IMPACT OF STATUTORY INSTRUMENT 33 OF 2019 ON DAMAGES IN LIEU OF REINSTATEMENT

QUERY:

“I have a labour matter in which I was constructively dismissed in 2016 and the labour officer made a ruling in my favour and in March 2019 I made a claim for quantification of damages and a ruling was made on 1 August 2019. I had made a claim in USD, but the labour officer went on to make a ruling with only a “$” sign. I had opposed its confirmation and prayed for an alteration that the award should be USD not ZWL and that the damages would then be converted from USD to ZIM$ at prevailing interbank rates when payment is made but the court was of the reasoning that in the absence of such specification of USD the amount can only be ZWL and also SI33/2019 (4)(d) would apply in this instance regardless of the fact that the assessment of the damages was made after the promulgation of the statute. As for considerations to equity, the court overlooked its implication. My question is whether I have a basis for appealing the court’s decision. because the assessment of the damages was made after SI33/19   with reference to my USD salaries as such the claim was not within the ambit of the statute and the matter of considerations to equity.”

RESPONSE:

Introduction

There are two major hurdles in this instance. The labour Officer made a mistake in not mentioning that the values were not in USD but this does not change the current legal position. The said Statutory Instrument and subsequent amendments to the Finance Act now provide that all debts and monies owed prior to the SI should be converted to ZWL at 1:1.

SI 33 OF 2019 Provisions

The SI clearly provides under section 4(1)(d) that:

“…that, for accounting and other purposes, all assets and liabilities that were, immediately before the effective date, valued and expressed in United States dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act) shall on and after the effective date be deemed to be values in RTGS dollars at a rate of one-to-one to the United States dollar;”

Finance Act Amendment

The amendments to the finance act now clearly indicate that court judgements and obligations created prior to the coming in of the act should also be converted at the same rate. In this regard, The Finance (No. 2) Act, 2019 now provides under section 22(4)(a) that:

“.. it is declared for the avoidance of doubt that financial or contractual obligations concluded or incurred before the first effective date, that were valued and expressed in United States dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act) shall on the first effective date be deemed to be values in RTGS dollars at a rate of one-to-one to the United States dollar;”

Zambezi Gas Zimbabwe (Pvt) Ltd v N.R. Barber (Pvt) Ltd & Another

The second hurdle is the recent Supreme Court judgement that affirmed the position that all debts and judgements before the SI should be converted at the rate of 1:1. In terms of the judgement in Zambezi Gas Zimbabwe (Pvt) Ltd v N.R. Barber (Pvt) Ltd & Another SC3 20, the following is the contemporary position:

“Once a conversion of the value of an asset or liability denominated in United States dollars is made to the value of RTGS dollars, the converted value remains the same, as the two different currency denominations both carry value. No exchange rate can be applied as the judgment debt remains a judgment debt with a value after it is converted to the local currency. The RTGS dollar has the value given under the one-to-one rate and it remains on that value even after the effective date.”

Conclusion

As a result of these authorities, it is doubtful, in my view, if any court would award damages in USD.

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