Falcon Security v The Respondent (Name Not Stated)

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/753/16
HARARE 12 SEPTEMBER 2016
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE  	     JUDGMENT NO. LC/H/753/16

HARARE 12 SEPTEMBER 2016			               CASE NO. LC/H/966/15

AND 18 NOVEMBER 2016

In the matter between:-

FALCON SECURITY		Appellant

This is an appeal against an arbitral award per the Honourable D. Munemo dated 23rd September, 2015.  The Appellant seeks to have the award set aside in its entirety.  The appeal is opposed.

Background Facts

Respondent was employed by the Appellant as a security guard.  He was employed from the 7th of February, 2003 to 17th June, 2014 (a period of 11+ years).  Upon termination of employment the Respondent referred a claim for non-payment of terminal benefits to the Designated Agent for the National Employment Council for the Security Industry.  He was claiming for arrear wages from July, 2013 to June, 2014 cash-in-lieu of 90 leave days, gratuity, 24 bars of laundry soap and 12 tins of shoe polish.  When the parties failed to conciliate the matter was referred to compulsory arbitration in terms of Section 93(5) of the Labour Act [Cap 28: 01].

The terms of reference for the Arbitrator were  ’to determine whether the claimant was paid days worked or not and the remedy thereof.’  The parties in February, 2015 both made written submissions to the Arbitrator.  On the 23rd of September, 2015 the Arbitrator handed down an award in which he determined that the Appellant acknowledged owing Respondent cash-in-lieu of 90 days, vacation leave, gratuity and 23 bars of soap and 10 tins of shoe polish.  The Arbitrator also noted that Appellant acknowledged owing in total $3,927.00 to the Respondent.  He, however, found that the Appellant owed Respondent $6,187.48 plus 23 bars of soap and 10 tins of shoe polish.  He thus directed payment of that amount less statutory deductions.  He further directed that payment of the amount was to be in three equal instalments starting 30 days from the date of his award.

Appeal

The Appellant was aggrieved by the award and noted the present appeal.  The Appellant’s submission is that Honourable Arbitrator grossly erred at law on the basis of three grounds:

That he grossly erred at law and misdirected himself in considering facts and issues not covered by the specific terms of reference to arbitration.

That he erred and grossly misdirected himself in failing to take into consideration  submissions made by the Respondent in respect of the loan payment made to the claimant and the payment of salaries through the Respondent’s bank.

That the Arbitrator erred and grossly misdirected himself in failing to take into consideration the statutory deductions made by the Respondent.

The Respondent is opposed to the appeal.  The Respondent’s submission is that the Arbitrator was correct on the assessment of the law and the facts.  He correctly covered in his award the part of the claims that Appellant had acknowledged owing in its statement of response.  He did not stray outside his terms of reference.  The Respondent’ submission is also that the Arbitrator correctly dismissed the issue of a set off claimed by the Appellant which set-off was raised through a claim for loan repayment as no evidence had been placed before him  at that material time.  The Respondent prays that the appeal be dismissed with costs.  I turn to address the grounds of appeal seriatiam.

The Terms of Reference

The first issue taken on appeal is that the Arbitrator erred by considering facts and issues not covered by the specific terms of reference.

It is postion at law that in referring a matter to compulsory arbitration the Labour Officer or the Labour Court shall determine the Arbitrator’s terms of reference after consultation with the parties to the dispute. Section 98(4) of the Labour Act [Cap 28:01] refers.  The section reads:

“(4)	In ordering a dispute to compulsory arbitration, the Labour Court or labour officer, as the case may be, shall determine the arbitrator’s terms of reference after consultation with the parties to the dispute.”

The Appellant is claiming that the Arbitrator in casu  strayed outside his terms of reference which was to determine  ’whether claimant was paid days worked or not and the remedy thereof’ by addressing issues related to claims for leave days, gratuity, soap and shoe polish allocations, which issues were outside the terms of reference.

