Allied Timbers Holdings v Kingston Chikumbu

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT
NO. LC/MC/05/13
HELD AT HARARE ON 28th JANUARY, 2013
CASE NO. LC/MC/10/2011
JUDGMENT NO. LC/MC/05/13
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IN THE LABOUR COURT OF ZIMBABWE      	JUDGMENT NO. LC/MC/05/13

HELD AT HARARE ON 28th JANUARY, 2013	 CASE NO. LC/MC/10/2011

In the matter between

ALLIED TIMBERS HOLDINGS     	    		 - 	Appellant

And

KINGSTON CHIKUMBU					 -	Respondent

Before The Honourable L. Kudya, President

For Appellant	:Mr. T. Mukwindidza (Legal Practitioner)

For Respondent	: Mr. C. Dhlovu (Legal Practitioner)

KUDYA, L.

This is an appeal against the decision of the Arbitrator who made an order in favour of the employee against the now Appellant Company.

The brief facts of the case are that the Respondent took up issue with the Appellant Company over his employment status and benefits which were due to him. When the Appellant Company failed to resolve the issue in question within the prescribed time limits Respondent approached a Labour Officer for conciliation. This failed and the matter ended up at the Arbitrator’s desk.

When the Arbitrator heard the matter, he ruled in Respondent’s favour. Aggrieved by the Arbitrator’s decision, the Appellant Company then approached this Court for relief.

The basic grounds of appeal which were cited by the Appellant company are as follows:-

The Arbitrator erred by holding that he had jurisdiction to entertain the matter when it was clear that the Respondent had not exhausted internal remedies.

The Arbitrator erred by holding that Respondent had become Managing Director of Allied Timbers (A.T.S.)by operation of law.

The Arbitrator erred by disregarding a valid contract which was signed by Respondent, which contract did not confirm Respondent as Managing Director and varied anything which existed prior to its signing.

The Arbitrator erred by awarding benefits that were not due to the Respondent.

The Arbitrator erred in stating that internal remedies were frustrated by the Group Chief Executive Officer without stating any evidence or explanation to that extent.

The Arbitrator erred by holding that six months probation was illegal under the circumstances vis-à-vis the position of Managing Director.

The Appellant Company accordingly prayed that the appeal succeeds and that the Arbitrator’s decision be set aside and substituted with an order dismissing the Respondent’s claims.

In response the Respondent argued that the Arbitrator had jurisdiction to deal with the matter, that he did not err in any of the manners alleged by the Appellant Company and finally that he interpreted the law accurately to arrive at the decision which he arrived at in this matter. In essence the Respondent maintained that the Appellant’s company had failed to make out a good basis for the Court to upset the Arbitrator’s decision. He therefore in turn prayed that the Arbitrator’s decision be upheld in its entirety.

From the onset it is worth noting that there was very little common ground as regards the facts of the case. A reading of the submissions by the claimant and the Respondent at the Arbitrator’s as well as the background to the case given in the Heads of Argument by both  parties clearly show that there was disagreement as to the major facts of the case.

Issues of the status of the company where instant allegations arose and the company which took Respondent in after he had lost his job with the earlier company speak volume about the fact that it was unclear as to how the companies were operating vis-à-vis the conditions that related to the Respondent as an employee. In the result, the decision had to be made based on the submissions and documents filed of record to confirm or deny the correct status that Respondent had as well as what was legally due to him in terms of his contract of employment.

In summary it is pertinent to note the following facts before one delves into the propriety or otherwise of the Arbitrator’s decision/award. As regards the Appellant, it is its facts that Respondent was employed in an acting capacity as a Managing Director in a position where his contract of employment stated that he was to be Acting Managing Director subject to satisfactory performance before he could be confirmed as a substantive Manager.

It goes on to state that Respondent failed to work to expectation to the extent that in one year the losses by the company he was Acting Managing Director for Allied Timber Saligna led to his losing his job and reassignment to Allied Timber Zimbabwe  a subsidiary of the Appellant Company in the position of Divisional Manager.

Appellant stated further that Appellant’s performance led to his loss of a job as an Acting Managing Director and his subsequent taking up of a new job offer with Allied Timber Zimbabwe. It therefore maintained that the new contract superseded the contract which respondent had originally with A.T.S. hence he was now bound by the new contract terms even if they were less favourable than those which obtained on the Managing Director’s contract.

It stood by the fact that for all intents and purposes Respondent had voluntarily signed a new contract with A.T.Z. and he had to stick to the conditions of that and not to seek to have terms in the Managing Director’s contract apply to him as he sought to do before the Arbitrator.

The Respondent’s version of the facts is that he was appointed as a Managing Director on an acting capacity over his probation period of 6 months after which he became substantive Manager by operation of law since the Appellant Company did not either confirm him or dismiss him from that position at the expiration of the probation period.

