Delta Beverages (Pvt) Ltd v Kudakwashe Murandu

IN THE LABOUR COURT OF ZIMBABWE              JUDGMENT NO. LC/H/126/2013

Held at Harare on 14th February 2013              CASENO.LC/H/253 /2012

In the matter between



DELTA BEVERAGES (PVT) LTD                     -      Appellant



And



KUDAKWASHE MURANDU                                     -   Respondent



Before The Honourable L. Kudya, President

For Appellant        : Mr G.Chingoma(Legal Practitioner)

For Respondent       : Mr S. Kampira (Legal Practitioner)



KUDYA, L


      This is an appeal against the arbitrator’s quantification of damages award

made in favour of the Respondent against the Appellant Company. The

arbitrator ordered that the Respondent be paid damages in place of

reinstatement and back pay in foreign currency following his dismissal by the

Appellant Company.



      The Appellant argues that, it was irregular for the arbitrator to make an

award in foreign currency yet the claim had arisen during the Zimbabwe dollar

era. It also argues that some of the findings of fact made by the arbitrator were

grossly unreasonable that his award cannot be made to stand.




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      The facts of the matter are as follows: On 2 nd August 2000 Respondent

who was in the Appellant’s employ was suspended from work for certain

misconduct allegations pending the determination of an application by the

Appellant to dismiss him. The Labour officer ordered the reinstatement of the

Respondent. A dispute



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then arose over the payment of damages. The damages claim was heard by the

arbitrator who ordered that the Respondent be paid damages in lieu of

reinstatement and back pay from the date of his suspension to the date when

the Labour officer reinstated him. Aggrieved by the arbitral award, the

Appellant appealed to this court seeking that this court set aside the arbitral

award.



The basic grounds of appeal by the Appellant in summary form are the

following:



      1. Arbitrator erred at law by awarding back pay in United States Dollars

      when the period covered by the same fell under the Zimbabwe dollar era.

      2. The arbitrator grossly misdirected himself by converting the

      Respondent arrear salary on the basis of the Reserve Bank of Zimbabwe

      exchange rates prevailing at the time of the claim without calling for

      further evidence from the parties on this point.

      3. The arbitrator grossly misdirected himself by ruling that Respondent

      required 3 years to secure alternative employment because of his health

      age and qualifications yet no evidence was led to that effect. To the

      contrary the Respondent had indicated that he would require 3 months

      to secure alternative employment.

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      4. The arbitrator grossly misdirected himself on the facts when he

      ordered that damages be paid at the rate of US552. 68 dollars per month

      which is the convertible equivalent of the Zimbabwe dollar amount which

      Respondent used to earn yet the Respondent had indicated that his

      entitlement was US300 dollars per month.

      5. Arbitrator erred in awarding damages in lieu of reinstatement in

      foreign currency instead of Zimbabwe dollars which were applicable at

      the time of the cause of the action.



      On the other hand, the Respondent maintains that the appeal is without

merit and is calculated to frustrate him and delay the matters only. He

maintains in particular that, there was no misdirection at law on the part of the

arbitrator as

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alleged by the Appellant. He argues that, an award sounding in the

Zimbabwean dollar currency would amount to a brutum fulmen by the arbitrator

given the fact that the Zimbabwean dollar has now been rendered valueless

and the subsisting currency is the foreign currency.



      He argues further that, all the factual findings which the Appellant claims

were irrational thus constituting a point of law were not at all irrational as

alleged. He maintains that he provided the salary scale which was used by the

arbitrator and the exchange rate which was applicable at the relevant time.



      He also says, he offered himself for employment with the Appellant but

the Appellant turned down that offer hence the period of 3 years which was

used by the arbitrator as constituting a reasonable period for him to secure

alternative employment was therefore not unreasonable. This is so especially in


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today’s age of rampant unemployment. He in summary argues that, the

arbitrator correctly exercised his discretion in arriving at the award which he

made. He applied his mind appropriately to the facts which were before him. In

the result, the Respondent prays that the appeal be dismissed with costs.



      Appeal grounds one and five deal with essentially the same issue that is,

the issues of the competency of awards sounding in foreign currency for causes

of action which arose during the Zimbabwe dollar era. The two grounds will

therefore be combined for purposes of this judgment.



