Act 5 of 2015. The matter was brought before a designated agent for the NEC: Motoring Industry. Conciliation was done and the designated agent proceeded to produce a determination. In the determination, she concluded that ZIMOCO had to pay the minimum retrenchment package as per the requirements of section 12C mentioned above.

The designated agent brought the matter before the LC to have her draft ruling confirmed as per the requirements of the LA as amended in 2015. The applicant company challenged the constitutionality of the confirmation proceedings on the basis that the whole process violated its constitutional right to equal protection of the law and administrative justice among others. For these reasons ZIMOCO requested that the matter be brought before the CCZ for a determination of the constitutional questions.

The Courts Reasoning

Referral of constitutional issues

The CCZ noted that the only question that was before it was whether the matter had been correctly presented to it for adjudication.

The court pointed out that for a subordinate court to refer to it a constitutional question the matter so referred must be in connection with proceedings that are validly before that subordinate court. In other words, the matter must be validly before the Labour Court for it to then be able to refer a constitutional question the CCZ. This further means that the matter must be before the subordinate court through “a method prescribed by the law”.^[1]

The labour court as a creature of statute

The CCZ highlighted that the LC is a creature of statute. This meant that it can only do that which it is permitted to do by the enabling legislation, the Labour Act. Being a creature of the statute the labour court was bound to exercise jurisdiction over a matter falling within its competence, provided the correct procedure had been followed.^[2] Part of this procedure is compulsory conciliation of a dispute brought before the labour officer.

In the judgment, the CCZ in illustrating the importance of complying with the prescribed procedure stated that:

“This means that a matter that is not a product of compliance with the procedural and substantive requirements of these provisions would not fall within the class of matters over which the Labour Court would have jurisdiction in terms of s 93(5a) of the Act. It would not be a matter which would be the subject of the procedure for bringing such matters to the court a quo, as prescribed under s 93(5a) of the Act. Bringing such a matter to the court a quo, under the guise of invoking the procedure prescribed in the subsection, would not validly institute proceedings in that court in terms of s 93(5a) of the Act. The court a quo would not have a valid matter over which to exercise jurisdiction.”^{^[3]}

Conciliation of disputes

The CCZ made a finding that the conciliation of disputes is the compulsory method of resolving all disputes and unfair labour practises referred to a labour officer.^[4] It explained the importance of conciliation as a method of resolving labour disputes by agreement. It also explained the functions of a conciliator as per the labour act. One should go through pages 11-19 of the judgment to fully appreciate what should happen in the conciliation process.

Importance of a certificate of no settlement

When conciliation fails or at the expiry of the requisite time for the conciliation a labour officer is compelled to issue a certificate of no settlement. The court remarked that a certificate of settlement should be issued after parties, with the assistance of the labour, have gone through a genuine process of conciliation.^[5] The court noted that conciliation does not require that parties submit a statement of claims and responses when it remarked as follows:

“It would not be compliance with the requirements of a compulsory process of conciliation, provided for under s 93(1) of the Act as a pre-condition for the issuance of a certificate of no settlement, to call upon the parties to submit statements of claims and responses followed by submission of heads of argument before a certificate of no settlement is issued.”

Once a certificate of no settlement has been issued, the court remarked, the next stages in dispute resolution would kick in. In the case of a dispute of right, the labour officer will proceed to produce a draft ruling which has to be confirmed by the court. In the case of a dispute of interest, the matter will be referred for arbitration.

Draft ruling

Once conciliation fails, the parties are no longer responsible for the settlement of the dispute as the labour officer is now duty-bound to come up with a draft ruling on the merits of the matter as per the requirements of the LA. This applies to all disputes of right.

The CCZ pointed out that a draft ruling is not enforceable. It cannot be appealed or reviewed against. It is made pending the final court outcome.^[6] It also confirmed the position found in Drum City v Brenda Garudzo SC57/18 which case is an authority to the fact that an employee must be joined in confirmation proceedings before the LC.

Drum City v Brenda Garudzo SC57/18

THE CCZ noted that this case had been used as authority to the proposition that a draft ruling made against an employee should not be confirmed by the LC. It ruled that this was not the case and it remarked:

“One cannot interpret the Drum City (Pvt) Ltd case supra as authority for the proposition that it would only be cases where a “draft ruling” has been made against the employer that confirmation proceedings would ensue. The remarks were made as an obiter dictum. The ratio decidendi of that case is that an employee must be joined in confirmation proceedings”

The importance of these remarks is that draft rulings either made for or against an employee will have to be confirmed by the LC as a matter of compliance with the procedure prescribed by the LA.