It is his contention that he became a substantive Manager with all the entitlements that went with that position. He agrees that he indeed signed a new contract with less favourable conditions but argues that he did so under duress from his personal circumstances where he now realized that he was out of a job when Appellant had engaged someone in his stead when he came back from a lawfully granted vacation leave.

It is his contention that his signing of the new contract was only meant to mitigate his losses and put self on some meaningful financial footing pending his pursuit of his claims with the Appellant Company. He stated as a fact that since  ATZ and ATS were  separate legal entities there is no way that  respondent could have signed off his rights under ATS when he took up the new and relatively lower position at A.T.Z.

He maintained that A.T.S. legally owed him his dues for the period when the law deemed him to be a substantive Managing Director. Any effort to give him anything less based on the new contract with A.T.Z. was not in keeping with what the law dictates. He maintained that, notwithstanding the new contract with A.T.Z, A.T.S. had to re-dress issues that he had unsuccessfully tried to have redressed by the Appellant Company. This was after he realized that he had been subjected to an unfair labour practice by the Appellant Company when A.T.S. dismissed him and A.T.Z. engaged him on the new contract.

The law as regards appeals against arbitral awards is clearly set out in the Labour Act [Cap 28:01] which states:

Section 98(10)”An appeal on a question of law shall lie to the Labour court

from any decision of an arbitrator  appointed in terms of this section”

As regards what a point of law or fact is, this is clearly set out in the case of Sable Chemicals Industries Ltd vs David Peter Easterbank SC 18-10 where Garwe JA stated that a point of law is

“1.A question which the law itself has authoritatively answered to the exclusion of the right ofthe court to answer the question as it thinks fit in accordance with what is considered to be the truth and justice of the matte

2. A question as to what the law is, thus an appeal on a question of law means an appeal in which  the question for argument and determination is what the true rule of law is on a certain matter

3. Any question which is the Province of the judge instead of the   jury is called a question of law.  A serious misdirection on the facts amounts to a misdirection in law as the giving of

reasons that are bad in law constitutes  a failure to hear and determine according to law .”

Stemming from the above quotation, the question which this Court has to answer is whether or not before it have been raised points of law on which the Arbitrator is said to have erred on which justify interference by this Court.

A reading of all the grounds of appeal shows that most of the issues raised by the appeal are not points of law but of fact and these are not valid for purposes of an appeal in terms of the above quoted law. However some of the issues in particular the first ground actually raises a ground of review not even appeal.

In view of the fact that separate procedures for appeal and review are set out in the Labour Court Rules it was imperative that the review grounds and the appeal grounds be stated and dealt with separately as provided for by law. However the Court decided to condone that anomally for the sake of effecting social justice as stated in Section 2A of the Labour Act which reads:

”The purpose of this Act is to advance social justice and democracy in the workplace”.

The court therefore dealt with each of the grounds as they were put down by the Appellant Company, responded to by the Respondent and as amplified by both parties’ Heads of Argument.

On the 1st ground on jurisdiction it is important to note the following: A reading of all the papers in the record demonstrate that the Respondent only approached the Arbitrator after he had engaged the internal systems for redress.

It is only after these had failed that he saw himself approaching a Labour Officer and finally the Arbitrator to get redress. The record of proceedings states that the Appellant Company does not dispute that Respondent engaged it and correspondence on the record like the letter dated 14th July 2010 on page 28 of the record, the minutes dated 19th August 2010 on page 3 of the record are examples which demonstrate that Respondent tried to have his matter resolved internally to no avail. In any event, the quotation from the Group Chief Executive Officer’s letter on page 42 of the record where he was quoted writing to the Respondent that

“……… you are free to seek external remedies if you are not satisfied with this resolution”

Shows that Respondent had done all that he could to have the matter resolved internally. The Group Chief Executive Officer gave him leave to seek external redress and he did exactly that by approaching the Labour Officer and subsequently the Arbitrator.

A reading of the Arbitrator’s analysis on why he was of the opinion that the matter was properly before him demonstrates clearly that the Respondent had exhausted all the internal remedies so the matter was properly before the Arbitrator.

It is also important to note that the Respondent sought to have the issue addressed as early as May 2010 and still by September 2010 the issue was unresolved contrary to the 30 day period of the conclusion of the matter stipulated by the Act. The Court does not find anything irregular in the Arbitrator being seized with the matter and making a determination on it as he did. This Court is therefore satisfied that the first ground of appeal has no merit and it has to be dismissed.

