Category: 2018 Case Law Review

CITY OF GWERU v RICHARD MASINIRE (SC 45/13)

” This line of argument is defective and unsustainable at law, because the Urban Councils Act is subservient to the Labour Act. In terms of s 2A of the Labour Act, the Legislator has decreed it to prevail over any other enactment inconsistent with it. What this means is that whatever the provisions of the Urban Councils Act might be, they cannot exclude the application of the Labour Act to any employee. It is only the Constitution and the President by statutory instrument that can override the application of the Act over any employee.”

Introduction

Prior to 2005, the termination of employment of senior council officials could not be done in terms of the Labour Act. The Urban Councils Act excluded the jurisdiction of the labour act in such matters. This important change in our law is illustrated in City of Gweru v Richard Masinire. In my view, the most crucial illustration, in this case, is the fact that the labour Act now prevails in all instances were any act is inconsistent with it.

Facts

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

  • The respondent was employed as the chamber secretary (Town Clerk) for the town council.
  • He was a senior official of the council in terms of the Urban Councils Act.
  • The council dismissed the employee in terms of the National Employment Code of Conduct, SI 15 of 2006.
  • The employee was aggrieved by the decision as he felt that the Urban Councils Act should have been used to facilitate his dismissal from employment.
  • The Labour Court upheld the argument and nullified the proceedings that had been carried out in terms of the National Code.
  • It was this Labour Court judgement that the council was aggrieved with thus founding an appeal at the Supreme Court in terms of the relevant rules.

Reasoning

The court noted that the Urban Councils Act did not provide for a procedure that had to be followed in order to dismiss an employee such as a Town Clerk. It only provided for a procedure where the Town Clerk in the person initiating disciplinary action. It thus was absurd, in the court’s opinion, for the town clerk to initiate his own disciplinary proceedings.  This undesirable situation thus left a void which could only be filled by the national code.

The Supreme Court further noted that the Labour Act, in terms of its section 3, clearly indicated that it applied to all employee’s excerpt those that are specifically excluded from it. Those excluded include employees whose conditions are governed by the constitution, members of the public service, and members of the disciplined forces. The importance of this section is it did not exclude the Town Clerk from the ambit of the Labour Act. This thus meant that the town clerk could be dismissed in terms of the act and within the confines of the National Employment Code.

With regards to section 3 of the Labour Act, the court thus remarked as follows:

“The section is couched in clear and unambiguous peremptory terms, such that the problem of interpretation does not arise at all. All that the lawgiver is saying is that the Labour Act applies to all employees except those it expressly excludes from its domain. In other words, the Labour Act applies to all employees except those whom the legislator has expressly excluded from its application.”

In addition, the court found that section 12B of the Labour Act provided that an employee could be dismissed in terms of the national code where an establishment does not have its own code. The court concluded that since the Urban Councils Act could not be used in the current case, for reasons alluded to earlier in this article, the parties could not be left without a remedy. The National Code thus became appropriate. The court thus noted:

“Considering that it is undesirable for parties to a dispute to be left without an appropriate mechanism of resolving their labour disputes, like professor Madhuku and CH Mucheche, I consider that s 12B (2) (b) should be given a broad purposeful interpretation to include circumstances where an existing internal code of conduct or dispute resolution mechanism cannot for justifiable reasons apply to a particular case. It, therefore, appears to me that the legislator intended the model code of conduct to be a fall-back labour dispute resolution mechanism where it is impossible or inappropriate for a good reason to apply any other dispute resolution mode. To that extent, it is a universal disciplinary code of conduct fitting all circumstances according to the exigencies of each case within the confines of the Labour Act.”

Judgment

The judgement of the labour court was dismissed, and the appeal allowed to succeed.

1,872 Views

ZIMBABWE ASSEMBLIES OF GOD AFRICA (ZAOGA) v KASIKAI MASHONGANYIKA SC 43/18

Introduction

The case dealt with the question of whether a party to a labour dispute can be represented by a labour consultant during arbitration proceedings. This case is important in so far as it shows that a representation in Labour Court Proceedings is more restricted as compared to Arbitration proceedings.

Not related to this current matter is it important to note that the legislature has enacted Statutory Instrument 8 of 2018 which now explicitly excludes parties from being represented by labour consultants in the Labour Court.

