Construction Industry Pension Fund v Ntando Ivin Sibanda

### Preamble
IN THE LABOUR COURT OF ZIMBABWE HARARE, 10 MAY, 2022 AND 21 JULY, 2023
JUDGEMENT NO. LC/H/224/23
CASE NO. LC/H/340/21 CASE
REF. NO. LC/H/378/21
In the matter between: -
CONSTRUTION INDUSTRY PENSION FUND APPELLANT
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IN THE LABOUR COURT OF
ZIMBABWE HARARE, 10 MAY, 2022
AND 21 JULY, 2023

JUDGEMENT NO. LC/H/224/23
CASE NO. LC/H/340/21 CASE
REF. NO. LC/H/378/21

In the matter between: -

CONSTRUCTION INDUSTRY PENSION FUND
VS.

NTANDO IVIN SIBANDA
AND

NTANDO IVIN SIBANDA
VS

CONSTRUCTION INDUSTRY PENSION FUND
Before the Honourable B.T Chivizhe: Judge

CROSS APPELLANT

CONSTRUCTION INDUSTRY PENSION FUND
For Appellant/Cross-Respondent : Mr D.C. Fanti, Legal Practitioner
For Respondent/Cross-Appellant : Mr R. Myzee, Legal Practitioner

CHIVIZHE, J:

The two matters were placed before me as an appeal and a cross appeal against determination of the Disciplinary Authority in which the Respondent/Cross Appellant was convicted of misconduct and a final written warning issuing as a sentence. They are both opposed. Both matters were heard before me on $10^{th}$ of May, 2022. For convenience the Appellant/Cross-Respondent and the Respondent/Cross-Appellant shall be referred throughout as the Appellant and Respondent.

The material background facts are as follows;


The Respondent is a Risk and Compliance Manager under the employ of the Appellant. On 11 March 2021 the Respondent spilled tea on his office laptop leading to the machine malfunctioning and it was sent for repairs at the cost of the Appellant.

Following upon the report being made the Appellant conducted an investigation and findings were made that Respondent had contravened Clause 3.7 of the ICT Policy which has provisions that prohibit consumption of food and drinks near computers and all ICT hardware. This policy was said to be well known to the Respondent who had committed himself to uphold the same in the contract of employment between the parties.

On 23rd of June, 2021 the Respondent was notified to attend the disciplinary proceedings on a charge of conduct or omission inconsistent with the fulfilment of the express or implied condition of his contract of employment in terms of Section 4(a) of the Labour National Employment Code of Conduct, Statutory Instrument 15 of 2006.

The Appellant appointed a Disciplinary Authority to conduct the proceedings. The Respondent, after a fully-fledged hearing, was found guilty of the charge. The Appellant in aggravation was asking for a penalty of Dismissal to be imposed. The Disciplinary Authority, however, after considering the submissions by both parties imposed a penalty of a Final Written Warning.

The Appellant was aggrieved by the penalty so imposed and noted the present appeal. It is important to also note that Respondent was also dissatisfied with the determination and noted a cross-appeal.

PRELIMINARY POINTS

Both the Appellant/Respondent raised points in limine. In view of the nature of the point of law taken by the Respondent being one where, should this court find that it has merit, is capable of disposing this matter, the court shall therefore address that point initially. The Respondent raised a point of law to the effect that the proceedings before the disciplinary authority were void ab initio for want of compliance with Clause 8.1.6 of the Risk Management and Corporate Governance Guideline of the Pensions Industry, 2020. In particular Respondent contends that there was no approval or consultation of the Board preceding the disciplinary proceedings. As the issue was raised for the first time during the hearing the court requested the parties to file supplementary heads of argument to address only this point of law. Both parties duly filed the same.

The Respondent submitted through his heads that he was employed as a Risk and Compliance Manager of the Pension Fund; the Insurance and Pension Commissions (IPEC) Risk Management and Corporate Governance Guidelines issued were in terms of Statutory
 Instrument 69 of 2020, he had requested through several correspondence to Appellant’s legal representative for the Construction Industry Pension Find (CIPF) Board resolution and minutes reflecting the Board approval or consultation before the instituting of disciplinary proceedings; the Board Resolution and Minutes were never made available. The Respondent also outlined in his heads the provisions under the Insurance Act [Cap 24:21] which provide for functions and powers of Insurance and Pension Commissions (IPEC). In Section 4 of the same Act the Appellant as a registered Pension Fund for the Construction Industry also falls under the purview of IPEC; it is therefore mandatory that it should comply with regulations/guidelines issued by IPEC in terms of the law.

