Blue Ribbon Foods Limited v Godfrey Tsatsa and 10 Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/146/2025
HARARE, 29 JANUARY, 2025 AND
8 APRIL 2025
CASE NO LC/H/1176/24
JUDGMENT NO LC/H//
CASE NO LC/H/1176/24
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IN THE LABOUR COURT OF ZIMBABWE	         	JUDGMENT NO LC/H/146/2025

HARARE, 29 JANUARY, 2025 AND

8 APRIL 2025                             		                      CASE NO LC/H/1176/24

BLUE RIBBON FOODS LIMITED				APPELLANT

GODFREY TSATSA AND 10 OTHERS		 		RESPONDENTS

Before the Honourable G. Musariri, Judge:

For Appellant			- R. Magundani, Attorney

For Respondents		- M. Gwisai, Attorney

MUSARIRI, J:

On 2nd October 2024 Arbitrator P. Chirongoma ordered appellant to reinstate respondents’ employment. Appellant then appealed the arbitral award to this Court in terms of Section 98(10) of the Labour Act Chapter 28:01 hereafter called the Act. Respondents opposed the appeal.

The grounds of appeal were three-fold as follows;

“1. The arbitrator grossly erred in law in

Finding that Sections 12C (2), (3) and (4) and Section 12D (2a) to (9) of the Labour       Act required that an employer consults and seeks input from the Employment Council and Retrenchment Board before carrying out a retrenchment exercise. Consequently, the tribunal erred in holding that the Appellant failed to comply with Sections 12C and 12D of the Labour Act in carrying out the retrenchments.

Finding that the Appellant was required to consult the Minister, the Employment Council and/or Retrenchment Board and agree on the retrenchment package before payment was made to the retrenched employees.

(The paragraph was abandoned.)

In finding, contrary to the evidence on record, that the Appellant had not challenged the Respondents’ submission that the taking of the retrenchment package did not disentitle them from filing their claim. Consequently, the arbitrator grossly erred at law in failing to find that the concession by the Respondents that they had knowingly consumed the retrenchment packages constituted a waiver which rendered the dispute moot.

2. 	Consequently and, as a result of the foregoing, the arbitrator erred in concluding that the retrenchment of the Respondents was in violation of Section 12C and 12D of the Labour Act, and therefore invalid.

3. 	The arbitrator erred in granting an incompetent order which awarded the reinstatement of the Respondents without the alternative option to pay damages in lieu of reinstatement.

Wherefore…”

On the basis of these grounds appellant prayed that the arbitral award be set aside.

In their opposing affidavit the respondents countered thus;

“Ad Ground 1

5. The Designated Agent did not err at law in finding that Sections 12C (2), (3) and (4) and Section 12D (2a) to 9 of the Labour Act… were not complied with.

6. (Dealt with the abandoned paragraph 1.3 of the grounds of appeal.)

7. The Designated Agent did not err in law that the consumption of the retrenchment package did not constitute waiver. The factual finding by the Designated Agent is reasonable and consistent with the facts of the matters. I am advised that the factual finding of a first tribunal which is not irrational is not appealable.

Ad Ground 2

8. The ground is invalid being repetitive of Ground 1. The Designated did not err in ruling that the retrenchment was invalid as the said retrenchment violated the peremptory provisions of the Act and caused material prejudice to the employees.

Ad Ground 3

9. The Designated Agent did not err in any manner. He made a ruling that the retrenchment of the Respondents was a nullity for lack of compliance with the peremptory provisions of a statute. The effect of such ruling is to restore the status quo ante. In circumstances of an order of nullity, there is no requirement for an alternative order for damages. The Designated Agent therefore did not err at law by not issuing an alternative order for damages.

Wherefore…”

The Respondents then prayed for the dismissal of the appeal.

Analysis

Firstly the Court agrees with respondents that the 2nd ground of appeal is a repetition of the last sentence in ground 1.1. The remaining 2 grounds and the response thereto raise 2 issues which shall dealt with ad seriatim.

1. Whether appellant was required to consult with the Employment Council and the Retrenchment Board before carrying out the retrenchments:

The arbitrator opined as follows;

“However, beyond such consultations, the Authority is of the view that Respondent was in total disregard of the dictates of Section 12C (2) (3) and (4) and Section 12D (12a) to (9) of the Labour Act (Chapter 28:01) Respondent merely informed both the Council and the Retrenchment Board and proceeded to pay such packages without waiting to hear from either for their input. Respondent also chose not to address the critical allegation that they had subcontracted work, and hired contract employees even when they pursued and eventually retrenched claimants.”