      The law in this respect is settled to the extent that the Supreme Court has

ruled that, it is competent for the courts to make awards sounding in foreign

currency. The only aspect which has not had a definitive ruling by the Supreme

Court is what the position is with particular reference to employment matters.

At the time of this judgment the only definitive case authority on employment

matters which the court has been able to lay hands on is the case of Gift Bob

David Samanyau and 38 others vs Fleximail Ltd HH108/11

                                                      JUDGMENT NO. LC/H/126/2013

       The Supreme Court stated the following in the case of Terence                         Alan

Blake and Another vs Tabs Avon Lighting Pvt Ltd SC 13/ 10


      “it is competent for courts in an appropriate case to grant judgment in foreign currency ,
      the plaintiff must plead sufficient facts to lay foundation necessary to prove its entitlement

      to judgment in United States Dollars” per Ziyambi JA



      Further to that, the same learned Judge sitting in chambers also had this

to say in the case of in the case of Roni Masekesa vs Kingdom Financial

Holdings SC 18 / 12



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        “----------- the point to be made here is that dismissal took place in February 2004 and that
        no basis has been laid in the proposed notice and grounds of appeal which would justify a
        grant of this order by an appeal court “


        In the Masekesa case (supra) the court was commenting on whether an

award in foreign currency in an employment case which arose during the

Zimbabwe dollar era could be said to be in order.



        The above judgments demonstrate that there is nothing irregular in the

adjudicating bodies making orders sounding in foreign currency for claims

which arose during the Zimbabwe dollar era.



        The critical question is whether the party seeking such relief has pleaded

or made out clearly that he or she is entitled to relief in the currency in

question. The court is not persuaded by the Appellant’s argument that the

Masekesa judgment is authority for the proposition that there is no legal basis

on which a court can order payment of damages in foreign currency for a claim

which arose during the Zimbabwe dollar era.



        In fact, the case is quite categorical that what lacked in the facts before it

were facts or pleadings showing that the Applicant should have obtained an

award

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sounding in foreign currency. In essence, what the court meant is that, if the

Applicant before it had pleaded enough facts to show that he should have

gotten such an award in forex the court would not have hesitated to grant it.



        It need also be noted that, even from the High Court decisions cited by

the parties in the instant case the position is the same that, it is legally

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permissible to make an award in foreign currency but there is need to lay the

foundation for such an award.



      Applying this principle to the facts of the instant case, the critical

question is whether or not before the arbitrator made the award there were

sufficient facts which had been placed before him by the Respondent to justify

his granting of the award sounding in foreign currency. If the answer to that is

in the affirmative then, that puts the propriety or otherwise of the arbitral

award in this respect to rest.



      It is worth noting that, the basis upon which the arbitrator was asked to

make an award sounding in foreign currency was that, if he made an award in

Zimbabwe dollars that would be tantamount to coming up with a brutum fulmen.

This, in the court’s view was, sufficient ground to ask the arbitrator to make an

award sounding in forex as opposed to the Zimbabwe dollar.



      It is a clear point of law that the courts shall not be called upon to make

brutum fulmen orders and the Respondent did not have to specifically plead that

point as it is a clear point of law. The court is therefore satisfied that the

Respondent by raising that argument did lay before the arbitrator sufficient

grounds upon which the arbitrator had to make an award sounding in foreign

currency. The court is therefore satisfied that there was no error of law which

the arbitrator fell into in respect of these two grounds of appeal.



      The Appellant argued on the same point that the Samanyau case (Supra)

together with a number of others case is subject of appeal at the Supreme

Court on

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the definitive perspective as regards employment contracts. This does not in

any way detract from the fact that, the facts of the case at hand show that there

was a proper legal basis upon which the arbitrator was asked to exercise his

powers. The court therefore finds no fault with that exercise of power.



