Kenneth Mvududu v Haltrade Distribution (Private) Limited

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO
HARARE 17 SEPTEMBER, 2025
LC/365/25 CASE NO
LC/H/522/25
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IN THE LABOUR COURT OF ZIMBABWE HARARE 17 SEPTEMBER, 2025

JUDGMENT NO LC/365/25 CASE NO LC/H/522/25

In the matter between: -

KENNETH MVUDUDU	APPLICANT

and

HALTRADE DISTRIBUTION (PRIVATE) LIMITED	RESPONDENT

Before the Honourable Kachambwa Judge Sitting with Honourable Mzyece Judge

For the Applicant	E Kawonde	Legal Practitioner

For the Respondent	T Kabuya	Legal Practitioner

KACHAMBWA, J:

[1] The Applicant has filed the present application for a declaratory order and ancillary relief. The application is opposed. After reading documents filed of record and listening to the submissions made by counsels for both the Applicant and the Respondent, the Court struck the matter off the roll. The reasons for striking the matter off the Roll were explained to the parties. However, the Court has decided to follow that up with a brief judgment.

BACKGROUND FACTS

[2] From the pleadings filed of record and the submissions made by counsels for both the Applicant and Respondent, the following are the facts of the case.

The Applicant is currently employed by the Respondent as its Managing Director and holds 5% of the Respondent’s issued share capital. In 2018, the Applicant signed a five-year fixed term contract with the Respondent for the position of Managing Director. In terms of clause 6.4.1 of the employment

contract, the Applicant is entitled to a motor vehicle benefit- a Mercedes Benz, or an equivalent vehicle within the C-Class range. This clause further provides that the Applicant has an option to purchase the said vehicle at its disposal at net book value upon the expiry of five years, on termination of the contract, or in the event of the Applicant’s death.

[3] The Applicant stated that it was an implied term of the contract that the vehicle issued to him for operational use would be the same vehicle subject to the purchase option. At the commencement of the employment relationship, the applicant was issued with a Mercedes Benz vehicle bearing Registration Number AEL 1404.

[4] The fixed term employment contract between the Applicant and Respondent was signed on 20 April 2018. The five-year period referenced in clause 6.4.1 of the contract was reached on 20 June 2023. On 24 June 2023, the Applicant, through an email communication, informed the major shareholder that he was exercising his option to purchase the vehicle issued to him. In the same communication, the Applicant asserted his entitlement to certain outstanding payments, including bonuses acknowledged by the Respondent. Specifically, in an email dated 21 April 2023, the Respondent acknowledged that the Applicant was owed a total of Eleven Thousand Six Hundred and Twenty- Four United  States  Dollars  and eighty-four cents (USD  11,624.84) in bonuses. On this basis, the Applicant claimed a set-off in the amount of One Thousand Seven Hundred and Seventy-Six United States Dollars (USD 1,776.00), which he said should be deducted from what the Respondent owed him and should go towards the purchase of the vehicle. He alleged that the amount was the net book value of the Mercedes Benz vehicle which had been issued to him. The Respondent refused to give him the motor vehicle.

[5] It was argued that having exercised the option to purchase the aforementioned vehicle and also having instructed the Respondent to set-off the purchase price of the vehicle from the money which he was owed, he is entitled to an order declaring him as the owner of the Mercedes Benz vehicle bearing Registration Number AEL 1404. Hence this application for a declaratory order.

[6] RELIEF SOUGHT

“That on the 24th of June 2024, applicant duly exercised his option to purchase a motor vehicle namely a Mercedes Benz Registration Number AEL 1404 in terms of his contract of employment with the respondent.

That by virtue of the process of set-off communicated to the Respondent on the 20th of June 2024, applicant be and is hereby declared to have paid the book value of the motor vehicle referred to in paragraph 1 above.

That by virtue of having complied with the conditions of his contract regarding the vehicle mentioned in paragraph 1 above, it be declared that as of the 24th of June 2024, applicant became the owner of such a vehicle.