Confirmation of the Draft Ruling

The court process of confirming a labour officers draft ruling was described by the CCZ as follows:

“Confirmation of a draft ruling is a legal process. The judicial officer in the Labour Court is tasked with applying the principles of the law to the facts. He or she is not merely rubberstamping the “draft ruling” of the labour officer. The judicial officer is required to thoroughly investigate the matter. A judicial officer is bound by the law of confirmation. He or she must research the procedure and the applicable law”

The role of a designated agent

The CCZ noted that Designated Agents of NECs are empowered to redress/remedy an unfair situation in their areas of jurisdiction. This is in terms of section 63(3a) read together with (63b). Once the designated agent has redressed the dispute in terms of these sections, then section 93 of the LA does not apply. The matter can only be brought before the LC by way of an appeal or a review.

It also noted that a designated agent can redress a dispute or to attempt to redress the dispute.^[7] Section 93 will therefore only apply if the dispute has not been redressed. In this instance, the designated agent would have attempted to resolve the dispute through conciliation. Critically the court mentioned:

“Section 93 of the Act does not create an avenue for the validation of a final decision that is made by a designated agent in terms of s 63(3a) of the Act. It only creates an avenue where a designated agent adopted the process of attempting to settle the dispute through conciliation in accordance with the provisions of s 93 of the Act.”

In the present case, the court argued that the designated agent had made a final decision which was final. Section 93 of the act could not apply. A certificate of the settlement could not be issued. In the absence of the certificate of the settlement, she couldn’t be deemed to have been attempting to settle the dispute. No dispute could be resolved by way of conciliation. It was on this basis that the court concluded that the proceedings before the LC were a nullity as section 93 could not be used as the basis for approaching Labour Court.^[8]

Conclusion

As a result of the above reasoning, the court concluded that the matter was not properly before the labour court. The LC could not, therefore, refer these constitutional questions to the CCZ. In the result, the application was dismissed with the consent of the parties.

*END*

[1] Isoquant Investments Private Limited T/A ZIMOCO v Memory Darikwa (CCZ 6/20) p8

[2] Ibid at p9

[3] Ibid at p28

[4] Ibid at 10

[5] Ibid at 11-19

[6] Ibid at p22

[7] Ibid at p30

[8] Ibid at p31

4,465 Views

HWANGE COLLIERY COMPANY LIMITED V BENSON NDLOVU AND ANDREW NDLOVU (SC46/20)

“What all the authorities point to is that the discretion of the employer must be respected. It is not just a question of the appellate court, in the comfort of its chambers or courtroom, deciding to substitute its own discretion merely because it holds a different view from that of the lower court.”

Categories: Strike Action, Discretion to dismiss

Introduction

What happens when an employee admits to committing an offence during a disciplinary hearing? What are the legal implications of such an admission? Hwange Colliery Company Limited v Benson Ndlovu and Andrew Ndlovu answers these questions, among others.

Facts

Between the 14^thand the 18^th of October 2013, there was an illegal strike at perpetrated against the appellant company. 3200 men and women were involved in this action. The two respondents were charged for engaging in the illegal action and were dismissed by the respondent company. It is important to note that the employees pleaded guilty to the charges laid against them. Internal appeals also failed as they were held to have admitted to the charges. They appealed to the labour court which upheld their appeals setting aside the penalty of dismissal. The LC ruling founded the current SC challenge.

The Courts Reasoning

Singling out the respondents

The labour court had a problem with the fact that the respondents were singled out, out of a group of employees that was involved in an illegal strike. It was also of the view that not enough evidence had been provided to convict the respondent employees. The SC did not agree. It contended that there was a rich line of precedent from it which point to the fact that it is “not uncommon for the alleged ringleaders in any unlawful gathering or action to be singled out for punishment.” It concluded that it accepted that selective prosecution is acceptable in as far as illegal strikes are concerned.

Discretion to dismiss the respondent

The SC argued that a court must be slow in interfering with the employer’s discretion to dismiss an employee where the employee’s conduct goes to the root of the employment relationship. In buttressing its position, the court remarked as follows:

Indeed, a court will not willingly interfere with an employer’s discretion to dismiss an employee.

