American Friends Service Committee v Irene Chauke SC 1/2012

“There can be no doubt that the Labour Court fell into error in coming to this conclusion as it is settled law that damages in these circumstances must be properly proved by the party seeking the same”.

Introduction

In the Contemporary Employment Law in Zimbabwe, First Edition we indicated that the widely accepted test for determining if an employment relationship exists between the parties is the dominant impression test. This test looks at all the facts of the interaction between the parties to determine if indeed there was an employment relationship. Aspects such as the control of the employee by the employer, supervision, and control must be fully considered. The test also looks at whether the employee was part of an organization. In such a test, therefore, there is no single decisive factor that the court considers. The totality of the evidence presented by the parties is fully considered.

American Friends Service Committee v Irene Chauke SC 1/2012 deals with two important aspects of Zimbabwe’s employment law. First, it outlines the law that applies in a determination as to whether an employment relationship exists between the parties. Secondly, it also assesses and makes a decisive conclusion on the importance of evidence when it comes to the quantification of damages in lieu of reinstatement. These issues are discussed here.

  1. Facts

The issue presented before the Supreme Court centred on whether or not a valid employer-employee relationship existed between the parties. The appellant had initially hired the respondent on fixed-term contracts up until September 2007. However, it was undisputed that the respondent continued to provide services to the appellant beyond this time frame. Her employment was extended on multiple occasions until its termination in June 2009. At the point of termination, she was earning a monthly salary of US$1,500 and was required to work five days per week and eight hours per day. Additionally, her role as office coordinator and programmer required her to report her activities to the regional office located in South Africa. The case at hand thus required a thorough examination of the employment relationship between the parties involved and to ascertain whether an employer-employee relationship existed between the parties.

  1. The court’s findings and the law

The court found that on the facts, the respondent was an employee of the appellant. The fact that the respondent was earning a monthly salary of US$1,500 and was required to work five days per week and eight hours per day all pointed to the existence of an employment relationship.

In addition to the above, the court also found that the arbitrator based his decision regarding the quantification of damages solely on an unsupported statement from the respondent. The Labour Court had accepted this claim without opposition from the appellant. The Supreme Court emphasized that damages in such cases must be properly substantiated by the party making the damages claim.

Conclusion of the dispute

The court’s view was that there was a need for the quantum of damages to be properly proved. The matter was remitted to the Labour Court for determination of the damages after evidence had been adduced.

Own comment

This case highlights the dominant impression test of determining whether an employment relationship exists between the parties. The fact that the Respondent was employed on a fixed-term basis. That he was paid a salary of USD 1500 and reported to superiors in South Africa all pointed to the existence of an employment relationship contemplated by the Labour Act. Every court faced with a dispute regarding the existence of an employment relationship is compelled to look at the totality of the evidence presented by the parties. This resonates well with what the Supreme Court indicated in Masango & Others v Kenneth & Another SC 41–2015 where the court ruled that:

 “…. what the parties call each other in such a contractual relationship, or what they perceive their relationship to be is not decisive and may actually be irrelevant. The court looks at the totality of the evidence and all the circumstances to determine the true nature of the relationship.”

Equally so, the acceptance of damages by a court in the absence of evidence is not ideal. Several court judgements have emphasized the importance of leading evidence in order to support quantification proceedings. In Heywood Investments (Private) Limited T/A GDC Hauliers v Pharaoh Zakeyo SC32/2013 the Supreme Court ruled that:

“What the court is not empowered to do is to award damages in the absence of any evidence in support of such award”

We submit therefore that American Friends Service Committee v Irene Chauke SC 1/2012 is an important case for those who wish to contest the presence or the absence of an employment relationship. It is also a useful case for those seeking to thwart damages that were awarded in the absence of evidence.

187 Views

Contemporary Employment Law in Zimbabwe

We are happy to share with you that we have a new book on the market.

You may need to know that:

  1. 300 cases are used to explain several legal points in the book.
  2. It has a commentary on the Labour Amendment Act of 2023.
  3. It analyses the Labour Court Rules as amended in 2023.
  4. It outlines 30 cornerstones of workplace law.
  5. It analyses more than 50 employment law cases. It is only available in hard copy & has 370 pages.

A preview can be downloaded here.