The submission by the Appellant is clearly misplaced.  A perusal of the record of proceedings will clearly show that when Respondent referred his initial claim to the Labour Officer he was claiming for non-payment of wages from July, 2013 to June 2014, cash-in-lieu of 90 days vacation leave days, 24 bars laundry soap and 12 tins shoe polish.  The Appellant in its statement of response dated 12th February 2015 acknowledged owing Respondent cash-in-lieu of 90 days vacation leave, gratuity, 23 bars of laundry soap and 11 tins of shoe polish.  Having acknowledged owing part of claim it is very clear therefore that the issue that was then referred for compulsory arbitration was the outstanding issue as to whether Respondent had been paid wages for the period.  The record shows that the issue arose following Appellant’s submission that it had paid Respondent through his bank account.  Because however Respondent was contesting the submission the matter had to therefore be referred for compulsory arbitration.

In the circumstances the Arbitrator clearly did not err or misdirect himself in addressing in his award the issues of leave days, gratuity, laundry and shoe polish allocation which issues were conceded to by the Appellant.  It would have constituted a misdirection had he left them out as the issues were issues referred to conciliation by the Respondent.  I would consequently dismiss the first ground of appeal.

The Loan

The second ground taken by the Appellant is that the Arbitrator grossly erred in failing to take into consideration Appellant’s submission and evidence tendered in respect of a loan that had been advanced to the Respondent which had to be set off against whatever payments were due to the Respondent.  The second part of the argument is that the Arbitrator also failed to consider evidence submitted through the Respondent’s bank to show payment of salaries made to Respondent’s account.

The ground of appeal is also clearly devoid of merit.  The record shows that the parties  made written submissions to the Arbitrator on the 12th February 2015.  By its own admission Appellant’s  General Manager who was privy to the matter pertaining to the claims by the Respondent was not available then.  The record shows that the Appellant had then filed supplementary submission including some evidence on the 28th September 2015.  The arbitral award itself was issued on the 23rd September 2015.  The facts and circumstances clearly point to the fact that Appellant did not file its submissions/evidence before the Arbitrator on time.  The Arbitrator could not have taken Appellant’s submission into account for the simple reason that the submissions were not before him.  In respect of the second issue pertaining to the loan, the issue that had been presented before the Arbitrator was for him to determine whether Respondent was paid for days worked or not.  The issue of a loan advanced to the Respondent which had to be set off against whatever was due to Respondent was never conciliated upon and/or referred to the Arbitrator.  One cannot contest a claim by raising set-off as a defence.  The issue could have been raised as a counter-claim which was not the case in casu. That ground ought to clearly fail.

Statutory Deductions

The last ground is that the Arbitrator misdirected himself at law in failing in his award to take into account statutory deductions made by the Respondent.  The Appellant’s submission is on the basis of the papers filed in the record it did on the 12th of February, 2015 through its Notice of Response  indicate that Respondent’s gross basic wage was $420.00 including allowances before statutory deductions.  The Appellant also attached wage schedules for the period July 2013 to July 2014 reflecting Respondent’s remuneration for the period after statutory deductions.  The Appellant also indicated the amount owed in gratuity less statutory deductions.

The Arbitrator in his award however found that Appellant owed Respondent a total amount of $6,187.48 “less statutory deductions.”  The Appellant’s submission is Arbitrator ought to have calculated and deducted the statutory obligations as referred by Appellant, as these are normally deducted by the employer at source. The Appellant relied on its submissions made on page 28 of the record and also on written submissions dated 12th of February 2015.  The latter submissions were according to Appellant filed in the absence of the relevant officials from the company.  The Respondent is challenging the basis for the deductions made by the Appellant.  Respondent also challenges that remittances were made by Appellant to statutory bodies such as NSSA as shown in Appellant’s submissions.

The Arbitrator in my view clearly erred in failing to take into account evidence of statutory deductions placed before him dated 12th February, 2003.  If he was not clear as to how and when the deductions were made it was open to him to call for the parties to appear and present evidence.  He could not hand down an award when the issue of deductions had not been addressed. It follows that his award clearly cannot be allowed to stand for that reason alone.  The award has to be set aside and substituted accordingly.  The matter shall in the circumstances be remitted to the same Arbitrator for him to receive evidence on the aspect of statutory deductions only. His substantive findings however remain intact.

In the result the following order is made:

The appeal partially succeeds.

The arbitral award handed down on the 23rd September 2015 is hereby set aside.

The matter is remitted to the same Arbitrator for him to receive evidence on the aspect of statutory deductions to be made to the amount of $6 187.48 awarded to the Respondent and to thereafter arrive at an appropriate award.

There is no order as to costs.

Kantor & Immerman, appellant’s legal practitioners