Respondent submits further that he was appointed to position of Risk and Compliance Manager under provisions of Section 8.4 of the IPEC Guidelines. The Appellant had duly notified IPEC of his appointment as required under Section 7 paragraph (5) of the IPEC guidelines. Sections 8.1.5. and 8.1.6. of the same guidelines address the issue of appointment, performance assessment, remuneration, disciplinary and dismissal of the Head of Control function to be done with approval and/or the consultation with the Board.

The Respondent’s submission is that Appellant having failed to comply with Section 8.1.5. and 6 of the guidelines the disciplinary proceedings were therefore unlawful and a complete nullity. The Respondent has referred to Tamanikwa & Ors vs. Zimbabwe Manpower Development Fund, 2013 (2) ZLR 46(S) and Standard Chartered Bank of Zimbabwe vs. L. Matsika 1996 (1) ZLR 123 (S); Mugwebie vs. Seed CO Ltd 2000 (1) ZLR 93.

The Appellant’s submissions in counter are that; Clause 8.1.6 of the Guidelines is not applicable to Respondent; and in the event that the court finds otherwise, the Board was in any event consulted and did not object to the institution of disciplinary proceedings against the Respondent. The Appellant further submits that although Clause 8.15 as read with clause 8.16 of the guidelines do provide for the appointment of a head of control function for each respective control function the clause does not provide the definition of a “head of control function”. The Appellant further contends that the Respondent has also failed to establish in these proceedings how he became a “head of control function”. The Appellant’s position is Respondent was appointed as a Risk and Compliance Manager as reflected in the contract which is attached to its papers as Annexure “B”. The contract makes no reference to a “head of control function”. The Appellant’s further position is Respondent was only appointed as an employee in a control function for the purpose of Clause 8.3. The Appellant also notes that the guidelines came into effect in April 2022 whereas the Respondent was appointed to his position in November 2022. The Appellant further contends that the Respondent has also failed to show, if indeed he was such a head of control function, that he was executing the other functions as specifically provided under the guidelines, such as regularly reporting to the Board or Committee of the Board and communicating directly with the Chairperson of the Board for the purpose of Clause 8.20. No proof in fact has been tendered by Respondent to substantiate his claim to be a head of control function. The Appellant has further sought to outline the difference between a “head of control function” and a manager employed in a control function.

The Appellant has submitted, *ex abundati cautela*, that the Board was aware of the disciplinary proceedings and did not object to the same. The Appellant submits that in an email authored by one, Israel Murefu (who is part of the board) dated 21 April, 2021 (copy attached as Annexure “C”) he acknowledged, on behalf of the Board, being aware of the matter and directed the proper channel, for the purpose of Statutory Instrument 15 of 2006 to be complied with by the Respondent. Appellant further submits that an interpretation of Clause 8.16 shows that all that is required is that before disciplinary proceedings are instituted, there shall be either an approval or consultation of the Board. There is no requirement that a resolution has to be issued out by the Board pursuant to the consultation. It is submitted that the mischief that Clause 8.16 sought to remedy is that the Board should be aware of the proceedings and object to the same if there is need to. In this case the Board were aware of such proceedings and had raised no objection as such.

The Appellant has extended its argument to submit that even if there was a procedural irregularity in this case, the law is settled, in any event, that not all procedural irregularities are sufficient to vitiate disciplinary proceedings, a party has to necessarily establish prejudice suffered as a result of the irregularity. The Appellant has referred the court to **Tichawana Nyahuma** vs. **Barclays Bank (Pvt) Ltd** SC 67/05. The Appellant contends that in the absence of any such allegation by the Respondent that he suffered any reasonable prejudice the point of law must therefore be dismissed.