844 Views

Minimum Retrenchment Package Definition that’s missing from Act 11 of 2023

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).

986 Views

Act 11 of 2023 Does not Authorise the Termination of Permanent Contracts on Notice.

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>.

635 Views

Can I be dismissed based on my social media posts.

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 in countries such as South Africa and Zimbabwe, where social media use is widespread but employment laws may not be as clear-cut as in other regions.

The short answer is that it is possible to be dismissed for social media activity, but the circumstances will vary depending on the specific situation. In general, employers have the right to take action if an employee’s online activity has a negative impact on the company or violates company policies. However, there are also legal protections in place to prevent employers from unfairly punishing employees for their personal beliefs or activities outside of work.

In South Africa, the Labour Relations Act provides some guidance on this issue. Section 8 of the Act states that employees have the right to freedom of expression, which includes the right to express their opinions on social media. However, this right is not absolute and can be limited if it infringes on the rights of others or causes harm to the employer’s business. For example, if an employee posts confidential company information or makes derogatory comments about colleagues, this could be grounds for disciplinary action.

Similarly, in Zimbabwe, the Labour Act provides some protection for employees’ rights to freedom of expression. However, the Act also states that employees must not engage in conduct that is “prejudicial to the interests of the employer.” This could include posting negative comments about the company, its products or services, or its employees on social media.

It is worth noting that in both South Africa and Zimbabwe, there have been cases where employees have been dismissed for their social media activity. For example, in South Africa, a bank employee was fired after posting racist comments on Facebook about her colleagues. In Zimbabwe, a teacher was dismissed after posting comments on Facebook that were critical of the government.

However, there have also been cases where employees have successfully challenged their dismissals on the grounds of unfair treatment. For example, in South Africa, a marketing manager was reinstated after being fired for posting a tweet critical of her employer. The Labour Court ruled that the dismissal was unfair because the employer had not followed proper disciplinary procedures.

So, what can employees do to protect themselves from being dismissed for their social media activity? The most important thing is to be aware of company policies and to ensure that any online activity is in line with these policies. Employees should also be mindful of the potential consequences of their online activity and avoid posting anything that could be seen as offensive or harmful to the company or its employees.

Employers, on the other hand, should have clear policies in place regarding social media use and should ensure that employees are aware of these policies. Employers should also follow proper disciplinary procedures if an employee’s online activity is deemed to be in violation of company policies.

In conclusion, while it is possible to be dismissed for social media activity in South Africa and Zimbabwe, the circumstances will depend on the specific situation. Employees should be aware of company policies and the potential consequences of their online activity, while employers should have clear policies in place and follow proper disciplinary procedures. Ultimately, the key is to strike a balance between employees’ rights to freedom of expression and employers’ rights to protect their business interests.

291 Views

Monterey Estate (Private) Limited v Kenny Broxham SC 49 – 16

“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 of reinstatement is a frequent source of labour law litigation. There is always the temptation to “pluck the figures from the air” an approach that the courts have frequently discouraged. Quantification of damages in lieu of reinstatement is not an easy task. Those who preside over such disputes must as much as possible fully utilise the evidence presented by the parties. Failure to consider such evidence results in a problematic outcome.

The Facts

This case was an appeal against the quantum of damages in lieu of reinstatement that was awarded to the Respondent, Kenny Broxham by an arbitrator. The Labour Court had agreed with the quantum.  Noteworthy, on 30 November 2009, the appellant company had given a month’s notice of termination of the employee’s contract, effective from 1 December 2009 to 31 December 2009. The respondent employee accepted alternative employment with effect from May 2010.

The Law

First, it was the Supreme Courts’ observation that the respondent was out of employment for four months. The damages awarded by the arbitrator and upheld by the Labour Court were for 9 months. There was no evidence supporting the 9 months. There was therefore no legal basis for the award because the amount granted in the arbitral award had no basis or explanation.