That the respondent shall pay the costs of this application.”

SUBMISSIONS MADE BY THE PARTIES

[7]  The Respondent raised the following points in limine

That the application for a declaratory order was improperly before the court since the Labour Court lacked the requisite jurisdiction to hear and determine applications for a declarator.

That the application was improperly before the court because it was filed without the leave of the court dealing with the liquidation of the Respondent.

7.3.That the answering affidavit filed by the Applicant was improperly before the court because the Labour Court Rules, 2017 do not provide for such a procedure. The answering affidavit filed without the leave of the court ought to be expunged.

DEALING WITH THE PRELIMINARY POINTS IN DETAIL

FIRST;  WHETHER  OR  NOT  THE  APPLICATION  IS  IMPROPERLY BEFORE THE COURT BECAUSE THE LABOUR COURT LACKS THE

REQUISITE	JURISDICTION	TO	HEAR	AND	DETERMINE	AN APPLICATION FOR A DECLARATOR?

[8] The Applicant argued that it is only the High Court which is empowered to hear and determine applications for a declarator by virtue of Section 14 of the High Court Act [Chapter 7:06]. Since the Labour Court is a creature of statute and operates in terms of the powers conferred upon it by the legislature, the Labour Court cannot arrogate to itself powers that it has not been conferred by a statute. In support of this contention the Respondent cited the case of Air Zimbabwe (Private) Limited v Mateko & Ors SC180/20 where the Supreme Court held that the Labour Court has no jurisdiction to issue a declaratory order. Also the case of UZ-UCSF Collaborative Research Programme in Women’s Health v Shamuyarira 2010 (1) ZLR 127 (S)

[9] On the other hand, the Applicant averred that the Labour Court had jurisdiction to issue a declaratory order. He based his argument on the Supreme Court case of T.N. Harlequin Luxaire (Private) Limited v Masvimbo & 14 others SCB 84/22 where the court orbiter dictum intimated that; “there is no doubt in my mind that the Labour Court in its daily  operations does routinely issue declaratory Orders . . . and grant consequential relief.”

[10] The Counsel for the Respondent admitted in Court that the matter was purely a labour matter because it was arising from the contract of employment. He also admitted that the Labour Court had exclusive jurisdiction to hear and determine labour matters. However, he was adamant on the issue of a declaratory order and averred that only the High Court had the statutory jurisdiction to grant declaratory orders in terms of Section 14 of the High Court Act [Chapter 7:06].

[11]The Court having considered the Supreme Court cases which have discussed in depth the issue of the jurisdiction of the Labour Court to issue a declaratory order, is of the view that the earlier Supreme Court judgements that held that the Labour Court did not have jurisdiction to issue declaratory orders appear not to have considered the effects of Section 2A of the Labour Act [Chapter28:01] as read with Section 89(6) thereof. In the latest Supreme Court

judgements, the contentious issue of whether or not the Labour Court has jurisdiction to grant declaratory orders was canvassed extensively in the cases of Nhari v Mugabe & Others SC161/20 and the T.N Harlequin Luxaire (Private) Limited v Masvimbo case (supra). The Supreme Court made it clear that Section 14 of the High Court Act (supra) does not oust the jurisdiction of the Labour Court or any other court to issue declaratory orders. Infact, Section 2A (3) of the Labour Act makes it clear that; “This Act shall prevail over any other enactment inconsistent with it”

It is, therefore, argued that the High Court Act does not expressly excludes or modify the provisions of the Labour Act, in that regard, the Labour Act prevails. Further, Section 89 (6) of the Labour Act makes it clear that; “no court, other than the Labour Court, shall have jurisdiction in the first instance to hear and determine any application, appeal or matter referred to in subsection (1).” This Court is inclined to follow the later decisions of the Supreme Court which have concluded that the labour Court has jurisdiction to issue declaratory orders, albeit in appropriate cases.