The Appellant also made reference to **ZESA** vs. **DERA** 1998 (1) ZLR (S) on the basis that the Respondent has failed to establish, on a balance of probabilities, that there was a need to consult the Board before commencement of proceedings. The Appellant submits everything done was above board. On this basis the Appellant prayer is that the point be dismissed as it is clearly without merit.

**THE LAW AS APPLIED TO THE FACTS**


In Hoffman and Zeffert SA Law of evidence 4th Edition at page 528 the author states categorically; “There are no exceptions to the rule that all issues in civil action are decided upon a preponderance of probabilities.” It is the accepted position that labour matters being in the nature of civil cases the rule also applies in such cases. Indeed the Respondent referred to one of the leading authorities on the subject in relation to labour matters i.e. Zesa vs Dera 1998(1) ZLR500(s) where the principle was laid that when it comes to the issue of burden of proof in disciplinary hearing the employer in proving an employee has committed an act of misconduct, the employer must prove his case on a balance of probabilities.

There is, in casu, a dispute between the parties as to whether clause 8.1.6 of the guidelines is applicable to Respondent. Appellant contends the clause is not applicable to Respondent and Respondent has failed to discharge the onus on him to prove the clause is indeed applicable to him. The Respondent on the other hand contends that the clause is indeed applicable to him. Clause 8.1.6 of the Guidelines provides as follows;

“8.16 The appointment, performance assessment, remuneration, disciplinary and dismissal of the head of each control function (other than the head of the internal audit function) shall be done with the approval of, or after consultation with the board or relevant board committee”

The court faced with the mutually exclusive positions as taken by the parties has to necessarily weigh each of those submissions and the evidence as tendered to determine this point. The main issue in dispute is whether the Respondent occupied a position as a head of control function. The dispute has arisen as there is no definition under the guidelines as to who is considered to be a “head of control function” as outlined under clause 8.1.6. the Respondent submission is that before his appointment to the position of Risk and Compliance Manager on 1 November 2020 he was on 6 October 2020 advised via email by the Chief Executive Officer that the CIPF had a new post of Risk and Compliance Manager on its establishment which was created following the of IPEC guidelines and that the post was approved by the Fund. In addition he was informed that management was recommending to the Board that he should be reassigned to the position from his current role as Internal Auditor. It was therefore clear that the position of the Risk and Compliance Manager was created in terms of IPEC guidelines. The position also forms part of the key personnel.

Under section 7 of paragraph (g) on page 9 of the guidelines the Board of the Pension Fund is responsible for ensuring that key personnel of the entry are appointed and is required to notify IPEC within seven (7) days of appointment of key personnel.
 The respondent further submitted under paragraph 2.10 of his heads that he was indeed requested to submit finger prints and filled in a Form. This information was intended to be forwarded to IPEC in order to notify it of his appointment as the Risk and Compliance Manager in compliance with the requirements of section 7 paragraph (g) of the IPEC guidelines. The Respondent submits that IPEC must have responded directly to Appellant as he was later appointed to the position.

The Appellant position on the other hand is that there would have been no need to refer the matter of disciplining Respondent to the Board. This was in view of the fact that the guidelines provide for what are called control functions in terms of clause 8.1 as read with clause 8.2 which are the Risk management function, Compliance function, Internal Audit function and that all three functions have employees who can be managerial or non-managerial. It is Appellant submission that Respondent was on the basis of the contract of employment not engaged as a “head of a control function” but was employed as an ordinary employee in the control function; the guidelines do not themselves carry a definition of a head of control function; the Respondent has thus failed to place anything before the court to show he was engaged as a head of control function and therefore clause 8.1.6 is not applicable to him.

The dispute has ensued between the parties clearly out of the lack of clarity in the guidelines as to the definition of head of control function. The provisions in clause 8.15 and 8.16 provide for the appointment of a “head of control function” for each respective control function. There is however no definition of what a “head of control function” is. The Appellant submits the Respondent cannot associate with that title as it is not referred to in the contract of employment. The Respondent is missing the point that if Respondent is able to establish that he is one of the key people provided for under the guidelines then the guidelines also form part of his conditions of employment.