Facts

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

  • A dispute between the employer and the employee was referred for arbitration after conciliation had failed.
  • At arbitration, the employee was represented by a labour consultant.
  • The employer argued that the employee could not make use of a labour consultant in such proceedings.
  • The arbitrator and subsequently the Labour Court upheld the argument that the labour consultant could represent a party in arbitration proceedings.
  • Aggrieved by the Labour Courts decision, the employer appealed to the Supreme Court.

Reasoning

The court’s finding was clear cut leaving no room for misunderstanding.

As a starting point, the court made an important observation that the Labour Act provisions which the appellant was relying on did not affect the position in the Arbitration Act.

The appellant argued that in terms of S92 of the Labour Act only a Legal Practitioner or an official of an employer’s or an employee organisation can represent a party to a labour dispute in the Labour Court. It attempted to reconcile this section with section 98(9) which provides that an arbitrator shall have the same powers as the Labour Court. The argument was meant to show that because an arbitrator has the same powers as the Labour Court it cannot be possible for an arbitrator to entertain parties represented by labour consultants. The arbitrator was thus bound to follow provisions of labour act and ignore what the arbitration act says, the argument continued.  The supreme court did not agree.

The accepted legal position that was supported by the Supreme Court is one in which a labour consultant can represent a party in arbitration proceedings. Article 24 of the Arbitration Act is clear on who can represent a party during such arbitration and in that regard, this can be any person of a party’s choice. The words “any person of their choice” were deemed to include labour consultants as opposed to excluding them. the court thus remarked that:

“The word ‘person’ in the provision cited above does not come with any qualification except that such a person should be of the relevant party’s choice. This circumstance makes the ambit of Article 24(4) wider than that prescribed in s 92 of the Act. The person chosen by a party can, therefore, be anyone, even a legal practitioner or an official or employee of a registered trade union or employer’s organization, as envisaged in s 92 of the Act.”

Judgment

The appeal was dismissed for lack of merit.

5,869 Views

Drum City (Private) Limited v Brenda Garudzo (SC 937/17)

“It is to be noted from the above, that only if the labour officer rules against the employer or any person will he or she be required to take the steps outlined in ss (5a) and (5b). In other words, the provisions do not confer on the Labour Court the jurisdiction to confirm a draft ruling made against an employee.”

Keywords

LC: Labour Court

Introduction

Drum City (Private) Limited v Brenda Garudzo is a matter that makes a case for the need to join employees in confirmation proceedings under section 93 of the Labour Act as amended in 2015. It outlines the procedural and substantive challenges that can be faced if an employee is not joined to such confirmation proceedings. The case also makes an important finding that a LC does not have jurisdiction to entertain confirmation proceedings when an employee is a losing party when a draft ruling is produced by a labour officer.

Facts

The following facts culminated in the matter under consideration:

  • An employee was dismissed for misconduct around April 2015.
  • Aggrieved by the decision to dismiss her the employee filed a complaint in terms of section 93 of the Act. The labour officer decided the matter in favour of the employee leading to confirmation proceedings in terms of the 2015 amendments.
  • The employee was not cited as a party to the proceedings at the LC.
  • The LC confirmed the ruling even though the labour officer who made the ruling was not present.
  • The employer then appealed to the Supreme Court and again the labour officer did not attend the proceedings. The employee was again not cited as a respondent.
  • The supreme court noted that without joining the employee whose interests are subject of the dispute, the LC had made a fatal error in the conduct of the proceedings.

Reasons for the judgement

The court noted that there is a need to join an employee who is subject to confirmation proceedings each time the proceedings are before the LC. This will allow such an employee to respond to all the allegations that would be raised.

Joining the employee will prevent a situation where an employee suffers prejudice because the labour officer who is not an interested party a matter decides not to be part of the proceedings as noted in this case. The employee affected by the ruling can apply to be joined in the proceedings. The LC can also out of its own accord join an employee as a party to the proceedings.

The court noted that when a draft ruling has the effect of making an employee the losing party such a ruling cannot be brought before the LC for confirmation. It interpreted the words “…or any other person” in section 93(5a) of the Act as not referring to the employee who brought a matter before the labour officer. The LC thus does not enjoy jurisdiction to entertain such confirmation proceedings.

Determination

The court decisively remarked:

“When all is said and done and in view of the foregoing, it is my finding that there was a fatal non-joinder of the employee, Ms Khan, to the proceedings a quo. Such proceedings can therefore not be allowed to stand.”

