Mark Mabhudhu v Zimbabwe Consolidated Diamond Company (Private) Limited

### Preamble
IN THE LABOUR COURT OF ZIMBABWE HELD AT HARARE 19 MARCH 2024
JUDGMENT NO. LC/H/123/24
CASE NO. LC/H/398/23
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IN THE LABOUR COURT OF ZIMBABWE HELD AT HARARE 19 MARCH 2024

AND 21 MARCH 2024

JUDGMENT NO. LC/H/123/24 CASE NO. LC/H/398/23

IN THE MATTER BETWEEN:-

MARK MABHUDHU	APPELLANT

AND

ZIMBABWE CONSOLIDATED DIAMOND COMPANY

(PRIVATE) LIMITED	RESPONDENT

Before Honorable Mr. Justice L.M. Murasi

For Appellant	Mr. V.T.M. Masaiti

For Respondent	Mr. S. Sadomba with Mr. R. Moyo

MURASI J.,

This is an appeal against the decision of the Hearing Officer who found Appellant guilty of misconduct culminating in his dismissal from employment.

FACTS

Appellant was employed by the Respondent as its Chief Executive Officer. Respondent embarked on a process to acquire equity in an enterprise known as Great Dyke Investments (GDI). It is common cause that the Board Chairperson of the Respondent was also the Chief Operating Officer of GDI. Appellant, as the Chief Executive Officer was also part of the negotiations that were taking place for the acquisition of equity in GDI. A meeting was called to map out the proposed route. The Chairperson of the Board recused himself as he was an interested party. The rest of the Board deliberated on the issue and resolved to go ahead with the transaction. The transaction was deemed crucial and it was resolved that the matter had to be handled with speed. To this end, the Chairperson of the Board issued an instruction prohibiting any travel of all senior management staff who were involved in the transaction. This prohibition order was issued on 17 February 2023. Meanwhile, Appellant had made arrangements to travel to Thailand on 19

February 2023. This came to the attention of the Board who deemed the action as willful disobedience to a lawful order. Appellant was charged with two offences. He was brought before the Hearing Officer who found him guilty and recommended his dismissal. Appellant is dissatisfied with this outcome and has approached this Court for relief.

PRESENT APPEAL

Appellant’s grounds of appeal are couched as follows:

The Respondent misdirected itself in convicting appellant on the charge of willfully disobeying a lawful order and yet it was clear that there was no lawful order given.

The Respondent misdirected itself, which misdirection was gross, in making the determination that the travel ban by the chair of the board amounted to an employer’s decision and yet there was no board resolution not minutes of the board to confirm this position.

The Respondent erred in ignoring the evidence of the ZCDC’s board chair’s conflict of interest which affected any decisions he made regarding the ZCDC/GDI transaction as he also holds the position of Chief Operating Officer of GDI thus the order he gave was not for the advancement of the employer’s business.

The Respondent grossly misdirected itself in determining that the company had a Fixed Assets Policy yet the document that was provided was not authentic as it had come into effect when there was a different CEO yet it was signed by the current CEO, it was a photocopy, it did not have the CEO’s initials on every page as other policy documents he signed had and it did not have the date and version of print at the bottom of every page and as such could not be a policy document of the company.

The Respondent grossly misdirected itself in making a finding that there was need for the Appellant to get board approval for the ZDRA contract and yet this process had be (been) started with the approval of the previous board and had also been successful for the Respondent’s business interests.

The Respondent further misdirected itself in making a finding that there was need for board approval for the first SORHA contract yet it was a renewal of an already existing contract and actually reduced expenditure of the company, thereby saving it money.

The Respondent grossly misdirected itself in its failure to consider that the signing of the second SORHA contract had the full authority of the parent ministry and the appointing authority and as such could not be said to have been a frolic of the Appellant to whom liability could be imputed.

The Respondent grossly erred in passing a sentence of dismissal on the Appellant, which sentence induces a sense of extreme shock such that no committee, giving proper regard to the facts, would have arrived at such a decision. There was no reason for a dismissal as the matter had not been proved on a balance of probabilities.

