African Banking Corporation v Misheck Ugaro & Anor

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/207/2020
HARARE, 20 MARCH 2020
CASE NO. LC/H/1083/15
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/207/2020

HARARE, 20 MARCH 2020			   CASE NO. LC/H/1083/15

AND 11 SEPTEMBER 2020

AFRICAN BANKING CORPORATION 				Appellant

MISHECK UGARO							1st Respondent

ABC PENSION FUND						2nd Respondent

Before Honourable G. Musariri, Judge

For Appellant		-	Mr G. Sithole

For 1st Respondent	-	Mr M Gwisai

For 2nd Respondent	-	No Appearance

MUSARIRI, J:

By order date stamped 22nd February 2018 the Supreme Court of Zimbabwe remitted the matter to this Court for it:

“(a) To determine the actual period during which the appellant was employed by the respondent and in respect of which the respondent was contractually obliged to remit pension contributions to the relevant Pension Fund.

(b) To compute the exact amount of the contributions payable in respect of both employer’s and employee’s contributions, less the amounts already paid by the

respondents for the period of actual employment determined in terms of paragraph (a) above.”

Then on the 28th November 2018 this Court issued a consent order in terms of which 2nd Respondent was joined to the proceedings.  I shall henceforth refer to the parties thus; Appellant (employer) 1st Respondent (employee) and 2nd Respondent (Fund).

It is common cause that the employee worked for the employer with effect from the 1st August 2002.  The employee stated that from April 2004 he was seconded to the employer’s sister subsidiaries in the Southern Africa region until his resignation in March 2015.  Per contra the employer replied that the employment was superceded by a fresh contract between the employee and African Banking Corporation of Mozambique Sari on 1st March 2004.  Thereafter the employee worked for other   ABC companies in Southern Africa which are “different and separate “entities from the employer.

The logical starting point is the Mozambique contract.  A copy is filed of record.  The agreement was signed by and on behalf of the employee and African Banking Corporation Mozambique Sari.  The employee relied mainly on clause 3 of the contract.  The clause declared that

“3. Specific Assignment

The position to be held by the employee in terms of this agreement is Senior Account Relationship Manager of the Employer.  The Employee will be based in Maputo, Mozambique.  The Employee or ABCH, which company currently has subsidiaries (including the Employer) in Botswana, Malawi, Zambia, Tanzania, Zimbabwe and Mozambique, shall have the right to relocate the Employee to any other country or place of operation of ABCH and, in the event that the Employee

refuses to so relocate, any notice of termination of this agreement given by the Employee shall be in accordance with Section 16 hereof.”

I consider that the clause actually collapses the employee’s case.  It shows that there is a holding company referred to as ABCH.  That holding company has branches all over Southern Africa including Zimbabwe.  The Mozambique subsidiary operates according to the laws of Mozambique.  That was spelt out in clause 18 which reads

“This agreement shall be governed by and construed in accordance with the laws of the Republic Of Mozambique.”

Yet the employer in casu is a Zimbabwean company registered in and operated according to the laws of Zimbabwe.  This buttressed the employer’s submission that the employment contract was superceded by the Mozambique contract.  The employee himself admitted that the Zimbabwe company is part of ABCH of Johannesburg Southern Africa (Ref paragraph 2 of his Claimant’s Statement filed with Arbitrator B.Matongera.)  The subsidiaries apparently operated according to the laws of the countries they operated in.  The contract with the subsidiary could be terminated by the employee without reference to the Zimbabwe company.  I therefore find that the actual period of employment in casu runs from the 1st August 2002 to be 29th February 2004.

My finding is fortified by 2nd Respondent’s Pension Fund Rules.  A copy is filed of record.  The definitions in Rule 2 are instructive.  The employer is defined as “African Banking Corporation of Zimbabwe Limited.”  The eligible employee is defined as “all employees, including a Working Director, on full time permanent staff of the employer who is under the normal retirement age”.  Rule 4.2 (5) then provides that a member who has left service “for any reason” shall cease to be a member of the Fund.  The cumulative effect of the quoted Rules is that an employee

who leaves service of the Zimbabwe employer loses membership.  Thus he has no pension or benefits accruing from the Fund after his departure.  Therefore the employee’s benefits in casu go up to his new contract with the Mozambique employer in March 2004.

Paragraph 3 (b) of the Supreme Court’s order entails calculation of amounts, if any, due to the employee.  The employees’ attorneys filed an Annexure A setting out the calculations.   I noted that the calculations start from April 2004.  They go up to September 2009.  The period covered is the period which falls outside the employee’s service with the Zimbabwe Company.  That is the time he was engaged in other countries in Southern Africa.  As l have already found and agreed with the employer the employment outside Zimbabwe terminated the employee’s further accrual of pension benefits under the Fund.  Nothing was pleaded or proved as outstanding during the employee’s service in Zimbabwe.  Therefore on the basis of the very calculations tendered by the employee l conclude that there is nothing owed to him by the employer or the Fund (2nd Respondent).

Further and in any event the employee has not refuted the submissions by the employer in its Heads of Argument as follows,

“7. In light of the foregoing and in conclusion it is submitted thus:

7.1 Respondent was employed by the Appellant from 1 August 2002 to February 2004.

7.2 The figure of contributions payable by the employer is US$2, 646 – 23, which has already been paid thereby,”

In the circumstances the employer’s case has merit.  The arbitration award which triggered these proceedings needs be set aside.

Wherefore it is ordered that:

The appeal be and is hereby allowed;

The award issued by Arbitrator B Matongera dated  the 	          12th November 2015 is set aside; and

Each party shall bear its own costs.

G MUSARIRI

J-U-D-G-E