The matter was remitted back to the LC for consideration of the merits of the matter.

Own comment

This case is a must-read. It provides an important insight into some of the implications that came with the 2015 amendments to the Labour Act. It is amongst a plethora of cases that indicate that some of the provisions in the 2015 amendments were not properly thought through. The fact that LC has no jurisdiction to entertain confirmation proceedings were a ruling is not in favour of the employee is an important and far-reaching finding. This matter should not be ignored.

1,582 Views

St. Giles Medical Rehabilitation Centre v Patsanza (SC 59/18)

“This provision is clear and requires no interpretation. It seems to me that the provision provides that where an employer decides to include a probationary period in the contract of employment then that period is not renewable. The court a quo in my view correctly found that the use of the word “may” in the above section relates to the employer’s discretion to engage an employee either on probation or immediately into a substantive position. Once a probationary period is given by an employer then it can only be a “single, non-renewable” period”.

Introduction

This dispute boiled down to whether a probationary period can be extended. This is a big legal question in my view. Employers may be faced with a situation where an employee needs seemingly need more time to improve work performance. Such employers may dread giving this employee a permanent appointment. The temptation in this instance is thus to extent the period of probation. Patsanza precludes employers from extending the probationary period.

Facts

The respondent, Lambert Patsanza was employed subject to a three months probationary period. The appellant, St. Giles Medical Rehabilitation Centre, decided to extend the probationary period by a period of one month in an attempt to allow the employee to improve his work-related performance. The employer terminated the contract after the expiry of the one-month extension. The employee argued that his termination was unlawful as he had become a permanent employee. The arbitrator and the Labor Court made the decision that the termination had been unlawful. It was based on the decision of the Labor Court that the current matter was before the supreme court.

Reasoning

The court reasoned that the purpose of a probationary period is to assess an employee’s performance. This probationary contract is different from the contract that follows when an employee completes the probationary period and is appointed permanently. The contract of permanent employment, the court reasoned, only comes after successful completion of a probationary period.

The court looked at the wording of section 12 (5) and made a finding that these words did not provide an employer a right to extend the probationary period. Section 12(5) provides for a “non-renewable probationary” period. The court in this regard noted as follows:

“This position was also set out in the case of Kazembe v the Adult Literacy Organisation SC 173/1994, where the court stated that once a probation period ends and the employer is dissatisfied with the probationer’s performance, all that the employer needs to do is to inform him that his services are no longer required and that would be the end of the matter.”

The appellant had not been dismissed following the expiry of the probationary period. The court went to reason that he had become a permanent employee because the period of probation had expired.

Verdict

The employee was deemed to have been unfairly dismissed.

Own Comment

The Judgement of this court was well reasoned. The relevant section, 12 (5) is clear cut and not complex interpretation was necessary.

This case indicates one area where the Zimbabwean Labour Law is different from the South African law. In terms of Patsanza and as already noted above the probationary period cannot be extended. On the contrary, n terms of South African law, a probationary period can be extended. It is therefore not an unfair labor practice in South Africa to extend the period of probation. South African labor law thus envisages three possible outcomes at the end of the probationary period. The first possible outcome is that of confirmation of the employee as an employee on a permanent contract, the second possible outcome is that of dismissing the employee and lastly, the contract can be extended. The only valid reason in terms of South African law for the extension of a probationary period is to provide the employee with an opportunity to improve himself or herself.

1,469 Views

Verukai Emilton N/O v TM Supermarket (Pvt) Ltd and Itai Nkomo and Thembinkosi Nyathi LC/MT/37/18

“I  feel compelled  to  respectfully state  that  Act  5 of 2015 was a knee jerk reaction to the aftermath of  the  Zuva judgment and so not much thought was put into the  drafting of  the amendment resulting in poor  draftsmanship which  has  caused  interpretation nightmares  to litigants, Labour  Court judges  and legal practitioners alike.”

Introduction

I find the principles of law discussed in this case interesting. This matter pertained to an application for confirmation of a draft ruling in terms of section 93 of the Labour Act as amended in 2015.  The case explores various claims put forward by two ex-employees. Issues to do with overtime, shares emanating from an ownership scheme and compensation for loss of employment were subject of contention in this case. The reasons put forward by the court in coming up with the final judgment are exciting and will be summarised in this instance.