The Supreme Court utilised the law in Zupco v Daison wherein it was stated that:

“… in its judgment the Tribunal did not say why it chose the period of forty-eight months as opposed to any other period. As stated in Nyaguse v Mkwasine Estates (Pvt) Ltd 2000 (1) ZLR 571 (S) at 575D, ‘if the tribunal is forced to make an estimate, it must use the information to hand, and not simply pluck a figure from nowhere. In the circumstances, I am satisfied that the Tribunal’s decision can be categorised as wholly unreasonable. …”

Duly Holdings Limited v Clever Spanera 2005 (1) ZLR 407 (S); SC 140/04 was also utilised wherein the court remarked:

“He (the employee) will be compensated only for the period between his wrongful dismissal and the date when he could reasonably have been expected to find alternative employment.”

In essence, the Supreme Courts’ argument is straightforward, any process of quantifying damages must be supported by evidence. Failure to consider the evidence by the party’s results in an unreasonable award which is liable to be set aside by an appellate court. Even where a court is compelled to make an estimate, this estimate must be supported by the information presented by the parties.

Conclusion

The court allowed the appeal.

Own Comment

Repeatedly the Supreme Court has urged the lower courts to substantiate the quantum of damages with the evidence presented by the parties.[1] This is a universal rule when it comes to the quantification of damages in lieu of reinstatement. Plucking figures from the air results in an arbitrary decision which is not supported by the authorities on this subject.


[1]              See also Redstar Wholesalers v Edmore Mabika SC 52/05 wherein the court said: “The Labour Court’s approach was wrong and its consequent ruling grossly unreasonable. The Court is not entitled to pluck a figure out of a hat because it is of the view that this figure „meets the justice of the case‟. Instead, the court is required to hear evidence as to how long it would reasonably take a person in the position of the dismissed employee to find alternative employment. The fact that the parties have led insufficient evidence to enable the court to arrive at an informed conclusion does not absolve the court from its duty to utilise its powers in terms of s 89 (2) of the Labour Act by calling evidence in order to resolve the issue.”

152 Views

COMMENTARY ON CERTAIN ASPECTS PROVIDED UNDER THE LABOUR AMENDMENT BILL, 2021


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

About the Authors

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/

Important Notes

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

1,245 Views

Deduction from Wages/Salaries Upon Failure by an Employee to Serve a Notice Period

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 Collective Bargaining Agreements empower the employer to make such deductions if the employee decides to leave without serving the employer the obligatory notice. In this section, we explore, the legality of such deductions. We also give an overview of how this area of law is handled in other countries. Lastly, we look at the remedies available to an employer faced with such a predicament.

2.     Notice of termination

Section 12 (4) of the Labour Act provides for the notice of termination of the contract of employment to be given by either party. The notice depends on the nature and length of the contract in question. For a contract without a limit of time or a contract for two years or more three months’ notice is prescribed, two months in the case of a contract for one year or more but less than two years and so on. Section 12 (4a) precludes an employer from terminating a contract of employment on notice unless certain conditions are met for instance in terms of a code of conduct, by mutual agreement, if it is a fixed-term contract or if an employer is engaging in a retrenchment exercise. Whilst the employer’s right to terminate on notice has been curtailed, the employee retains the full right to end an employment relationship on notice. As already noted above, circumstances may compel the employee to leave the place of work without serving the requisite notice. This is where some employers have resorted to deducting the notice period from either the accrued leave days, outstanding wages, pension etc. The major instruments used by the employers in such circumstances can be the CBA or the contract of employment. We submit in this article that this is misguided and a serious misunderstanding of the law.

3.     Permissible deductions

The Labour Act is clear-cut in terms of deductions that can be taken from an employee’s salary or wages in the course of employment and on separation. In summary, such deductions include where an employee is absent from work on workdays, statutory deductions, advance payments made to the employee, and payments made in error.[1] The relevant section is crafted in peremptory terms leaving no room for any other form of permissible deductions. The section is also clear that these permissible deductions can be deducted in full on separation. As an example, if a payment was made in error, an employer can deduct the full amount if the employee were to leave employment. This would not apply to a deduction in lieu of the notice that the employee was supposed to serve on resignation. This would be so even when the contract of employment and the CBA provides for such deductions.

Section 17(3)(b) allows the Minister of Labour to make regulations providing for the deductions which may be made from the wages of employees. No such regulations have been made empowering an employer to deduct cash in lieu of the notice of termination of the contract.