Admitted charges

The LC was of the view that the appellate company was supposed to lead evidence to explain what the respondents did to warrant dismissal. The SC did not find this as necessary since the employees had admitted that they were guilty to the charges raised by the company. The net effect of an admitted act is that there is no need to adduce any evidence.

The SC came to this conclusion after correctly noting the case between DD Transport (Pvt) Ltd v Abbot were the court argued that:

“But this admission in the plea is of the greatest importance, for it is what Wigmore (paragraphs 2588-2590) calls a ‘judicial admission’ (of the confession judicialis of Voet (42.2.6) which is conclusive, rendering it unnecessary for the other party to adduce evidence to prove the admitted fact, and incompetent for the party making it to adduce evidence to contradict it —“.

In effect, there is no need for an employer to adduce any evidence when an employee admits to committing the offence in question.

The appeal was upheld, and the dismissal of the employees was consequently upheld.

Own Comment

The bottom line in terms of the principles confirmed, in this case, is that the employer retains the right to dismiss an employer where the act complained of goes to the route of the employment relationship. Courts will be slow to interfere with the exercise of such discretion. This case also confirms what is common knowledge in Zimbabwean labour law. A few employees may be singled out for disciplinary action concerning an illegal collective job action. This judgement was well reasoned and serves as a good reminder of the basic principles of the law on collective job action.

2,589 Views

ALBERT JAVANGWE v VORTIGEN IVESTMENTS PRIVATE LIMITED T/A CPL (SC 49/20)

“There was, therefore, no need for the re-registration of the respondent’s code. The respondent correctly used its code in disciplining the appellant. The appellant was therefore charged and dismissed in terms of the correct code of conduct.”

Category: Re-registration of a code of conduct

Introduction

In this summary, I point out one important principle that was highlighted by the SC in this case. The long and short of it is that there is no need for a company to reregister its code of conduct were an NEC code is repealed and a new one is promulgated provided the new NEC Code ratifies the already registered company codes.

Facts

The appellate employee was dismissed for unsatisfactory performance. The code of conduct used was the respondents. On appeal, the dismissal was also confirmed. He applied for review at the LC which review was dismissed. The basis of the review was that the code of conduct that had been used was not ratified by the NEC in terms of s101 of the LA. The background was that in February 2009 the NEC had registered the employer’s code. The registration was necessitated by the fact that the NEC had come up with its code. In 2012 the NEC came up with a new code. The appellant employees’ argument was that the employer had to make sure that code was ratified once again.

The Courts Reasoning

Was the code approved?

The SC made an important finding that the new code published by the NEC provided that there was no need for old codes to be reregistered. It took into consideration the old statutory interpretation dogma which posits that the ordinary grammatical meaning of words in a statute should be used unless if that would lead to absurdity. In this regard the SC remarked:

“The legislature in enacting s 4.1 of S.I. 175/12 which expressly provides that it was not to be used for employees who already had registered company codes must be presumed to have applied its mind to the possible effects of requiring re-registration of company codes which were already in existence. The grammatical construction of s 4.1 of S.I. 175/12 clearly proves that the legislature intended to establish a blanket approval of all pre-existing codes to avoid an absurd scenario of re-registration of pre-existing codes it had previously approved. Section 4.1 cannot, therefore, be said to be inconsistent with the Act.”

The resubmission of the employer’s code under the circumstances was deemed to be inconsistent with the intention of the crafters of the code of conduct.

The SC had no option but to dismiss the appeal.

Own Comment

This decision of the SC is spot on. There was no need to register the code where the legislature was clear on what parties were expected to do.

2,008 Views

TAFADZWA M SAKAROMBE AND WONDER SIMUKA v MONTANA CARSWELL MEATS PRIVATE LIMITED (SC 44/20)

“In my view, the principle emerging from all the authorities referred to above can be summarized by the statement to the effect that a labour officer does not have any jurisdiction under s 93 to entertain a matter once a determination on the merits has been made through a disciplinary process under a registered code of conduct. It is clear that the labour officer presided over a matter over which she did not have any jurisdiction.”

Categories: Appeals against completed hearings under a code of conduct, Powers of labour officers.

Introduction

Tafadzwa M Sakarombe and Wonder Simuka v Montana Carswell Meats Private Limited is a matter that has similarities with Misheck Mabeza v Sandvik Mining and Construction (Private) Limited[1] which was decided in 2019. Both matters scrutinise that role of labour officers and come to the same conclusion that a labour officer does not have the jurisdiction to resolve a dispute that is emanating from a completed disciplinary process. The current matter goes a step further to order that the Minister of Labour be appraised of the inconsistencies in the national code with a view to rectify the anomaly.