Background

The brief facts of the matter are that the employees were dismissed in December 2016 after breaching company rules. They then decided to put forward various claims before the Ministry of Labour, Labour Officer. As mentioned above, these claims entailed overtime payment, a claim for shares as well as compensation for loss of employment in terms of the amended provisions of the Labour Act. The Labour Officer to whom the dispute was referred decided in favour of the former employees. It was this draft ruling that the labour officer sought to have confirmed by the Labour Court.

Reasons for the judgment

For ease of reference, I will breakdown the reasons for the judgment under small headings inline with the matters before the court.

Overtime claim

The court did not support the claim for overtime. For starters, it found that the employees did not produce evidence for the claim. It reinforced the rule that the one who claims should provide the proof of the claim. The court further made a finding that the biometric system that the employer used was reliable and that its results had always been used to pay the employees overtime or to give them time off in lieu of overtime. The fact that the employees failed to adduce evidence supporting their overtime, therefore, meant that there was no supportable claim. The court also supported the company’s argument that the overtime ought to have been authorized before being existent. Failure to provide such proof proved disastrous for the employees.

In addition to the above, the court made a finding that the Labour Officer failed to show the basis for the computations he had inserted in the draft ruling. The Labour Officer went on to admit that he had erred in as far as the computations were concerned. It was for these reasons that the court could not support the claim put forward and had no option other than not to confirm this part of the draft ruling.

Shares

The employees were contributing to a share ownership scheme in line with the country’s indigenization policy. The money for this scheme was deducted from the employee’s salaries and remitted to this scheme. The employee’s contention was in connection with a payout that had been made. They argued that because the employer was the one deducting these monies the employer ought to compensate them.

The court did not support the employee’s argument. It noted that the administration of the scheme was in the hands of trustees. These are the persons the employees ought to have confronted if they had an issue with the payout which had been made. It pointed out that the employer would only come into the picture if the deducted amounts had not been remitted to the scheme.

The court failed to support this claim.

Compensation for loss of employment

The employee sought to claim compensation in terms of section 12(4a) which came as a result of the 2015 amendment. The court had a problem with the argument that the employees having been dismissed were entitled to compensation for loss of employment. It realized that that section 12 (4a) applied to instances were an employee lost his employment as a result of termination through giving notice. It argued that the employees in casu had been dismissed. Such a dismissal was in terms of section 12B and as a result, section 12 (4a) could not apply.

The court decisively reasoned as follows:

“A dismissal letter is just that, it can never be equated to notice given where termination is on notice. To suggest so would be tantamount to saying once disciplinary proceedings have ended and the employee is found guilty and the penalty of dismissal is meted out,  the employer then serves the employee with a notice, informing them of the decision but giving them notice that such dismissal will take place on some future date”.

As a result of the above findings, the court concluded that the employees were not entitled to the compensation for loss of employment. It thus also failed to confirm this part of the draft ruling.

Court Decision

The court failed to confirm the whole draft ruling.

Own comment

The courts reasoning is this case is much-admired. The issue of compensation for loss of employment was well reasoned. There is no reason why an employee who has been dismissed should be compensated. Such an employee would have breached company rules for starters. Why then should someone be compensated for going against company rules?

Further, the judgment is also commended for upholding the need for employers to approve and authorize overtime before its worked and paid. This avoids a situation where an employee deliberately prolongs work at the expense of the employer. It also did not support instances were labor officers insert figures in their awards without any legal basis.

1,338 Views

Mike Chiruma v Delta Bevarages LC/MT/74/18

“I do not  intend  to consider whether  the principles applicable in  quantification of  damages in lieu  of  reinstatement can be imported  to  the  compensation  for loss  of employment  provided  for  in  S12 C (2)  of  the  Act,  a point  which  deserves  serious  thought  but  better  left  for appropriate  argument  should it be  raised  in  future  litigation…”

Introduction

This case involved an application for quantification of damages in lieu of reinstatement. I liked the way the court defined back-pay and how it then used the back-pay period as a yardstick for computing all the damages/claims that were applicable. The legal conclusion reached in determining whether an employee is entitled to cash-in-lieu of notice in the process of quantification damages in lieu of reinstatement is also thought-provoking.

I lament that the court decided not to pronounce on an important question as to whether the principles behind the quantification of damages in lieu of reinstatement can be imported to the compensation for loss of employment provided for in S12 C (2) of Act 5 of 2015. This question has been subjected to controversy and commentators do not entirely agree on this matter. The court had an opportunity to bring clarity to this matter and unfortunately, this was left for another day.