The second and the sixth grounds are basically on the same issues so these will be addressed at the same time for expediency’s sake. The law regarding substantive status of an employee is stated clearly in section 12 (3) of the Labour Act Chapter 28:01 which states:

“A contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some service shall be deemed to be a contract without limit of time”

This Section shows that where there is not cut-off point on a contract it shall be deemed that the employer intended to have the employee work for him/it indefinitely.

In the instant case, the Arbitrator firstly noted that there were no internal performance appraisals for the Respondent which put a stop to his contract. The letter by the Group Chief Executive Office dated 20th September 2010 directed to the Human Resources Administration Director shows that

the Respondent had not been appraised,

had not been given a copy of his contract, and

that the Chief Executive Officer was expressing dismay at how the Human Resources Head handled the Respondent’s case.

In the result, the Court cannot fault the Arbitrator for having found that, after the Respondent acted beyond the time required by the Act on probation he was therefore deemed to have become permanent. There was no misdirection on the Arbitrator in making such a finding.

If the Appellant was not happy with the Respondent’s performance it should have taken action against him when the duty to do so fell on it. For it to retain the Respondent and only tell him that his job was gone for ill-performance which he had not been properly appraised for was in the Court’s view irregular in the circumstances.

Appellant argued that Respondent signed a contract which stipulated a period of 6 months probation contrary to what the law provides for in Section 12(5(b) which states “A contract of employment  may provide in writing for a single non-renewable probationary period of not more than

(b) three months in any other case”.

This means that the “signer beware maxim” applied to him.  It went on to quote the case of Muchabaiwa vs. Grab Enterprises 1996(2) ZLR 691 PER Korsah J. to illustrate its point.

It is however worth noting that the law is clear that even if someone agrees to an illegal action his signature shall not validate that illegality neither shall anyone benefit from that illegality (see case of Siphathisiwe Moyo vs Abraham K Ndhlovu and City of Bulawayo HB96/08 where Cheda J had this to say about illegal contracts “It is now trite law that the court will deny its assistance to a party to a contract which is clearly illegal”.

Even though the facts in the Moyo case (supra) dealt with the enforcement of an illegal contract, the principle applies with equal force to the facts of the instant case where the Appellant seeks to   hold the Respondent to his signature on a contract whose probationary period was contrary to what the law provides for.

Since the law states clearly that probation shall not extend beyond 3 months before confirmation to substantive status or advising the incumbent that he/she has been unsuccessful in that office, any provision in the Appellant’s Code of Conduct/document which it might have made Respondent to sign to give effect to such an illegality is therefore of no force or effect.

The Court is satisfied that there was no misinterpretation of the law or gross misdirection by the Arbitrator in  finding that the Respondent had become substantive Managing Director by operation of law once the probation period expired. There is therefore no merit in appeal grounds 2 and 6. They both should accordingly fail.

As regards Ground 3, this is also a factual ground which does not entitle the Appellant to the relief that it is seeking. The Arbitrator’s reasoning why he accepted that the contract with A.T.Z. was in no way linked to the contract with A.T.S. which is the subject of this appeal in the Court’s view cannot be faulted. Suffice therefore to mention that this ground has no merit for reasons already stated and should also fail.

As regards Ground 4, the Court is not satisfied that the Arbitrator acted irregularly by awarding the Respondent the Managing Director’s benefits once he had ruled that the Respondent was indeed in that position as a substantive Managing Director. It therefore followed that there was nothing amiss about ordering that he be paid what was due to him. This Court therefore finds no merit in this ground of appeal. It should also fail.

The final Ground to be dealt with is where the Appellant argues that the Arbitrator ruled that internal remedies were frustrated by the Group Chief Executive Officer yet there was no evidence to that effect.

This ground is also a factual ground which is no basis for upsetting the Arbitrator’s decision unless if it can be held to have been so irrational as to be capricious. A reading of the Arbitrator’s ruling clearly spells out why he was convinced that the internal remedies had been frustrated by the Group Chief Executive Officer. He makes reference to the manner in which the Group Chief Executive Officer related to the Respondent.

Correspondence between them and its tone gave testimony to that fact. It is therefore clear that the finding by the Arbitrator in this respect was well founded. This Court is not persuaded that it was irrational as to be capricious calling for this Court’s interference. This ground must also fail on the above basis.

In view of the above analysis, it is clear that the Appellant failed to make out a good case for the upsetting of the Arbitral Award.

It is therefore ordered as follows:

That the appeal being without merit be and is hereby dismissed with costs in its entirety.

The Arbitrator’s order of 25th February 2011 is accordingly upheld in its entirety.

L. Kudya

PRESIDENT – LABOUR COURT

Bere Brothers Legal Practitioners- Appellant’s Legal Practitioners

Gonese and Ndlovu Legal Practitioners- Respondent’s Legal Practitioners