The Respondent grossly erred and misdirected itself in failing to consider the overwhelming mitigatory factors and special circumstances which existed in favour of

Appellant. Had it given consideration to such circumstances, it would have arrived at a different conclusion. Such factors include that the Appellant had attempted to contact the board chair prior to his trip, that the contracts he signed immensely benefited the company and increased profitability such that they declared a dividend for the first time ever and were set to declare another this year, that he had reduced the cost of doing business and put the company on the world map, and that he did not personally benefit from the contracts but the company did and that he had also proffered an apology.

SUBMISSIONS BY THE PARTIES

Mr. Masaiti stated that he was going to abide by the documents filed of record. He further informed the Court that he was going to address the first three grounds of appeal as one as they raised similar issues. He submitted that the first issue to be determined was whether there was a lawful order as envisaged in the Servcor Case SC 74/17. He proceeded to enumerate the requirements of a lawful order. He further submitted that the Board Chair was conflicted and had recused himself during the meeting deliberating the GDI matter and could therefore not issue an instruction pertaining to the transaction. He added that the Deputy Chair was the one with the mandate to issue such instructions. Mr. Masaiti argued that the law governing public entities encouraged public disclosure by persons employed in the institutions. He further argued that the Board Chair was an interested party and this was the reason why he wanted the transaction expedited. He further argued that there was no Board Resolution or minutes accompanying the instruction and thus the order given by the Board Chair was not lawful.

In respect of the fourth ground of appeal it was argued that the Fixed Asset Policy which was produced was not the correct one as it lacked certain features which were identifiable with such documents. Mr. Masaiti added that the Hearing Officer did not accept the explanation given by the Appellant and the discrepancies alluded to in this regard. As far as the fifth ground of appeal was concerned, it was stated that the process had been started by a previous board. He added that the current board was sworn in 11 August 2022 and the contract was signed on 12 August 2022. It was also argued that the second agreement was a renewal of an existing contract and Appellant had managed to reduce costs from $50 000-00 to $5 000-00. He argued that there was no need to seek board approval as this a renewal. Mr. Masaiti also indicated that the second SORHA contract had the full authority of the parent ministry and the appointing authority.

As far as the penalty was concerned, it was argued that the sentence induced a sense of shock as the fact that the contracts had benefited the Company were not taken into account. It was also stated that Appellant had not benefited from these transactions and therefore a less severe penalty would have met the justice of the case. Mr. Masaiti further submitted that a reasonable tribunal would not have arrived at such a decision and that the appeal ought to succeed.

In response, Mr. Sadomba stated that he also was going to abide by the documents filed of record. He pointed out that the appeal was based on factual findings and the Appellant had the onus to show that the Hearing Officer had grossly misdirected himself in making the findings that he did.

He further stated showed that the Board Chair had recused himself from the meeting but this did not mean that he was no longer the Board Chair. The Board Chair had associated himself with the decision made in his absence and proceeded to issue an instruction to carry out the resolutions arrived at by the Board. Mr. Sadomba added that, to show that the instruction was lawful, the Appellant had done the following. He had sought to engage the Chair and the Deputy Chair as regards his trip to Thailand. He had also issued instruction to his subordinates not to travel in light of the instruction from the Board Chair. He argued that such conduct was consistent with that of an employee who was aware of the lawfulness of the instruction. He further argued that Appellant had implemented the instruction and ordered the Audit Manager not to proceed on leave.

