Kingdom Bank Ltd v Noblame Musamba

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT
NO. LC/H/799/2014
HARARE, 24 SEPTEMBER 2014
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE	 JUDGMENT NO. LC/H/799/2014

HARARE, 24 SEPTEMBER 2014	                         CASE NO. LC/H/998/13

AND 05 DECEMBER 2014

In the matter between

KINGDOM BANK LTD						Appellant

And

NOBLAME MUSAMBA			 			Respondent

Before The Honourable P. Muzofa, Judge

For Appellant	-	Mr. S. Bhebhe (Legal Practitioner)

For Respondent	-	Ms Z. Chirombe (ZIBAWU)

MUZOFA, J:

The Respondent, an employee of the appellant was embroiled in a dispute with his employer.  The Respondent was employed at the Appellant’s Treasury department.

According to the Respondent the appellant had in place a policy providing for long service awards for employees after serving for five (5) years.  After serving five (5) years and having not been awarded the said long service award, Respondent raised a grievance. The Respondent being dissatisfied by the way the grievance was handled by the Appellant Bank the matter was referred to the National Employment Council Appeals Board which made a finding in favour of the Respondent.  The Appellant then noted an appeal to this Court.  The grounds of appeal raise the following issues.

That the NEC Appeal Board erred by making a finding that the 2006 policy document did not supersede the 2005 Policy ‘document’.

Whether the long service award was a discretionary benefit as opposed to a contractual right.

In relation to the first issue, as to which policy document was applicable at the time of raising the grievance.  It was submitted for the appellant that the 2005 policy document was superseded by the 2006 policy document and that the appellant had the right to review its policy document.  It was also submitted that the Appeals Board erred by making a finding based on the failure by appellant to produce certain documents requested by the Appeals Board.  According to the Respondent when he completed his probation in 2008 he was given the 2005 Policy document that provided for the five (5) year award.  The Respondent then attempted to show that the 2005 Policy document was the one operational instead of the 2006 Policy document which was said to be a machination to defeat respondent’s claim.

These are clearly factual findings made at all levels of this dispute.  What is striking though is what transpired before the Appeals Board.  The appellant requested, which request was granted to lead oral evidence before the Appeals Board.  In so doing I believe the appellant intended the Appeals Board to consider the case not only based on previous decisions and evidence but also in light of the oral evidence placed before it.  However the evidence was still to the effect that the 2005 Policy document had been superseded by the 2006 which was applicable to date.  Appellant was asked to show that the 2006 Policy document was authentic.  Consequently the appellant was asked by the Appeals Board to furnish it with the signed Board resolutions adopting the 2006 Policy and the communication to staff of the new Policy.  The appellant failed to produce the said Board resolutions but alleged the computer where the minutes were kept was stolen.  The Appeals Board did not believe this assertion it made a decision that appellant failed to substantiate its allegation.  I am not persuaded by submissions by the appellant that the Appeals Board did not consider the grievance’s committee’s decision outrageous to justify setting it aside.  In my view the Appeals Board’s decision was based purely on the failure by the appellant’s failure to show that the 2006 Policy document was properly adopted by the Appellant’s Board for it to be applicable.  Appellant did not raise issue on whether a Board resolution was required to birth an authentic Policy.  However the Board resolution could not be produced.  It is true an authentic Policy should be superseded by an equally authentic policy.  To imagine otherwise would be dangerous.  An organization like the appellant is expected to have both soft copies and hard copies of Board resolutions and most important a backup system I cannot fault the Appeals Board on this aspect.  Clearly there was no Board resolution adopting the 2006 Policy document.

On the other hand respondent highlighted salient features in the 2005 Policy document that were applicable in the appellant company.  For instance the 2005 Policy document referred to the use of the Patterson job grading system which was in use then.  The 2006 policy document referred to the castelion job grading system which was not in use by then.  The appellant paid acting allowance of 10% which was provided for in the 2005 policy.  The 2006 Policy document was set at 15% of the staff members’ basic salary, and this rate was not being applied.  In my view these instances show that practically on the ground the 2005 Policy document was being applied.  The appellant did not proffer evidence to controvert the said highlights.  So any reasonable staff member would assume the 2005 Policy document was applicable.  It could be that the appellant’s human resource department was not careful in its discharge of its duties, however it’s ineptitude cannot be allowed to prejudice the respondent.  Having regard to the principles applicable in assessing evidence in a civil case set out in Ebrahim v Pittman NO 1995 (1) ZLR 176 (HC) I cannot fault the Appeals Board’s findings.

