Desmond Chakuvinga & 2 Ors v Roger Moore (Private) Limited

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/707/2014
HARARE, 21 JULY 2014
CASE NO
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IN THE LABOUR COURT OF ZIMBABWE	JUDGMENT NO LC/H/707/2014

HARARE, 21 JULY 2014 &			        CASE NO LC/H/1014/2013

24 OCTOBER 2014

In the matter between:

DESMOND CHAKUINGA						1ST APPELLANT

And

WILLIAM KUCHEZA						2ND APPELLANT

And

DAVIS CHIPEMVU						3RD APPELLANT

Versus

ROGER MOORE (PRIVATE) LIMITED			RESPONDENT

Before Manyangadze J

For the Appellants	B Makururu	(Legal Practitioner)

For the Respondent	T K Hove  (Legal Practitioner)

MANYANGADZE J:

This is an appeal against an arbitral award issued by Honourable K M Nhongo on 5 December 2013. The award ruled that the	 appellants were not entitled to the retrenchment package they were seeking, which package was in terms of a determination made by the Minister of Labour and Social Welfare (“the Minister”). The arbitral award ruled that the appellants were, instead, entitled to a retrenchment package in terms of an agreement they had entered into with the respondent, prior to the Minister’s determination.

The history of the matter is as follows:

The appellants were employed by the respondent in various capacities. Sometime in 2011 the respondent embarked on a retrenchment exercise. In the negotiations that ensued, an agreement was reached on what the employees were to be paid. Apparently, the agreement was not implemented due to some sticking points. The matter went to the National Employment Council for the Engineering Workers Union and Steel Industry (“NEC”). No agreement was reached.

On 28 September 2011, the matter was referred to the Minister for determination. The Minister issued his determination on 26 January 2012.

The respondent appealed against the determination by the Minister to this court. The appeal was dismissed.

When the respondent failed to implement the determination of the Minister, the appellants referred the matter to a Labour Officer. When conciliation failed, the matter went for compulsory arbitration, resulting in the arbitral award which is being contested in this appeal.

The appellants’ grounds of appeal are framed as follows:

“1	The honourable arbitrator erred in failing to note that the decision of the Retrenchment Board was and still is binding upon the respondent.

2.	In holding that the respondent was unable to pay the amount ordered by the Minister, the honourable arbitrator was in effect, reviewing the determination of the Minister and yet he had no authority to do so and was also not called upon to do so.

3.The honourable arbitrator grossly erred in holding that the payment of notice pay does not apply in retrenchment cases.

4.	The honourable arbitrator grossly erred in holding that the respondent had officially closed when no evidence was ever led to prove that the respondent was no longer in existence. In actual fact, the respondent is fully operational.

5.	The honourable arbitrator erred in failing to note that where termination is at the instance of the employer as in casu, notice pay is payable in terms of section 12 (7).

6.	The honourable arbitrator grossly erred in holding that the issue of back pay should have been dealt with at a time it occurred when it is trite that an employee is paid his salaries and benefits from the date of last payment to the date the order of retrenchment is made.

7.	The honourable arbitrator grossly erred in refusing to entertain the issue of back pay when such a claim is part of the retrenchment package and yet not yet prescribed.

8.	The honourable arbitrator grossly erred in refusing to entertain the issue of leave pay on the basis that it would have been part of what the respondent had offered prior to the matter being referred to the Minister when leave is actually part of the statutory benefits which the Minister ordered to be paid.

9.	The honourable arbitrator erred in holding that the agreement between the parties was of force and effect when the very same parties had resiled from their agreement and agreed to refer the matter to the employment council and ultimately to the Retrenchment Board.

10.	The honourable arbitrator grossly erred in reviewing the determination of the Minister when he had no authority to do so and was not called upon to do so.

11.	The honourable arbitrator erred in failing to note that he was called upon to decide whether or not the amount claimed by the applicants was in line with what the Retrenchment Board had ordered.”

It seems to me this case turns on the first two grounds of appeal. Grounds 1 and 2 basically relate to the same issue. This is the issue of whether or not the determination of the Retrenchment Board, as approved by the Minister, is the one that binds the respondent. It means the retrenchment has to be carried out in terms of the Minister’s determination.