Facts

The second appellant was the respondent’s employee who was dismissed on allegations of theft and fraud. Internal appeals failed as the dismissal was upheld. He approached a labour officer with an allegation that he was unfairly dismissed. The labour officer conciliated the dispute. Conciliation failed leading to a certificate of no settlement. A ruling was made in favour of the employee. Aggrieved by this ruling an appeal was lodged by the respondent company at the LC. The LC on hearing the appeal confirmed the dismissal of the employee. It was this judgement that was brought to before the SC by the aggrieved employees.

The Courts Reasoning

The SC as a starting point was worried about the procedure adopted by the parties to this dispute, the labour officer included. It went on to assess authorities that have decided on the ambit of the jurisdiction of a labour officer under section 93 of the LA where a matter is referred to him in terms of the national code.

Two important cases were taken into consideration by the supreme court. These cases illustrated the importance of section 101(5) and (6) of the Labour Act as far as prescribing the parameters within which a labour officer can exercise his or her jurisdiction.

Mwenye v LONRHO Zimbabwe 1999(2)429 (S)

In this case, the supreme court took into consideration the remarks of the court including where it said:

“…Section 101 (5) of the Act is, in effect, an exception to s 93. It is a provision designed for the benefit of the parties. As long as the dispute or matter is:

(a) the subject of proceedings under a code; or

(b) liable to be the subject of proceedings under a code; no labour relations officer may intervene. His power to determine or otherwise dispose of the matter under s 101 (6) is placed in abeyance for a period of thirty days. This is to afford the parties, should one of them so wish, the opportunity to utilize the internal mechanisms specified in the code. Consequently, if either party were to refer the matter to a labour relations officer before the expiry of the third day period, the other could raise s 101 (5) as a defence.”

Watyoka v Zupco (Northern Division) 2006 (2) ZLR 170

The remarks, in this case, were also taken into consideration. For purposes of this summary the significant remarks can be outlined as follows:

“Subsection (6) of s 101 provides for a referral of the matter to a labour relations officer if it has not been determined within thirty days. It does not provide for a referral of a matter that has been determined. The referral to a labour relations officer is a relief granted to a party who is concerned about the delay in the determination. It is not a referral intended to challenge a determination that has already been made.”

The importance of the abovementioned authorities is that they displayed that a labour officer cannot have jurisdiction to hear a matter that has been completed in terms of the code of conduct.

A labour Officer as a creature of statute

The SC also highlighted that a labour officer is a creature of statute. This means that the office of a labour officer is created by the LA. Since it has been created by the Act the labour officer cannot exercise more powers than those provided for in the same act.

Powers of labour officers

In addition, the SC also noted that under section 93 a labour officer is entitled to conciliate a dispute and to give a ruling when such conciliation has failed. The powers under this section do not include the power to hear appeals emanating from disciplinary issues. In the current case, the labour officer had entertained an appeal and had reversed the decision of an appeals official which meant that his actions were outside the confines of the enabling Act.

Section 101(5) and (6) of the LA

As in Misheck Mabeza v Sandvik Mining and Construction (Private) Limited the Supreme Court noted that Section 101(5) and (6) precluded a labour officer from entraining a dispute that is a subject of a code of conduct unless if the matter is not determined within 30 days in which case the employee or the employer may refer such a dispute to a labour officer. Such a labour officer will then have to deal with the matter in terms of section 93 of the Labour Act. The SC as a result decisively remarked that,

“In this context the implications of what the labour officer did are obvious. First, she assumed jurisdiction to entertain a matter which the law did not sanction. An appeal against proceedings under the code can only lie to a court or a tribunal which is empowered by law to act as an appeal court or tribunal. In casu, the labour officer assumed unto herself the jurisdiction that is imbued by law in an appellate court or tribunal. A labour officer is not an appeal structure for purposes of s 93 of the Act, nor can that power be read into the section no matter where the referral of a dispute or matter emanates from.

As a result of the above, the supreme court’s finding was that the proceedings undertaken by the labour officer were a nullity. It noted that the matter was supposed to have been brought to the labour court as an appeal.