Facts

What is important to note is that an employee was dismissed from Delta Beverages’ employ whereupon an appeal was lodged to the Labour Court. Internal appeals had been unsuccessful. At the Labour Court, the appeal was successful following a default judgement. Reinstatement failed and with the consent of all the parties, an order for payment of damages was granted leading to the current application.

Reasons for Judgment

Back-pay

The court agreed with the respondent’s argument that back pay should be calculated from the date of unfair dismissal and up to the day of order of reinstatement. This means that the backpay cannot be calculated beyond the period of reinstatement. The effect of this period is that all other claims/damages will be calculated using this period of back pay. Cash in lieu of leave, production bonus among others, were computed with this period of back pay in mind.

 When determining what the employee was entitled in terms of all the claims the court did not go beyond the period of back pay. It is submitted therefore that the back-pay period is instructive in terms of the quantum of the damages. The period of back-pay can only be altered after taking into consideration the efforts made by the employee in finding alternative employment to mitigate the loss emanating from the wrongful dismissal.

Cash in lieu of leave

The period of cash in lieu of leave will be determined by the period of back pay. The court noted that the entitlement to cash in lieu of leave emanated from the fact that if it was not for the unfair dismissal the employee would have accrued paid vacation leave.

Cash in lieu of notice

The court argued that the employee was not entitled to any cash in lieu of notice because his employment never revived. It found this claim to be contradictory in the sense that the current application was for quantification for damages because reinstatement had failed. That if he had been reinstated then the application for quantification of damages would have been unnecessary. Having not been reinstated the employee, the court argued, was not entitled to cash in lieu of notice.

Production Bonus

It was agreed that but for the unfair termination, the employee would have been entitled to a production bonus. The court argued that the production bonus to be awarded to the employee should fall within the period of back pay, above.

Compensation for loss of employment

The employee had his employment terminated on the 30th of April 2015 and thus the court did not see merit in the argument that the compensation in terms of act 5 of 2015 would apply to the employee.  It would seem like the court was prepared to accept the argument by the respondent that this compensation would amount to two separate awards, the damages in lieu of reinstatement as well as compensation for loss of employment. The court did not consider it necessary to determine whether compensation for loss of employment can be applied to the principles for quantification of damages in lieu of reinstatement.

Mitigation of loss

The court explored the various efforts made by the employee to secure alternative employment in order to mitigate the losses deriving from the wrongful termination. Such efforts are always taken into consideration to determine whether the period of back pay should be shortened or increased. Issues like the employee’s age, health, qualifications are all important in determining the efforts made by the employee in finding alternative employment.

Medical Aid

The employee wanted to claim the money that would have been payable to his medical aid company. The court did not agree that the employee was entitled to medical aid payments. The courted was quick to mention that the employee would have been entitled to a refund of medical expenses that he had incurred during the period of unfair termination.

Punitive Damages

The court argued that these can be claimed separately and despite the award of other claims. These would not amount to “double damages” a situation where an employee is compensated twice for the same act of unfair termination. From the court’s remarks, these damages are awarded when the employer deliberately and with no reasonable cause made reinstatement impossible.

Non-monetary Benefits

The notable principle here is that an employee is entitled to all the benefits he would have been entitled to, but for the unfair termination.  The court found that the employee was entitled to soap and beverages that he would be entitled to in the course of his employment. The monetary value of such benefits was calculated mindful of the period of back-pay as mentioned above.

Own comment

As mentioned above, I believe an opportunity was lost when the court decided not to determine whether the principles applicable in the quantification of damages in lieu of reinstatement can be imported to the compensation for loss of employment provided for in  S12 C (2) of the Act. When Act 5 of 2015 was promulgated and compensation for loss of employment there was a lot of debate on this subject with some arguing that damages in lieu of reinstatement had been replaced by this compensation. The court should have therefore provided some direction as to how the two are related if they are.

2,049 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:

  1. The employee, Muparaguda, was employed on the 19th of January 2009.
  2. On 12 October 2009, he was suspended without pay following allegations of breach of the National Employment Code of Conduct, SI 15 of 2006.
  3. On 3 November the hearing official referred the matter to the General Secretary noting that he was unable to finalise the matter.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. The employee was also not satisfied with the verdict given by the Labour Court thus founding an appeal to the Supreme Court.
  9. 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.

1,301 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.

1,602 Views
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