The second issue raised on appeal is whether the five (5) year award was a contractual right that can be demanded by the employee in this case the respondent.  It was submitted for the appellant that an award is a privilege like a bonus it is not a right.  The award was not a salary.  It is given at the discretion of the employer.  The respondent’s contract that he signed did not specifically refer to the award.  The court was referred to the case of Chairman, Public Service Commission and Others v Zimbabwe Teachers’ Association and Others 1996 (1) ZLR 637 (SC) for the proposition that bonus being payable by Statutory provision can be reduced or eliminated.  The appellant also referred the court to the case of DR C Dhege v Bell Medical Centre HB Solox HB 50/04 for authority that past practice does not transform a privilege into a right and a party cannot be compelled to exercise its discretion in a particular fashion.  For the respondent it was submitted that the policy document uses the word “shall” and therefore the appellant was obliged to grant the award.

It was not disputed by the respondent that the award is similar to a bonus. However the Public Service Commission case (supra) referred to by the appellant does not take appellant’s case any further.  In that case the issue was whether the Commission can vary the granting of bonus.  The court held that the Commission indeed had power to vary or eliminate the payment of the bonus.  Part of the head note of that judgment sets out the following

“…that a bonus which is payable is by Statutory provision part of overall remuneration, but not part of the salary.  Such bonus can be reduced or eliminated provided it is done in proper form.”

In that case the Public Service Commission had passed Statutory Instrument 241A of 1995 allowing the Commission after consultation with the Minister of Finance to direct that the annual bonus in any year be postponed, reduced or withheld.  It then specifically provided for no bonus in the year 1995.  This in my view was the proper form to eliminate the bonus.  In casu the 2005 Policy provided for the payment of awards commencing from service of five (5) years. The said award was not varied in the proper form as observed above.  Technically appellant did not vary its 2005 Policy it remained intact.

The second argument is based on the Dr Dhege case (supra).  The case in my view buttress respondent’s case more thaN it does appellant’s case.  At the onset it can be implied that a company’s policy document are part of the employee’s contract.  This is so because the employee is expected to comply with the terms and conditions in the different policy documents.  The company too is expected to comply with its policies towards its employees.  Where it is unable to fulfill certain conditions, the company is at liberty to review its policies in line with its capacity.

In the Dr Dhege case (supra) the court considered the wording of the ZISCO policy the operative words were “the company may offer the car for sale”.  In those circumstances the court observed that the company had a discretion and the court cannot therefore compel it to exercise its discretion in a particular fashion.  The court actually noted “the court can compel a party to do what is mandatory in terms of an existing agreement.”  In casu the 2005 Policy provided

“Policy

All employees who serve 5,10,15,20 years plus continuous service with the company shall receive cash awards and certificates of long service.

Policy Statement

A non-taxable cash payment shall be paid at the end of the month following the employee’s anniversary of joining the company as follows…’

(emphasis added)

The wording of the Policy is peremptory in my view the appellant had no discretion.  The discretion exercisable by the appellant was to review the policy and vary the award in the proper form.  Appellant should not be allowed to just ignore its policy.  It should properly amend the policy.  In this case it was not properly varied.  The fact that no one was given a five (5) year award since 2006 does not take away appellant’s obligation.  It then follows that appellant’s argument that the award is a priviledge that can be taken away is untenable in this case.  This is so because appellant did not properly take away the priviledge it was not varied.  Appellant failed to show that it had properly varied the 2005 Policy document.  Policies are put in place by companies to ensure proper administration and parties become aware of their rights, priviledges and obligations.  These can also be varied just like the contract of employment can be varied.

Having made the above considerations clearly the appeal has no merit.  Accordingly the following order is made.

The appeal be and is hereby dismissed with costs.

KANTOR & IMMERMAN, Appellant,s legal practitioners