Brighton Mutanhau v Field Technical Services

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/98/2014
HARARE, 31 OCTOBER 2012, 14 MARCH
2013, 20 FEBRUARY 2014 &
CASE NO LC/H/77/2012
JUDGMENT NO LC/H/98/2014
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IN THE LABOUR COURT OF ZIMBABWE	JUDGMENT NO LC/H/98/2014

HARARE, 31 OCTOBER 2012, 14 MARCH	CASE NO LC/H/77/2012

2013, 20 FEBRUARY 2014 &

28 FEBRUARY 2014

In the matter between:

BRIGHTON MUTANHAU					APPELLANT

Versus

FIELD TECHNICAL SERVICES				RESPONDENT

Before The Honourable F C Maxwell  :  Judge

For the Appellant		E Jera (Legal Practitioner)

No Appearance for the Respondent

MAXWELL J:

The appellant was employed by the respondent as a hydraulics and pneumatics technician. He resigned from employment on 8 December 2010 after giving three months’ notice. Upon termination of the contract of employment the parties agreed that, the amount due to the appellant was $2 727-87 being outstanding salaries and terminal benefits. The appellant wanted the whole amount to be paid at once while the respondent offered to pay in instalments of $350-00 per month starting March 2011 and ending December 2011. The parties failed to agree on the period of payment and the matter was referred to conciliation. No settlement was reached and the matter was referred to conciliation. No settlement was reached and the matter was referred to arbitration. The arbitrator ordered the payment to be made in three instalments of $909-00 per month with effect from February 2012 failing which cumulative interest of 7% would be levied on the outstanding amount. The appellant had requested for an order that, the respondent be made to bear all the legal costs relating to the arbitration proceedings as a punitive measure. The arbitrator however, ordered that, each party would be liable for the costs related to legal representation.

Aggrieved by the arbitrator’s decision, the appellant appealed to this court. His grounds of appeal are:

The arbitrator erred at law in despite funding (sic) that, the respondent is committing an unfair labour practice on the appellant, failed he make an order for cessation of the unfair labour practice or punishment of the respondent.

The arbitrator also erred at law in ordering that, the appellant’s terminal benefits should be paid out in three (3) equal monthly instalments despite the same having been overdue for over a year thereby, maintaining the status quo.

The arbitrator erred at law, in refusing to entertain the issue of payment of legal costs and arbitration fees thereby further punishing the appellant for seeking recourse against the unfair labour practice committed on him.

Heads of argument, filed by the respondent point out that, like most employers, the respondent was facing financial problems and could not pay off the appellant’s terminal benefits at once. The respondent further points out that, the terminal benefits were paid in full after the arbitral award. On 13 December 2010 (must be 13 December 2011) the respondent issued out cheques which in total cleared the terminal benefits. The respondent also pointed out that, at the preliminary arbitration meeting, the appellant had agreed that, he would meet all the legal costs. The appellant had insisted that the matter be heard before an independent arbitrator whereas the respondent, because of financial difficulties, was pleading thatthe matter be heard by a Government arbitrator.

By notice dated 29 January 2014 the Registrar notified the parties that, the matter is set down for hearing on 12 February 2014. However, despite receiving the notice on 3 February 2014, the respondent was in default on the date of hearing. The appellant applied for the appeal to be upheld with costs on a legal practitioner and client scale.

Rule 30 of SI 59/2006 governs proceedings where a party is in default. The rule provides that:

“… the court may, according to the nature of the case, or as the justice of the case requires-

Proceed with the hearing on the merits; or

Postpone the matter; or

Upon application by the party in attendance, enter default judgment.”

The court decided to deal with the matter on merits. A perusal of the record reveals that the arbitrator’s decision is unassailable. The first and second grounds of appeal fault the arbitrator for not ordering a once off payment of the terminal benefits. Page 9 of the record gives the reasons for the arbitrator’s decision. The last paragraph on that page starts off as follows:

“However I cannot also turn a blind eye to the respondent’s financial predicament from the evidence adduced before me, there were some efforts by the respondent to alleviate these financial challenges. In light of this, I will give an order which will accommodate the interests of both parties.”

The evidence that is on record reveals the following:

By letter dated 10 January 2011 the respondent proposed paying $350-00 monthly as from the month end of March to December 2011. The respondent indicated that in those periods capacity is there more will be paid in order to quickly clear the outstanding balance of the terminal benefits.

By letter dated 19 January 2011 the appellant rejected the proposal and suggested that at its worst the payment period must be two months, January and February 2011.

On 26 January 2011 the respondent replied to the appellant’s letter of 19 January 2011. The shortening of the payment period was considered ideal but the critical factor was affordability. The respondent further stated that:

“… as a recent member of FTS you understand our cash flow position. To date, the situation has not changed and I believe this is one of the reasons that led to your decision to leave FTS.”

The background of the respondent’s financial position is reflected in letters in the record. On 4 June 2009 the respondent applied for exemption from paying the minimum wage decided by an arbitrator on 25 May 2009. The basis of the application was an agreement between management and the employees at a works council meeting held on 2 June 2009. Financial statements were attached to the application. The letter also indicates that a works council meeting of 20 February 2009 had agreed on an internal staggering payment plan for wages as the company was not able to pay every month end. This arrangement was to remain in place until 31 July 2009 (page 40 of record).

On 29 July 2009 the respondent applied for short working hours. This was also an agreed position between management and employees. Financial statements were attached as well as a schedule of balances still to be paid to employees (page 41-42 of record).

