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This summary is based on our book, “Contemporary Employment Law in Zimbabwe” which you can only access as a hard copy. A preview of the book is available for download on this website, using this LINK.
The Act now refers to two types of retrenchment packages,[1] that is a minimum retrenchment package as well as an enhanced retrenchment package,[2] which is negotiated and agreed upon between an employer and an employee. The definition of a minimum retrenchment package is missing from the Act 11 of 2023.
When the Labour Amendment Bill of 2021 was produced it marked that the minimum retrenchment package was pegged at 1 month’s salary for two years served.[3] This was similar to the provisions in Act 5 of 2015 which also provided for 1 month’s salary for every 2 years served. Strangely, the provision that provided for the definition of a minimum retrenchment package is no longer there in Act 11 of 2023. This creates a gap which results in interpretation problems for employers and employees.
A perusal of the whole section 12C shows a legislature that was making a distinction between a minimum retrenchment package and an agreed enhanced package. Section 12C (2) shows that the minimum retrenchment is payable in the absence of an agreed enhanced retrenchment package. Without ascribing a meaning to the minimum retrenchment package some of the provisions in section 12C become difficult to comprehend. For example, if an employer alleges that he or she cannot pay any part of the minimum retrenchment package it becomes mandatory for the same employer to still notify the retrenchment board and indicate that “the portion of the minimum retrenchment package that he or she can pay” is not “less than twenty-five per centum of the total package.”[4] The reference in this section to 25% of the total minimum retrenchment packages means that the legislature envisaged that the “minimum retrenchment package” would be known beforehand. In the absence of the definition of a minimum retrenchment package in the Act, there is no objective way of calculating the 25% that should be strictly paid by an employer that cannot afford the minimum retrenchment package. This is a legal problem.
The legal challenges caused by the absence of the definition of a minimum retrenchment package in the Act call for two options. The first option is for the legislature to amend the Act once more and provide a definition of a minimum retrenchment package. The second option is for the Bill to be taken into consideration in understanding the definition of the minimum retrenchment package. This will be in line with the Interpretation Act (Chapter 1:01) which provides for the use of extrinsic material in the interpretation of enactments.[5] If such an approach is taken, one would realise that extrinsic information such as “any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before or furnished to members of Parliament by a Minister before the time when the provision was enacted;” can be used to interpret the legislative provision.[6]
If the second approach is taken and if this is indeed seen to be practical, the inescapable conclusion one might reach is that a minimum retrenchment package of 1 month’s salary for every year served was contemplated by the legislature when section 12 C of the Act was promulgated under Act 11 of 2023. The definition of the minimum retrenchment package was there in Bill. It was not different from what it was under Act 5 of 2015. This is the definition that the legislature must have had in mind when it enacted the whole of section 12C of the Act. The temptation to be escaped in the circumstances is where an employer plucks figures from the air and then ascribes them to the definition of a minimum retrenchment package. The legislature must not have contemplated such a haphazard approach.
[1] Section 12C (1) of the Act as amended.
[2] Section 12C (1) of the Act as amended.
[3] The Labour Amendment Bill provided: “minimum retrenchment package” means one months’ wages for every two years served (and the proportionate amount for every part of a year served). Unless better terms are negotiated and agreed between the employer and the employee or employees concerned or their representatives, a minimum retrenchment package shall be paid by the employer as compensation for retrenchment not later than the date on which the retrenchment takes effect”.
[4] Section 12C(9) of the Act provides: “Where an employer alleges lack of capacity to pay any part of the minimum retrenchment package— (a) the employer shall within fourteen days of any employee being retrenched comply with subsection (5)(b) as if reference to minimum retrenchment package in that provision is a reference to the portion of the minimum retrenchment package that he or she is able to pay not being less than twenty-five per centum of the total package and subsections (6) and (7) shall apply to that portion accordingly”
[5] Section 15B of the Interpretation Act (Chapter 1:01).
[6] Section 15B(e) of the Interpretation Act (Chapter 1:01).
This summary is based on our book, “Contemporary Employment Law in Zimbabwe” which you can only access as a hard copy. A preview of the book is available for download on this website, using this LINK.
Section 12(4a) (b) under Act 11 of 2023
Section 12(4a) (b) of the Act provides that an employer can terminate a contract of employment in the following circumstances:
“For the breach of an express or implied term of contract, upon such breach being verified after due inquiry under an applicable employment code or in any other manner agreed in advance by the employer and employee concerned.” (Own Emphasis).
This section is subject to controversy as some practitioners are of the view that it gives the employer the right to terminate a contract on notice. The assumption by these practitioners is that the words “in any other manner agreed in advance by the employer and employee concerned” applies to the parties generally agreeing to a method of termination not provided under the whole section 12(4a). The argument goes on to suggest that the provision allows an employer and an employee to choose to terminate a contract on notice.
