Ilford Services (Pvt) Ltd v Richard Adhaki

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT
NO LC/H/280/16
HELD AT HARARE 30 MARCH 2016
CASE NO
JUDGMENT NO LC/H/280/16
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IN THE LABOUR COURT OF ZIMBABWE			JUDGMENT NO LC/H/280/16

HELD AT HARARE 30 MARCH 2016				CASE NO LC/H/659/15

& 6 MAY 2016

In the matter between:

ILFORD SERVICES (PVT) LTD				Appellant

And

RICHARD ADHAKI					Respondent

Before The Honourable P Muzofa, Judge

For Appellant			I Musimbe (Legal Practitioner)

For Respondent		B Magogo (Legal Practitioner)

MUZOFA, J:

The appellant appeals against the decision of an arbitrator which ordered that appellant pay salaries to the respondent for the period January 2014 to 27 August 2014.

The background facts to this case are not in dispute and succinctly set out by the appellant.  As at December 2013 the respondent who was sick had exhausted his sick leave on full and half pay as provided by section 14 (4) of the Labour Act.  The appellant did not terminate the contract but waited for the outcome of respondent’s application in terms of the Pneumoconiosis Act [Chapter 15:08] and his application to the pension funds for early retirement on medical grounds.  The application in terms of the Pneumoconiosis Act was directed to the National Social Security Authority.  It was rejected.

After this appellant terminated the contract in terms of section 14 (4) of the Act on 27 August 2014.

After the expiration of the ninety days sick leave on half salary, the appellant did not terminate the contract of employment but did not pay any salaries and benefits to the respondent.

The respondent was dissatisfied by the decision and referred the matter to a Labour Officer.  Eventually the matter was referred to an arbitrator.

The arbitrator made a finding that the appellant’s decision not to terminate the contract meant respondent was entitled to his salaries and benefits for the period he was an employee.

The only issue for determination on appeal before this court is whether the employer having failed to terminate the contract of employment at the expiration of 180 days on full and half salary the employer was bound to pay full salary and benefits to the respondent.  It brings to the fore the interpretation of section 14 (4) of the Act.

For the appellant it was submitted that section 14 (4) of the Act regulates the remuneration of an employee on sick leave.  When the sick leave is exhausted the payment of salaries and benefits also ceases.  According to the appellant the payment of salaries and the discretion of the employer are separate issues.  The court was referred to the case of Zimasco (Pvt) Ltd v Marikano SC 6/14 which sets out what section 14 (4) entails.

For the respondent it was argued that section 14 (4) of the Act gives an employer a discretion to terminate or not to terminate a contract where sick leave has been exhausted.  Where the employer decides not to terminate the contract, the employee reverts to the normal employee position on full salary and benefits.

Further to that it was argued that S 13 (1) of the Act is applicable in that respondent was incapacitated and therefore entitled to his wages and benefits.  Respondent distinguished the Zimasco case (supra) in that it did not deal with circumstances such as the one before the court.

Section 14 (4) of the Act provides

“If, during any one year period of service, the period or aggregate periods of sick lea exceed-

Ninety days’ sick leave on full pay; or

Subject to subsection (3) one hundred and eighty days’ sick leave on full and half pay;

The employer may terminate the employment of the employee concerned.”

That section as set out in the Zimasco case supra only provides for the period a sick employee can be paid, while on sick leave and when the right to terminate the contract of employment arises.  I agree with the respondent the Zimasco case is distinguishable from the case, it does not speak to the issues in this case.

Section 14 (4) of the Act gives an employer a discretion to either terminate the contract of employment or not hence the use of the word ‘may’.  In my view that discretion means where the employer decides to terminate it follows naturally that no salaries and benefits accrue to the concerned employee.  The reverse is true where the contract is not terminated the contract remains valid and the attendant obligations.

Appellant was alive to the discretion that it had.  This is clear from the letter written to respondent’s legal practitioners dated 5 February 2014.

In that letter appellant advised respondent that he had exhausted his sick leave days and it was entitled to terminate the contract of employment.  It also advised respondent that the application for retirement on medical grounds made by respondent was being considered by NSSA.  However appellant did not terminate the contract.

It was submitted for the appellant that it was being lenient with respondent.  For to terminate his contract in the absence of the outcome from NSSA and the pension funds would have been inhuman.  Further it was submitted that the employer was being punished for being humane.

That argument does not help the appellant.  The net effect of its decision was that even if it did not terminate the contract the employee remained with no salary.  So what benefit did accrue to the employee as a result of the human face?  Nothing.

The application to NSSA and the pension fund had nothing to do with the appellant.  In terms of the law the appellant was at liberty to terminate on notice as stated in the Zimasco case.  The processes were independent of each other.  The basis raised by appellant not to terminate cannot assist it.

I agree with the arbitrator, the appellant exercised its discretion in the case.  It did not terminate the contract therefore it should pay the salaries and benefits for the period in question.  Appellant was aware that respondent was still unfit for duty so it must be taken that it exercised its discretion from an informed basis.

Respondent also referred the court to section 13 (1) of the Act that respondent was entitled to his salary since he was incapacitated.  I do not believe these sections speak to  each other Section 14 as a whole relates to sick leave and section 14 (4) addresses the remuneration and period within which a sick employee can be paid before an employer may terminate the contract.

If appellant intended to retain the respondent on employment without salary until the aside processes were finished the respondent could have utilised the provision of section 14 (5) of the Act.  That subsection gives the employee an option that is use his vacation leave as sick leave on half salary or without pay.  In my view this would have been borne out of some agreement.

From the foregoing the appeal has no merit accordingly the following order is made

The appeal be and is hereby dismissed.

IEG Musimbe & Partners, appellant’s legal practitioners

Makuwaza & Magogo Attorneys, respondent’s legal practitioners