Letwin Rugwete v Central African Building Society

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/241/2013
HARARE, 11 SEPTEMBER, 2012
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE		JUDGMENT NO. LC/H/241/2013

HARARE, 11 SEPTEMBER, 2012			        CASE NO. LC/H/141/2004

AND 25 OCTOBER, 2013

In the matter between

LETWIN RUGWETE					-	Appellant

And

CENTRAL AFRICAN BUILDING SOCIETY		-	Respondent

Before The Honourable B.T. Chivizhe: President

Appellant 		-	Mr E. Chamunogwa (Unionist)

Commercial Workers Union of Zimbabwe

For Respondent	-	Mr T. Nleya – Legal Practitioner

Gill, Godlonton and Gerrans

CHIVIZHE, B.T.:

The matter was placed before me as one for quantification of damages pursuant to an order by the Labour Court granted on 20 January, 2006 the operative part of which reads as follows;

In the result the appeal is dismissed the decision appealed against is hereby confirmed.  Save to add that should reinstatement no longer be an option, CABS is ordered to pay Rugwete her back pay and benefits with interest plus damages for loss of employment.  Should the parties fail to agree on the damages payable, either party can approach this court for quantification

The Applicant was unlawfully dismissed in 2003 on charges of sabotage, violence and other relevant charges.  She lodged an appeal with the Labour Court.    The Labour Court then issued an award in the terms as referred to supra.  The Respondent then appealed to the Supreme Court against the determination by the Labour Court.  The Supreme Court dismissed the appeal with costs.

The parties having failed to agree on reinstatement and on quantum of damages payable in lieu of reinstatement the Applicant approached the Labour Court for quantification of the damages.

The Applicant has made the following claims;

REINSTATEMENT DAMAGES – L. RUGWETE

SALARY AS AT 2009 =US$402.00

(i) SALARY BACKPAY (US$)

January 2009			$402.00

February				$402.00

March				$402.00

April				$402.00

June				$402.00

July				$402.00

Sub- Total				$2 814.00

(ii) CASH IN LIEU OF LEAVE DAYS = $1 206.00

TERMINATION OF CONTRACT

3 Months notice pay		=	$1 206.00

Gratuity (C.B.A)		=	27% of salary x 22 years = $2 387.88

Damages 24 months		=	$9 648.00

GRAND TOTAL			=	$17 261.88

The rate of salary applied by the Applicant is the salary of someone of an equivalent grade to Applicant as at January, 2009 i.e. $409.00.

The Respondent’s position is that the law governing damages is now settled.  Where an employee has been wrongfully dismissed and damages (including back pay) are awarded the employee is required to mitigate his loss.  Respondent cited cases such as Nyaguse vs Mkwashi Estates (Pvt) Ltd 2000 (I) ZLR 571 (S).  Gaunlet Security Services vs Leonard 1997 (I) ZLR 583 (S) on 586: RBZ vs Siwawa Estate Executive 1999 (I) ZLR 185.

It was Respondent further submission that back pay ordinarily forms part of damages.  For that proposition Respondent relied on Tel One (Pvt) Ltd vs Kuyumani Zulu SC 110/04 where Chief Justice Chidyausiku on page 4 stated as follows;

“I am satisfied that the tribunal did misdirect itself in calculating the period forming the basis and damages and also, in failing to appreciate that back-pay is part of damages and treating the two separately.”

The third principle referred to by the Respondent is that a person who has been wrongfully dismissed must look for alternative employment.  In the event that he does not obtain alternative employment he can only be compensated for the period between his dismissal and the date he could reasonably have been expected to obtain alternative employment [Ambali vs Bata Shoe Company 1999 (I) ZLR 374 (S)].  In addition he can only be compensated by an amount that should be calculated as the rates applicable at the time and not at today rates or some future unknown rate. [Olivine Industries (Pvt) Ltd vs Caution Nharara SC 88/05].

Based on the principles enunciated in the case authorities referred above the Respondent’s submission therefore was in regards to;

Back pay – The order of reinstatement by Labour Court being dated 20th July, 2006 back pay ought therefore to be paid to that date.  However due to the fact that Applicant mitigated her loss and obtained alternative employment in November 2004 the period covered is March 2003 to November 2004.

Benefits and Allowances- She was entitled to allowances, pension and medical aid for the period between March 2003 and November 2004 when she obtained alternative employment.