Own Comment

The judgement is clear cut. As mentioned earlier on it confirms the court’s findings inMisheck Mabeza v Sandvik Mining and Construction (Private) Limited. It noted that the confusion between the Labour act and section 8(6) should be rectified. This, it is submitted, can be done by way of an amendment. Such an amendment can be effected on section 93 to broaden the powers of labour officers and designated agents. The amendment should provide that labour officers have the power to hear appeals emanating from disciplinary hearings.

[1] Misheck Mabeza v Sandvik Mining and Construction (Private) Limited (SC91/19)

2,947 Views

EMMA KUNDISHORA v ZIMBABWE RED CROSS SOCIETY (SC 48/20)

“The Honorary Treasurer acknowledged that he had no authority to do so and took “full responsibility” of the mistake. Once the statement was duly retracted, its validity and enforceability necessarily fell away. The communication made by the Honorary Treasurer could not bind the respondent neither could it be enforced against it.”

Categories: Turquand Rule

Introduction

The dispute turned on whether an undertaking to offer certain benefits on separation would bind a company if such an undertaking was made by someone who did not have the requisite authority. Organisations are juristic persons. They function through officials appointed to run such organisations. Not all officials in an organisation have the authority to make decisions on behalf of the organisation.

From a company law perspective, people dealing with organisations are protected against prejudice in case someone without the requisite authority decides or purports to make a decision which binds the company. As mentioned, this is a company law principle but also affects labour law to the extent discussed in this case. Its origin can be traced back to an old case between Royal British Bank v Turquand (1856) hence the rule has become known as the Turquand rule.

Facts

The applicant was the respondent’s Secretary-General for years. The national governing council for the respondent expressed concern over her performance. It gave her the option of resigning or face a suspension pending investigations into her conduct. She opted to resign on the 3^rd of June 2012. In acknowledging her resignation, the Acting President of the organisation set out what the applicant was entitled to as benefits on separation. This included a Toyota Prado. On the 6^th of June 2012, the Honorary Treasurer wrote to the appellant that the respondent will bear the costs of transferring the vehicle.

On 2 March 2013, the treasurer was reprimanded by the council for issuing communication without its mandate. The Honorary Treasurer wrote to the appellant retracting the statement regarding the pronouncement that the respondent will bear the costs of transferring the vehicle into the hands of the appellant.

Aggrieved, the appellant lodged a complaint with a labour officer demanding a sum of USD 17500 being the costs for the transfer of the vehicle. Conciliation failed and an arbitrator ruled that the respondent had to honour the commitment made by its treasurer. The respondent was not happy with the finding and appealed to the LC. The LC ruled that the turquand rule did not apply and that the employee was not entitled to the claim. The appellant employee was not satisfied thus lodging the current SC appeal.

The Courts Reasoning

Among other findings, the court noted that the fact that someone holds an important position in an organisation does not mean that such a person has the authority to make decisions on behalf of the organisation.

It also further noted that when the treasurer, in this case, retracted the statement binding the respondent company the appellant could not rely on the same statement as its enforceability fell away. This was compounded by the fact that the appellant knew how the organisation functioned including that the treasurer had no authority to produce such a binding statement.

The SC relied on the matter between Victoria Falls Steam Train Co (Pvt) Ltd v Wankie Colliery Co Ltd, HH-03-04. In this case, the court had explained the turquand rule and how it would apply. This court had come to the following conclusion:

“The rule in Royal British Bank v Turquand (1856) 6 E & B 327, 119 ER 886, which prevents a corporation from relying on non-compliance with its internal procedures to avoid contractual liabilities towards a third party, applies only where the third party was a genuine outsider acting in good faith, and where the transaction was carried out in good faith and was a legitimate one within the powers of the corporation though lacking completeness in terms of the corporation’s internal arrangements. The rule does not apply in cases where there has been a forgery, nor should it apply in the analogous case where the transaction has been carried out in deliberate violation of the internal procedures of the corporation.”

The SC argued that the appellant could not be protected in terms of this rule. The communication was made in breach of internal processes. The treasurer did not have the mandate to act in the way he did. The binding nature of the communication immediately fell away as a result thereof.

As a result of the above, the labour courts decision was confirmed by the SC.

Own Comment

The basic principles outlined in this case are of great importance. The company could not be bound by a communication made by someone who did not have the authority to make such communication on its behalf. It followed that the appellant couldn’t be protected by the rule that she sought to invoke and rely on. We submit that the important lesson from this case it that ex-employees who are aware of the processes in organisations they separate with cannot be protected by the Turquand rule.

2,951 Views