4.     Collective bargaining agreements and contracts

Certain CBAs empower employers to deduct wages upon a failure by an employee to serve the notice. One such CBA is the CBA for the Motor Industry[2] which provides:

“If an employee leaves his employment without giving notice or having given notice, and fails to work during that period of notice, the employer may deduct, from any wages or leave due to that employee, an amount equal to the wages he would have earned if he had worked the period of notice”.[3]

We submit that such a provision violates section 74 (5) of the Labour Act which precludes a CBA from having a provision that is contrary to what is provided in the Labour Act. The section unambiguously reads:

“A collective bargaining agreement shall not contain any provision which is inconsistent with this Act or any other enactment, and any collective bargaining agreement which contains any such provision shall, to the extent of such inconsistency, be construed with such modifications, qualifications, adaptations and exceptions as may be necessary to bring it into conformity with this Act or such other enactment”.

Whilst a CBA can contain a provision which is of mutual interest to the parties including deductions that can be made to employees’ wages and salaries[4] such matters should always comply with the provisions under section 74(5) of the Labour Act when read together with Section 12A (6) of the same Act. From the provisions discussed thus far, one aspect of the issue in question stands out, deducting wages in lieu of the notice that was supposed to have been served by an employee is not permitted by the labour laws of this country. One might ask, what is the law in other countries? This is reviewed below.

5.     The law in other countries

In South Africa, the labour laws do not empower an employer to deduct cash in lieu of the notice upon an employee’s failure to serve the notice period. The Basic Conditions of Employment Act (BCEA) in South Africa has provisions that are close to the Labour Act in Zimbabwe. What is slightly different is that the BCEA can allow an employee to consent to certain deductions including a deduction in lieu of notice. This logically means that a South African employer will still have to pay the employee their full wages on termination even though the employee failed to serve the notice of termination of the employment contract.

Further, as a general rule in India, wages, and salary deductions for not serving the notice period are not permissible. The laws in India provide for a list of deductions that can be made to an employee’s wages and notably, deductions for failure to serve the requisite notice are not allowed.

The manner in which this issue is handled in different countries is equivalent to what happens in Zimbabwe. This is not surprising. Labour laws are meant for the protection of employees against a capitalist system. It is accepted that employers as the owners of the means of production are more powerful when compared to employees who only render a service. To balance this unequal distribution of power, labour laws are enacted.

Does this mean a Zimbabwean employer is without recourse if an employee leaves his or her employment without giving the required notice? NO. There is no doubt that the action of leaving employment without serving the notice can result in irreparable harm on the part of the employer. The importance of a smooth handover process in the management of a business cannot be underestimated. What follows is the recourse that can be taken by the employer.

6.     Recourse on the part of the employer

Failure by an employee to serve the required notice constitutes a breach of contract. A breach of contract is a material non-compliance with the terms of a legally binding contract.[5]

A party who has suffered a breach of contract has the option of enforcing the contract and order specific performance and to also sue for damages.  The damages can be based on actual loss or future loss. This procedure is not based on labour law but civil law and would entail the issuance of summons of an appropriate court. There is no doubt that this is a cumbersome process as compared to recovering the equivalent of the notice from the employee’s wages but until our labour laws are amended, this is the law that we have to abide by.

7.     Conclusion

In this article, we highlighted that our labour laws do not allow an employer to deduct wages upon a failure by an employee to serve the requisite notice. Contracts and CBAs that empower employers to deduct wages may fail the lawfulness test as they are contrary to the provisions in the Act. We also demonstrated how our laws are structured in a manner not so different from other countries. This is so as a function of the need for the labour laws to protect the employees mindful of the unequal relationship that exists between the owners of the means of production, the employers, and the providers of service, the employees. The only viable option on the part of the employer is to issue out summons and recover damages from the employee but this is a long and costly process and as a result, very few employers are willing to go that route. Until our laws are changed, deduction of wages upon a failure by an employee’s failure to serve the requisite notice remain unlawful.


[1]           Section 12A (6) of the Labour Act (Chapter 28.01).

[2]           Statutory Instrument 84 of 1993.

[3]           Section 13(3) of Statutory Instrument 84 of 1993.

[4]           Section 74(3)(c) of the Labour Act.

[5]           Leigh Ellis (Updated 8 October 2019), https://hallellis.co.uk/breach-contract-meaning/.

528 Views

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

600 Views
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