In regards that issue the Appellant does not dispute that the position was created in terms of the IPEC guidelines, appellant does not dispute the position is part of key personnel referred to in section1 of the guidelines. Appellant also does not dispute guidelines apply to it as one of self-administered funds. It is thus required to comply with guidelines. More importantly Appellant does not dispute Respondent submission that his appointment to the position was referred to the Board and that this was in compliance with clause 8.15 and 8.16 of the guidelines.

On the basis of the facts in casu it is clear that indeed the Appellant ought to have sought and obtained approval after consultation with the Board before instituting disciplinary procedures. The Appellant does not dispute having approached the Board when it wanted to appoint the Respondent. The Appellant ought to have also sought and obtained approval after consultation with the Board before disciplining him. It is clear that the IPEC guidelines are supposed to be a standard adopted by Insurance Pension Commission (IPEC) to govern management and corporate governance practices by pension funds and pension administrations. The members agreed under Section 8.16 that the appointment, performance assessment, remuneration, disciplinary and dismissal of head of each contract function shall be done with consultation with the Board. No reason has been placed before the court to justify why the Appellant believed it would be proper for it to comply with only one component of the Section 8.16 i.e. upon appointment of respondent but not when it came to disciplining him. The fact that Respondent was required to provide documents for onward transmission to the Board before his appointment is clear testimony that his appointment was viewed as appointment of a key personnel under the provisions of the Guidelines. Otherwise why was it seen fit to fulfil that obligation if respondent was regarded as an ordinary employee in a control function as Appellant would want to now suggest. If Appellant saw it fit to refer to the Board the issue of appointment then it certainly means that the Appellant also needed to seek approval or consultation with the Board to initiate disciplinary measures. All the other arguments that Appellants has sought to place before this court, such as that he was only an employee in a control function and he was not attending board meetings, etc do not hold water in view of the above position. The Respondent has clearly discharged the onus on him to prove he was a head of control function, on a balance of probabilities.

The Appellant had further argued that the Board in any event was consulted and even commented on the issue. That point clearly stands to be dismissed. It is clear that in the email attached as ‘Annexure C’ to Appellant heads, Mr Israel Marufu, whose designation in relation to the Board is not apparent from the email, is only acknowledging being aware of the appeal noted by the Respondent. His advice is that this is an administrative matter which does not fall under the Board or Chairman. He is redirecting Respondent to note his appeal to his immediate superior and employer under the provisions of S.I. 15 of 2006. The employer should then set up an appeal tribunal or authority to hear the appeal.

What is most telling is that there is no reference to the issue that the Board sat on a specific date to approve, after consultation, the instigation of disciplinary proceedings against the Respondent as a key personnel. As for the issue of a Board resolution it is common practice for a board resolution to be issued by a board when the board sits to determine critical issues as placed before it. One cannot conclude by a mere reading of Mr Marufu’s email that the Board in this case actually sat to determine the issue and there was no notable objection to the institution of disciplinary proceedings. Clearly there was need for a resolution to be issued pursuant to the consultation.

The last issue raised by Appellant is that this procedural irregularity is not sufficient to vitiate the disciplinary proceedings as no prejudice has been established/proved before the court. The Appellant is placing reliance on the settled law that not all procedural irregularities are sufficient to vitiate disciplinary proceedings, a party so raising the irregularity has to necessarily establish prejudice suffered as a result of the irregularity. See **Tichawana Nyahuma vs Barclays Bank (pvt) (ltd) SC67/05**. The circumstances in this case are clearly different from those in **Tichawana Nyahuma** vs. **Barclays Bank**. In this case the Appellant clearly breached a statutory requirement that has to be fulfilled before instituting disciplinary proceedings. The issue of prejudice clearly does not arise in such circumstances. In the circumstances it is clear that the Appellant by instituting disciplinary proceeding in breach of **Clause 8.1.6**. of the applicable guidelines for the Pension Industry, the disciplinary proceedings convened were fatally irregular. It must follow that those proceedings must be set aside.

In the result it is ordered as follows;

(a) the point of law as taken by the respondent is upheld.
(b) the cross-appeal is consequently upheld with costs.
(c) the disciplinary proceedings convened by the Appellant being fatally irregular, they be and are hereby set aside.
(d) the appeal falls away as a result.
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