TOBACCO PROCESSING ZIMBABWE v MUTASA AND OTHER (LC/H/242/2019)

“… then the test as laid down in Chibanda v Hewlett 1991 (2) ZLR 211
(HC) was met. In that case, the court held as follows;

“The learned author, Cooper, defines tacit relocation at page 319 opcit, as follows;  ‘A tacit relocation is an implied agreement to re-let and is concluded by the lessor permitting the lessee to remain in occupation after the termination of the lease and accepting rent from the lessee for the use and enjoyment of the property.””

Keywords

TPZ: Tobacco Processing Zimbabwe.

Introduction

TPZ v Mutasa and Others is a case which discusses important legal concepts that stem from the process of continuously renewing fixed-term contracts. It discusses the legal concept of tacit relocation of a fixed-term contract of employment. In my view, this is a landmark ruling. Its clearly explains circumstances were tacit relocation obtains. In an era where most companies have most of their employees on fixed-term contracts, one has to scrutinise this judgement and fully appreciate the consequences of tacit relocation.

Facts

Briefly, the facts of this matter were as follows:

  • The employees were on fixed-term contracts which expired, and they continued to work for the same employer.
  • They were given another set of a fixed-term contract

 with terms and conditions which were not different from the expired contracts.

  • They did not contest these contracts on the argument that their status had not changed.
  • The new contracts ran from 1 May 2013 to 30 April 2015.
  • The contracts expired again, and the employees continued to work until the employer availed new contracts in June 2015.
  • These new contracts provided for a duration of 1 year.
  • The employees refused to sign the contracts and the employer proceeded to terminate the same.

Reasons for the judgement

The legal question that arose was with regards to the status of the employees. Was there a tacit relocation of the old contracts?

The court noted that the accepted legal position is that if an employer allows an employee to work beyond a period of the fixed-term contract, the contract will be deemed to have been renewed on the same terms as the old contract. It rejected the argument by the employer that there was a negotiation of a new contract which had led to the employees working beyond their fixed-term positions.

The court argued that the current legal position is that tacit relocation will be broken if one of the parties indicates an intention not to be bound by the expired fixed-term contract. This will be the case if an employer communicates with the employees that the terms of the old contract are no longer going to apply once the contract expires.

In the current case, the intention not to be bound by the old fixed-term contract was not communicated to the employees. They simply continued to work beyond the period fixed by their old contracts.

Determination

The appeal by the was dismissed on the finding that there was tacit relocation of the contracts.

Own comment

The court’s decision confirms what this jurisdiction has established over the years that when a fixed-term contract is not renewed, and an employee continues to come to work the terms of the old contract will continue to apply. This is of course, after taking into consideration the intention of the parties. The fact that parties were still negotiating the terms of the new contract does not stop tacit relocation of the contractual terms from happening.

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