The Respondent finally submitted that the back pay amount is payable in Zimbabwe dollars, Applicant had not laid a clear legal basis for a claim in United States Dollars.  The Respondent however, on a without prejudice basis was offering an initial amount of US$3 633.00 which was later revised after negotiations directed by the court, to the sum of US$4, 500.00.  The Respondent was offering US$4 500.00 in full and final settlement of all the claims by Applicant against Respondent.

In response to Respondent’s submission Applicant’s position was that although it could not be denied that she obtained alternative employment in November 2004 she however, did not last with that employer.  She was therefore claiming damages in lieu of reinstatement for 2 years.

Turning to the facts of this case it is clear that the Applicant’s claim has been unnecessarily inflated.  This could be through lack of proper advice, or ignorance or both.  With regards the whole claim it must also be pointed out at the outset that by operation of the law the Applicant is required to prove each and every claim made (as per First Mutual Life Limited v Jackson Muzivi SC 9/07).  What has however been placed before me are bold averments with no supporting evidence.  No evidence in the form of pay slips for an example has been placed to substantiate the claims for cash in lieu of leave and gratuity.

With regards Back pay and Damages in lieu of reinstatement the principle is laid that back pay forms part of Damages in lieu of reinstatement.  The Respondent aptly referred to the Tel One case supra. The Applicant has also in regards that claim conceded that she indeed obtained alternative employment in November, 2004.  This means she is entitled to be paid back pay and benefits to cover the period from date of unlawful dismissal March, 2003 to that date in November, 2004.  There is clearly no legal basis for claiming after the date in November, 2004.  The fact that employment was short lived is in my view inconsequential.  In Tel One (Pvt) Ltd vs Zulu referred to supra, the employee only worked for 6 months at the new job before his employment was terminated.  The Chief Justice Chidyausiku held that the act of accepting the alternative employment is what terminated the contract.  The Applicant in casu conceded to having been productively employed for two years at most.

There is also no legal basis for using a salary rate as at January, 2009.  The salary rate applicable to the time is as furnished by the Respondent.  The net total for back pay and benefits is therefore calculated to be Z$28, 552,005.00.

The Applicant’s position is that the amount should be payable in United States Dollars.  The Respondent does not agree but has however offered the amount of US$4, 500.00 which translates to 8 months’ salary using the salary rate of $409.00.

When the legislature promulgated the use of multiple currencies in 2009 it did not demonetize the Zimbabwe dollar and neither did it order the conversion of all debts, contracts or obligations existing in Zimbabwe dollars into foreign currency.  This situation has presented a problem for many claimants such as the Applicant who are otherwise owed back pays.  The Supreme Court however through its decision in Central Africa Batteries v John Mhangu SC 79/10 dated 28 March 2011 has given the inferior courts some direction.  In the decision the court directed the conversion of back pays sounding in Zimbabwean dollars to United States Dollars at a rate to be agreed between the parties.  In the event that the parties failed to agree the Labour Court would then step in and quantify.

I am inclined in this matter to take a similar approach.  The parties clearly do not agree on the rate of conversion.  This court should therefore step in and quantify the back pay and benefits sounding in Zimbabwean dollars.

The Applicant had calculated her claim using a salary rate pegged at US$409.  The salary rate was applicable at the inception of period of multiple currencies i.e. January and February 2009.  That salary rate cannot operate retrospectively.  It follows that the salary rate that the court ought to rely on is less than that figure.  The court is forced in the circumstances to make an estimate of the appropriate salary rate.  Although the Respondent conceded that Applicant would have been entitled to some allowances, pensions and medical aid no proof of those entitlements was placed before the court.  For the sake of expediency the court adopted the back pay rate of US$300 to cover both salary and benefits. Using the figure therefore Applicant’s back pay and benefits from March 2003 to November 2004 are calculated as follows; US$300 x 21 months.  The net total is US$6 300.

In the circumstances the following order is made;

That the Respondent shall pay to the Applicant in back pay and benefits the sum of US$6 300 together with interest at the prescribed rate from the date of the order of this court to the date of payment in full.

The claims for cash in lieu of leave and gratuity are dismissed as unsubstantiated.

The claim for damages in lieu of reinstatement is dismissed.

There shall be no order as to costs.

Commercial Workers’ Union of Zimbabwe, Representing the Appellant.

Gill, Godlonton and Gerrans Legal Practitioners, Representing the Respondent.