The case hinges on an interpretation of the interplay between Sections 12C and 12D of the Act. Appellant purported to retrench respondents in terms of 12C. However 12C is subject to 12D which provides that;

“(2) Subject to this Section, before giving notice of the intention to retrench any employees in terms of Section twelve C, an employer may agree with the employees concerned, or with any workers committee or works council which represents the employees, to have recourse to either or both of the following measures…”

(2a) If no agreement is reached in terms of subsection (2) an employer shall give written notice of his proposed measures to avoid retrenchment, and of the opposing proposals, if any, to-

the employment council established for the undertaking or industry; or

the Retrenchment Board, if there is no employment council for the undertaking concerned;”

A proper reading of the quoted provisions shows that the employer is peremptorily required to give notice of his measures to avert retrenchment to either to the Employment Council or Retrenchment Board and awaiting their response before Section 12C kicks in. Therefore the arbitrator was correct in concluding that appellant unlawfully retrenched respondents without fully complying with the requirement of the relevant sections. Appellant’s argument that it was not required to comply with 12D amounts to an abrogation of 12D contrary to the canon of statutory interpretation that each provision must be given its full effect.

Whether appellant was required to consult the Minister, Employment Council and/or Retrenchment Board before paying retrenchment packages:

The arbitrator found as follows;

“It is however not clear in the submissions filed for the record whether payments which were done as packages met the prescribed minimum package given in Section 12C (2) of the Labour Act (Chapter 28:01). It is without doubt the Retrenchment packages were paid unilaterally and without regard to the due process dictated by the Act, as in the absence of an agreement, consultations with both the Council for the industry and the Retrenchment board and beyond that, the Minister, which are prescribed, were not done.”

Under section 12D (2a) and (2b) of the Act it is clear that if an employer’s proposal to avert retrenchment is rejected by the employees the matter must be escalated to the Employment Council or Retrenchment Board or finally the Minister for a final decision on the proposal.

This is before section 12C kicks in which permits the employer to give notice of retrenchment. Evidently the arbitrator’s take on this issue was correct.

Whether the respondents waived their right to challenge their retrenchment:

The arbitrator concluded that;

“The Tribunal believes that the claimants had every right to frown upon the actions of the Respondent in the prevailing circumstances. This is in light of the Tribunal’s finding that in implementing the retrenchment process, Respondent had not done so to the letter and spirit of Sections 12C and 12D. In the circumstances the Tribunal is of the view that the Claimants could not have been expected to accept that they had waivered their right to pursue the matter, as Respondent was equally guilty of the same.”

The arbitrator relied on the case of;

Stanbic v Charamba 2006(1) ZLR 96(S)

Per Sandura JA

P 101A noted

“On 7 February 2005, when the parties appeared in the Labour Court for the hearing of the appeal and cross-appeal, the Bank withdrew its appeal stating, inter alia, as the full severance package had already been paid to Charamba, there was no longer any need for challenging it. However Charamba persisted in his cross-appeal.”

P 106 D-E ruled

“There were, therefore, many respects in which the peremptory provisions of the Regulations were completely ignored. It follows that Charamba’s retrenchment was not carried out in terms of the Regulations, and that in terms of s 10 of the Regulations the purported retrenchment is of no effect whatsoever.

In the circumstances, the appeal is dismissed with costs.”

The Charamba case shows that payment of the retrenchment package does not save a retrenchment that fails to comply with the applicable law. Applicant sought to rely on the earlier Supreme Court judgment in

Chidziva v Zisco 1997(2) ZLR 386(S)

which applicant paraphrased as where

“It was held that notwithstanding the failure to abide by the peremptory provisions of the retrenchment process, the voluntary acceptance of the retrenchment package by the retrenchees amounted to a waiver of the legal rights to challenge the propriety of the retrenchment process.”

If appellant’s take of the Chidziva case is correct, then clearly it is at odds with the Charamba case. The latter being the later ruling by the same Court overruled the former case to the extent of the inconsistency. Again the arbitrator correctly relied on the Charamba case.

Conclusion

It is apparent from the foregoing analysis that the issues in casu resolve against appellant. In summary the arbitrator correctly found that the retrenchment was void for failure to comply with peremptory provisions of the applicable laws. Therefore the appeal ought to be dismissed as devoid of merit.

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Wherefore it is ordered that,

The appeal be and is hereby dismissed; and

Each party shall bear its own costs.

G. MUSARIRI

J-U-D-G-E