      This court is fortified in its view by the wise words of Makarau JP as she

then was in the case of Kwindima Fabiola vs Mvundura Louis H H25/09

where she stated the following:


       “------where there is no statutory bar, the courts can award judgments in foreign currency.
      For damages, the plaintiff must prove that his or her loss was suffered in foreign currency or
      put in the language of Leon J in the Elgin Brown case, the plaintiff must prove that he or she
      felt the loss in a foreign currency”


      “It appears to me that the issue I have to determine is whether to extend the approach
      that has been taken in the Makwindi case and be innovative enough to suggest that where
      a loss has been suffered and can be calculated in both the local and in foreign currency ,
      the court has a discretion to award judgment in that currency that will redress the injury
      suffered and adequately compensate the plaintiff for the loss. It would then follow that
      where that currency is the foreign currency as opposed to the local currency , then judgment
      should be in the foreign currency for to award damages in the local currency , where the
      currency has been rendered valueless by inflation might be to deny the plaintiff the redress
      he or she seeks . I must confess that I find this approach attractive. It is not in violation of any
      statutory provision governing exchange control-----------------It is simply an act of applying
      the approach to a situation that has arisen due to ravages of inflation and one that could not
      have been anticipated”



      It is clear from the learned Judge’s reasoning above that, if the award is

to be made in the Zimbabwean currency it is tantamount to denying the party

seeking relief such. This court is satisfied that there is no basis to interfere with

the arbitrator’s award on the basis of appeal grounds one and five. The two

grounds should therefore accordingly fail.


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                                               JUDGMENT NO. LC/H/126/2013

      Grounds 2 to 4 are basically factual grounds which in the ordinary course

of things would not qualify as grounds of appeal against an arbitral award. They

have however been prefixed with the phrase gross misdirection tantamount

to a misdirection at law for them to qualify as grounds of appeal on the facts

against an arbitral award.



      The Appellant argues that the arbitrator grossly misdirected himself on

the facts on the three quoted grounds to the extent that his error was an error

at law which justifies the setting aside of his award.



      The major argument advanced in this respect is that all the factual

findings complained of were not backed by evidence. To that extent they were

irregular and vitiated the award in question. It quoted the case of Ruturi vs

Heritage Clothing 1994(2) ZLR 374 (S) where Gubbay CJ (as he then was)

remitted a matter to the lower tribunal for the leading of evidence on the issue

which the tribunal had ruled on without evidence having been led on the

particular issues.



      In the case at hand, the arbitrator indicated in his decision that he relied

on the Reserve bank of Zimbabwe exchange rates prevalent at the time of the

claim to justify his award. The question to be answered in this respect is,

whether it can be said that such reliance was irregular and needed further

evidence form the parties concerned.



      It is this court’s view that, the exchange rate form the Reserve bank was

evidence from a professional source and did not need any extrapolation or

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elucidation from the parties. It was either the quoted rate was the rate at the

time in question or it was not. The court fails to appreciate what it was that was

remiss on the arbitrator’s reliance on such rates. The court is therefore satisfied

that there was no misdirection on the rates used by the arbitrator.




                                              JUDGMENT NO. LC/H/126/2013

      As regards the level of mitigation of loss by the Respondent, the

Appellant argues that the arbitrator should have called for evidence on the

aspects of health, qualifications of the Respondent before concluding that 3

years was a reasonable period within which the Respondent should have been

expected to secure alternative employment. It is important to observe that,

even though the record before the court does not show such, the age, health

and professional qualifications of the Respondent would have been placed

before the arbitrator at the pre arbitration hearing by the parties concerned.



      Whilst the Appellant maintains that, the Respondent had indicated at pre-

arbitration that he could have obtained employment within three months the

Respondent contests that in his heads of argument. He maintains that the three

months was in reference to the period of notice not the period within which he

could have obtained alternative employment.



      In the case of Leopard Rock Hotel Company vs Van Beek 2001 (1)ZLR

251 a period of two years was held to be a reasonable period within which the

Respondent in that case should have secured alternative employment. With

respect to the facts in the instant case, the question to be answered is whether

the period of three years was unreasonable to found interference by this court.



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There is no evidence to suggest that indeed the period in question was based

on misdirection. This ground should therefore also fail



      The record of evidence gives credence to the fact that there was no gross

misdirection on the grounds of appeal 2 to 4.



      For all the reasons advanced above, it is clear that the Appellant has

failed to make out a good case for its appeal and it must fail.




                                              JUDGMENT NO. LC/H/126k/2013




It is therefore ordered as follows:



      1. The appeal being without merit be and is hereby dismissed with costs.

      2. The arbitrator’s award is accordingly upheld in its entirety.




L.Kudya ______________________

President

Labour court




Dube Manikai and Hwacha- Appellant’s Legal Practitioners

Dondo and Partners- Respondent’s Legal Practitioners

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