Page 45 of record confirms that, the appellant was employed in October 2009. Nothing on record shows that the financial position of the respondent had improved. He therefore, joined a company that was struggling financially.

The appellant’s counsel in a letter to the human resources manager of the respondent on 15 July 2011 states:

“… the company is indeed in a position to pay our client his terminal benefits as agreed. We are fortified in this belief by the fact that the company is indeed operational and had assets which it could have utilised if it indeed desired to pay him.”(pp 45 – 49 of record).

In my view, this confirms that the appellant was aware that the respondent was struggling. What he had hoped for, in my view, was that the respondent would dispose of some assets to pay him. There is no indication on record that the respondent had ceased operating or was ceasing. There is no evidence that there were no other employees still with the respondent. The appellant’s interests had therefore to be balanced against the continuity of the respondent in view of its attitude, willingness to settle and affordability. In the same letter of 15 July 2011 the appellant’s counsel also states:

“We are instructed that on conciliation, the company insisted that it did not have the money to pay as a result of which the matter was referred to a government arbitrator.”

At arbitration the respondent submitted that it could not afford a once off payment. The respondent was consistent in its position that it had problems with financial capacity. The decision by the arbitrator not to order a once off payment was an exercise of discretion. The appeal is therefore asking this court to interfere with the exercise of that discretion by the arbitrator. In the words of GUBBAY CJ (“as he then was”) in Barros & Anor v Chimphonda 1999 (1) ZLR 58 p 62 such discretion may only be interfered with on limited grounds:

“These grounds are firmly entrenched. It is not enough that the appellate court considers that if it had been in the position of the primary court, it would have taken a different course. It must appear that some error has been made in exercising the discretion. If the primary court acts upon extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not take into account relevant some consideration, then its determination should be reviewed and the appellate court may exercise its own discretion in substitution...."

See also Paul Gary Friendship v Cargo Carriers Ltd & Anor SC-1-13;Nyahondo v Hokonya & Ors 1997 (2) ZLR 475and S v Nhumwa SC-40-88.

In the circumstances of this case, I find no reason to interfere with the arbitrator’s decision. The two grounds of appeal therefore fail. The third ground of appeal faults the arbitrator for not ordering the respondent to pay legal costs and arbitration fees for the appellant. In the appellant’s view, this was tantamount to punishing him for seeking recourse against the unfair labour practice committed on him. On page 9 of the record the arbitrator said:

“With regards to payment of arbitration fees and legal costs, evidence before reveals that the matter had been referred to an independent arbitrator at the insistence of the claimant and therefore as highlighted in the pre-arbitration session, the claimant had to bear the full arbitration costs. Each party will be liable for the costs related to legal representation.”

The appellant alleged that there were no arbitrators in the Ministry of Labour at the relevant time and referring the matter to a government arbitrator was synonymous with postponing the matter and all payments indefinitely (see p 48 of record). However, this allegation was not substantiated. On the contrary on p 47 of the record there is a letter dated 2 September 2011 to the designated agent showing that the appellant interrupted the process of appointment of a government arbitrator for purposes of expediency. Page 46 of the record has a letter to the labour officer in which the appellant’s counsel declares that the appellant is in a position to meet the independent arbitrator’s fees. He was however, requesting the terms of reference to be amplified to include the issue of costs.

In his submissions to the arbitrator, the appellant indicated that the referral of the matter to an independent arbitrator was on condition that, the arbitrator should also make a determination on the issue of costs in accordance with the circumstances of the case. He then put the second issue for determination as “who should pay the legal costs and at what scale (p 12 of record)?” On p 14 of the record the appellant then submits that the respondent should and must be ordered to pay the costs of the arbitration at a punitive scale of a legal practitioner and client scale. He submits that, this would adequately compensate him for the losses he incurred in pursuit of the matter as a result of the respondent’s attitude in stubbornly and unreasonably refusing to pay him his terminal benefits as and when they fell due. He believes, he was suffering for having taken the matter to labour and this is compounded by the fact that other employees were paid without any hustle.

The respondent responded by saying thatit had been agreed in the preliminary meeting that the appellant would incur all the arbitration cost as the respondent was struggling to meet its financial obligations.

The appellant did not give any facts to substantiate the suggestion that other employees were treated differently because they did not litigate. The respondent’s submission is supported by the letter on p 46 that the appellant stated that he was in a position to meet the arbitrator’s fees. That the arbitrator did not award costs is an exercise of discretion. I have already dealt with the issue of discretion above and I find no basis for interfering with it. The appellant made a decision to litigate in circumstances were the respondent was admitting liability and requesting for terms of payment. At no time did the respondent display a malicious attitude by refusing to pay when it had capacity to. Consistently the respondent pleaded inability to make a once off payment. The third ground of appeal on that basis fails.

At the hearing of the matter the appellant requested for an order of costs on a legal practitioner and client scale. In my view, costs on a higher scale are warranted where an unsuccessful party’s conduct amounts to an abuse of court process and his actions result in unwarranted expense to the other party. For this view see Mudzimu v Municipality of Chinhoyi & Anor 1986 (1) ZLR 12. In the circumstances of this case, I am not persuaded that the cost incurred by the appellant was as a result of the respondent’s conduct. If anything, the respondent incurred costs as a result of the appellant’s refusal to accept the fact that, there was no capacity to make a once off payment. However, since the respondent defaulted court, I will not make any order of costs.

Accordingly I find no merit in the appeal and it must fail. I therefore order as follows:

The appeal be and is hereby dismissed for lack of merit.

There is no order as to costs.

Moyo & Partners, appellant’s legal practitioners