If, for some reason, the Minister’s determination is not valid and binding on the respondent company, the retrenchment would be carried out in accordance with the agreement the respondent allegedly entered into with the appellants.

On the validity of the Minister’s determination or the Retrenchment Board determination, the court order issued by this court under case number LC/H/65/12 is instructive. The respondent had sought to appeal against the Retrenchment Board’s decision. MHURI J issued an order on 13 June 2013 as follows:

“IT IS ORDERED THAT:

The notice of appeal being fatally detective and there being no provision for appeals against the Retrenchment Board’s decision, the ‘appeal’ be and is hereby struck off the roll with costs.”

The order is self-explanatory. It is clear that the action taken by the respondent was not competent, hence its being struck off. What this means is that the Minister’s determination is still valid. Any order by an arbitrator that purports to set it aside would be invalid. That is what the arbitral award in casu purported to do.  The following excerpts from the arbitral award clearly show this:

“Pages 5 – 6 of the arbitral award:

“The question that I must answer is “whether or not the claimaints are entitled to the quantum of the retrenchment package they are seeking. The answer to this question has to be in the negative. That the respondent was unable to pay the amounts ordered by the Minister was obvious, bearing in mind that it had gone out of business on 29 July, 2011.

With no revenue from its business, it was difficult to imagine how it could have raised the onerous amounts that the Minister had determined. I have not been furnished with the reasons why the Labour Court turned down the respondent’s appeal. It occurs to me, though, based on its submissions to me, that the issues raised by the respondent were pertinent and reasonable.”

Page 7 of arbitral award:

“I do not agree that what the parties agreed and signed for before going to the Minister was of no force or effect. The Minister, it seems to me, had no right to interfere with the agreement entered into between the respondent and his employees, bearing in mind the circumstances prevailing in their work situation.”

Page 8 of arbitral award:

“By imposing higher amounts than had been agreed by the parties, the Minister lost sight of the reality of the situation in which the respondent found itself, the closure of its operations.”

Page 9 of the arbitral award:

“In this case, the company closed down and could not be saved. What, then was the Minister seeking to achieve by placing an extra financial burden on the respondent? Clearly, he was out of touch with reality.”

After making these remarks, the arbitrator then went on to rule that the appellants were not entitled to the quantum of the retrenchment package they were seeking. What the claimants were seeking was in terms of the Minister’s determination. They were in fact seeking to implement the Minister’s determination. They made their calculations based on that determination. The arbitrator effectively substituted that determination with the alleged agreement made prior to that determination. I say alleged agreement because it is an issue in contention whether that agreement was still subsisting at the time the parties went to the Retrenchment Board. It is not clear, from the record, whether the Retrenchment Board was informed that the parties had in fact agreed, and it went ahead with its determination regardless of the said agreement.

Much has been said, on behalf of the respondent, about the binding nature of contractual agreements. Supplementary Heads of Argument were even submitted, elaborating that legal point.  It seems to me counsel for the appellants did not raise an issue on the correctness of the legal principles that uphold the sanctity of contracts.

The averments on the sanctity of contractual agreements the appellants allegedly entered into with the respondent, were, in my view, misplaced. The issue is that the Minister made a determination, duly exercising his powers in terms of section 12 C (9) of the Labour Act, [Cap 28:01]. It is not a question of whether or not the Minister was correct in his determination of the retrenchment package. It is not whether or not the Minister correctly applied the principles governing contractual agreements in his approach to the retrenchment dispute.

The pertinent issue, in my view, is whether the arbitrator could set aside that ministerial determination. As clearly seen from his award, that is what he did. He had no power to do so. This was a matter were the appellants were simply seeking quantification, pursuant to the ministerial determination.

If the respondent was aggrieved by the Minister’s determination, he should have filed an application for review in the appropriate forum. He filed an appeal, which was struck off the roll as it was a wrong procedure. In the absence of it being set aside or varied through a proper review procedure, the Minister’s determination remains valid.

The arbitrator misdirected himself by purporting to set aside or vary the Minister’s determination. On this basis alone, the appeal must succeed.

It is accordingly ordered that:

The appeal be and is hereby allowed with costs.

The arbitral award issued by Honourable K M Nhongo on 5 December 2013 be and is hereby set aside.

Musoni Law Chambers, appellants’ legal practitioners

T K Hove & Partners, respondent’s legal practitioners