In our respectful view, section 12(4a) (b) must be construed as a whole. We submit that the employer and employee may agree to a different method of inquiring into the alleged breach other than a method in the code of conduct. The word “inquiry” means “a request for information or a systematic investigation often of a matter of public interest or examination into facts or principles.”[1] The wording of the provision thus suggests that upon an employee being accused of breaching workplace rules, there must be an inquiry to verify this breach. There are two ways of verifying the breach. An investigation can be done as per the specifics of a code of conduct. The parties may also agree in advance on how they will conduct this investigation or inquiry.
We submit that it is only after the investigation has been carried out and a subsequent hearing has been done that an employee can be deemed to have been fairly dismissed in terms of section 12(4a) (b) of the Labour Act. The same section cannot be used to propagate the view that the termination on notice was introduced in the Labour Act via the back door. Such an interpretation will fly in the face of section 12(4a) which has expressly excluded the termination of a contract on notice.
Besides the above, we also submit that jurists must interpret legislation to protect the legislature’s intention. There is no doubt that after the infamous Zuva Petroleum judgment, and the enactment of Act 5 of 2015, the intention has been to curtail the termination of a permanent contract on notice. By expressly proving for the strict ways a contract can be terminated the legislature intended to make it clear that termination of a permanent contract on notice must be removed from our law. If one is to peruse the parliamentary debates on this issue, the clear message that was sent out was that the common law rule of terminating a contract on notice must not be available in the Labour Act. This was the intention of the legislature, and this is how section 12(4a) of the Labour Act must be interpreted.
The interpretation that perpetuates the termination of permanent contracts on notice does not save and protect the legislative intention to preclude the termination on notice. The section must not be used to revive the ghost of 2015 which saw thousands of employees losing their jobs after the Zuva Petroleum judgement.
[1] https://www.merriam-webster.com/dictionary/inquiry <Accessed on 14 July 2023>.
As social media continues to play an increasingly significant role in our daily lives, it is natural to wonder about the potential consequences of our online activity. One question that has arisen is whether an individual can be dismissed from their job for what they post on social media. This is a particularly pertinent issue...
“The quantification done by the arbitrator and upheld by the Labour Court in this matter is legally unsustainable. As the respondent did not prove that he was entitled to more than what the appellant had paid him, the Labour Court ought to have granted absolution from the instance.” Introduction The quantification of damages in lieu...
Cephas Mavhondo & Taurai Mrewa
Executive Summary
Various amendments to the Labour Act (Chapter 28:01) hereinafter called “the Act”, are being crafted and the relevant Bill was approved by the Cabinet.[1] We took the opportunity to go through the Bill and we saw interesting aspects of this proposed law. In this commentary, we will concentrate on aspects that we consider more controversial such as the changes that are going to affect fixed-term contracts, collective bargaining, powers of designated agents and labour officers, and retrenchment. These are aspects that affect the employer and the employee on a day-to-day basis. Besides outlining what the Bill is providing, in certain circumstances, we took the opportunity to respectfully highlight the strengths that are going to come with the Bill. We have also respectfully outlined what we consider to be the shortcomings in the Bill. We trust you will enjoy reading this commentary.
Click any of the topics below to read the full articles:
Fixed Term Contracts
Collective Labour Law
Collective Job Action
Codes of Conduct
Designated Agents of Employment Councils
Powers of Labour Officers
Retrenchment
Sexual Harassment and Violence
Labour Brokerage Arrangements
Other Important Provisions
Two Authors collaborated in this work and their profiles are as follows:
Cephas Mavhondo
Cephas is a registered Legal Practitioner, Conveyancer and Notary Public. As a practising lawyer, Cephas has developed a special interest in Labour Law, Civil Litigation and Estate Administration Law. He runs a personal online blog: labourwatchzimbabwe.blogspot.com/
Taurai Mrewa
Taurai Mrewa is an Admitted Attorney of the High Court of Zimbabwe. He is also an experienced Human Resources Professional with 11 years of experience. In 2020, he published an eBook entitled, The Basics of Labour Law in Zimbabwe which is available for FREE on his online blog: taumrewa.co.zw/
This commentary was written in the authors’ personal capacities and does not reflect the views of the organisation or persons that they represent.
Further, the contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.
FULL ARTICLE CAN BE DOWNLOADED ON THIS LINK
1. Introduction One recurring situation in labour relations is where an employee resigns and decides to leave employment without honouring or giving the employer the requisite notice. Without the consent of the employee in question, some employers simply proceed to deduct the notice from such an employee’s terminal benefits. Indeed, some contracts of employment and...
“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...
“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.
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.
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 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 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]
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.
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.
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.
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.
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 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]
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