[12] The Court, however, raised an issue regarding the propriety of an application for a declaratory order in the circumstances of this case where, in particular, an employee is aggrieved about none payment of contractual benefits. The Applicant’s Counsel was requested by the Court to state the provisions of the Act or any other enactment allowing for such an application to be brought straight to the Labour Court. The Court pointed out to the parties to take note of what the Supreme Court stated in the case of National Railways of Zimbabwe v Zimbabwe Railways Artisans’ Union 2005 (1) ZLR 341 (S) Ziyambi JA said;

“_ _ _ Before an application can be entertained by the Labour Court, it must be satisfied that such an application is in terms of the Act or any other enactment. This necessarily means that the Act or any other enactment must specifically provide for such an application to the Labour Court- for the type that the Applicant seeks to bring.”

[13]The Court also pointed out to the parties to consider the case of Bushu v GMB & Others HH326-17 where it was held that Legal Practitioners are expected to indicate

the Rule or provision of the statute under which the application is being made. The same principle was propounded in the case of Minister of Mines & Mining Development & Anor v Fidelity Printers & Refiners & Anor CCZ 9/22 where the case of Bushu v GMB was cited. Moreover, the case of Isoquant t/a ZIMOCO v Darikwa CCZ6/20 on page 9 and 10 of the cyclostyled judgment of Malaba CJ is instructive on the importance of citing the provisions of the Act or any other statute under which the proceedings before the Labour Court are being brought.

[14]In view of the above cited cases, the Court invited the Applicant to point out the specific sections of the Labour Act or any other enactment which allows for such cause of action and such remedy for that cause of action to be dealt with by way of a declaratory application? The Applicant averred that the application for a declarator was being made in terms of Rule 14 of the Labour Court Rules, 2017. The Rule provides for general applications. So, the Applicant was saying that because there is a Rule providing for applications in general, therefore, a litigant can bring any cause of action by way of a declaratory application straight to the Labour Court. If one has to go by that argument, then it is tantamount to saying that because there is a provision for an application to be made in the Rules, therefore, an employer might as well bring an application for retrenchment straight to the Labour Court, yet, the proper procedure for retrenchment is provided in the Labour Act.

[15] Both the Applicant and the Respondent were in agreement that this dispute was a claim for an outstanding benefit accrued in terms of the fixed term employment contract. It is also not in dispute that failure to pay a benefit which an employee is entitled to in terms of an employment contract constitutes an unfair labour practice as provided for in Section 89 (2) (c) part (i) & (ii) of the Labour Act which reads as follows;

. . . an application made in terms of subparagraph (i) of subsection

(6) of section ninety-three, make an order for any of the following or any other appropriate order— (ii) back pay from the time when the dispute or unfair labour practice in the case of an unfair labour practice involving a failure or delay to pay or grant anything due  to an employee, the payment by the employer concerned to the employee (NB: the underlining is mine for emphasis)

[16] Since the procedure for dealing with such an unfair labour practice is provided for under Section 89 (2) (c) (ii) the Labour Act, the Court is convinced that the Applicant should have exhausted the domestic remedies for resolving an unfair labour dispute first before approaching the Labour Court. In such circumstances, the Labour Court acts as a court of appeal in the event the provisions for resolving workplace disputes fail. If the Court allows for such disputes to be referred to the Labour Court as a court of first instance, the Court risks undermining the domestic remedies provided by the Legislature and thus open flood gates for litigants to come directly to the Labour Court with such applications which can easily be dealt with locally through other alternative dispute resolution mechanisms.

[17]The Court was, therefore, convinced that the application in this instance was improperly before it. Thus even if this Court has the requisite jurisdiction to hear applications for declaratory orders in labour matters, the Court was of the view that it was not proper to do so in this particular application.

SECOND PRELIMINARY POINT WAS THAT THE APPLICATION WAS IMPROPERLY BEFORE THE COURT BECAUSE IT WAS FILED WITHOUT THE LEAVE OF THE COURT. APPLICANT WAS REQUIRED TO APPLY FOR LEAVE OF THE COURT TO SUE A COMPANY UNDER LIQUIDATION.

[18] The Respondent averred that the present application suing the respondent company was improperly before the Court for want of leave to sue a company under liquidation. The Respondent submitted that it had filed an application for liquidation at the High Court under case number HCHC326/25. The Applicant did not dispute that the Respondent indeed had filed such an application which was still pending at the High Court. In addition, the Applicant did not dispute that Section 126 (10(b) of the Insolvency Act [Chapter 6:07] requires leave of the Court to be sought first before suing a company under liquidation. Section 126 reads as follows;

General moratorium on legal proceedings against company

During corporate rescue proceedings, no legal proceeding, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession,

may be commenced or proceeded with in any forum, except— (b) with the leave of the Court and in accordance with any terms the Court considers suitable

[19] The above cited Section of the Insolvency Act is clear and does not call for any other interpretation. However, the issue was when does the moratorium begin to run? The Respondent referred the court to the case of Metallon Gold Zimbabwe (Pvt) ltd & 3 Ors v Shatirwa Investments SC 107/21 where Malaba CJ on page 15 and 16 of the cyclostyled judgment stated that; “the effect of corporate rescue is to  impose a general moratorium on commencing or continuing with legal proceedings. . . the mere filing of the application with the Registrar of the High Court, even before the merits of the application are considered, has the effect of commencing corporate rescue proceedings. The moratorium regarding the suspension of the rights of creditors will, therefore start at this stage.”

[20] The Applicant’s contention, however, was that the application for liquidation filed by the Respondent at the High Court is defective on the face of it. The Applicant averred that the application did not comply with certain provisions of the Insolvency Act (supra). It was Applicant’s contention that because of that, the application before the High Court was a nullity. He submitted that nothing stems out of a nullity. The Applicant urged the Court to ignore the Application for liquidation and proceed with the matter even when there is no leave granted by a court.

[21] On the other hand, the Respondent argued that the merits of the application were not relevant. The mere filing of the application was enough to suspend the proceedings.

[22] After considering the parties’ submissions on that point, the Court was of the view that it was not for the Labour Court to consider the merits or demerits of an application which was pending before another court. As such, the Aplicant’s submission did not hold water. The provisions of the Insolvency Act are clear and mandatory. Also, the case of Metallon Gold Zimbabwe (Pvt) ltd & 3 Ors

v Shatirwa Investments (supra) is instructive. The Applicant should have first sought leave of the Court to sue the Respondent company which has an application for liquidation still pending at the High Court. This point disposes of this application for a declaratory order.

THIRD POINT IN LIMINE WAS THAT THE ANSWERING AFFIDAVIT FILED BY THE APPLICANT WAS IMPROPERLY BEFORE THE COURT BECAUSE THE LABOUR COURT RULES, 2017 DO NOT PROVIDE FOR SUCH A PROCEDURE.

[23] The Respondent submitted that the answering affidavit was improperly before the court because the Labour Court Rules, 2017 do not provide for such a procedure. It was further said that, the answering affidavit filed without the leave of the court ought to be expunged. The Applicant conceded this point.

[24]Since the two points in limine dispose of this application, there is no need to consider the merits thereof. Consequently, the Court decided to have the application struck off the roll. There was nothing to persuade the court from departing from the norm that costs follow the results.

[25]In the result, it is ordered that;

The application for a declaratory order be and is hereby struck off the roll.

The applicant shall bear the respondent’s costs.

KACHAMBWA J……………………………….

MZYECE J ……………………… I agree

KAWONDE LEGAL SERVICES;         APPLICANT’S LEGAL PRACTITIONERS

MATLAW ATTORNEYS;	RESPONDENT’S LEGAL PRACTITIONERS