As far as the fourth ground of appeal was concerned, Mr. Sadomba stated that there was a concession from Appellant’s Counsel that the ground of appeal was not well captured. He stated that Hearing Officer had properly addressed the issue as Appellant sought to wriggle out of the fact that there was Fixed Asset Policy in the organization. He also pointed out that Appellant sought to argue that the document had been forged which was far-fetched. In respect of the fifth ground of appeal, it was argued that boards change and that even if a process was started before one board and had not reached approval stage, it was necessary to obtain approval from the new board. Mr. Sadomba submitted that Appellant had not obtained any authority from either the outgoing or incoming board to sign the contract. In this regard, it was argued that there was no misdirection on the part of the Hearing Officer. He indicated that Appellant had not obtained the necessary approval from the Procurement Regulatory Authority of Zimbabwe (PRAZ). It was also submitted that the ZDRA contract had gone beyond the threshold allowed in the Fixed Asset Policy and this required the authority of the Board. He added that at 262 Appellant had been asked whether the Board had approved this and he had replied in the negative and Appellant had averred that the contract had been approved by political forces above the Board but he had not advised the Board of this development.

In respect of the sixth ground of appeal, Mr. Sadomba submitted that the Hearing Officer had found that the first SORHA contract had been signed without authority as it had exceeded the threshold and that there was no misdirection. He also stated that the seventh ground of appeal showed the finding of the Hearing Officer that the contract was signed without the authority of the Board and signed at the ministry’s offices. The finding was that the Board was not involved. Mr. Sadomba referred the Court to page 254 of the record which showed that Appellant’s predecessor, Dr. Morris Mpofu had indicated in a contract that he was authorized by the Board. He said this differed from the one signed by the Appellant which showed that he was authorized by the “Articles of Association”. As far as the last two grounds of appeal were concerned, Mr. Sadomba stated that for an appellate court to interfere, there should be evidence of a gross misdirection. He submitted that what Appellant had done went to the root of the employment contract and the Respondent was entitled to dismiss him in the circumstances. He urged the Court to dismiss the appeal in its entirety.

ANALYSIS

The present appeal is against the factual findings of the Hearing Officer. Precedent is awash with decided cases as to the roll of an appellate court in such circumstances. In Nyoni v Secretary for Public Service, Labour & Social Welfare & Anor 1997 (2) ZLR 516 H, GILLESPIE J had this to say at 528 E-F:

“One is able therefore to state that the irrationality of a decision, is that has no basis in evidence, is an acceptable ground of review. It will be established not only where there is no evidence upon which the decision can be based, but also where the evidence, although present, was so inadequate that no finding could reasonably be based thereon. Or, put another way, that no person properly applying his mind to the issue could reach such a conclusion…The mere fact that the reviewing judge might have come to a different conclusion is no ground for interference.”

It is accepted that the general rule therefore is that an appellate court will not interfere unless the evidence shows that the decision complained of is so outrageous in its defiance of logic that no reasonable tribunal would have arrived at such a decision based on the same facts. (See Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S). It has also been stated that there must be evidence that the court a quo acted on a wrong principle, or allowed extraneous or irrelevant matters to guide of affect it or it mistook the facts or did not take relevant matters to guide it. These are matters which are firmly entrenched where an appellate is making a determination where an appeal is based solely of factual findings.

I should make the observation that Appellant’s grounds of appeal cite the Respondent as having made the decisions appealed against. I am of the view that the reference in those grounds of appeal should have been to the Hearing Officer instead. As a result, the particular findings made by the Hearing Officer are not made the gravamen of the appeal. This was brought to Mr. Masaiti’s attention when he was dealing with the fourth ground of appeal. A reading of the other grounds of appeal, show a similar pattern. However, the Court will proceed to deal with the grounds as presented by the Appellant.

Mr. Masaiti dealt with the first three grounds of appeal as one since they raised one issue. This is to do with lawfulness of the order. The Hearing Officer had this to say in the determination:

“With regard to the issue of a lawful order, the first point I need to address is whether the order was given by the Employer, in that the Employee has argued that, due to the conflict of interest that Chair had he should not have issued the instruction at all. It is my understanding the Chair’s recusal was from partaking in the negotiations around the transaction. Issuing an order to ensure that all relevant persons were present to carry out the negotiations with regard to the transaction, by banning travel and leave during the tenure of the negotiations is not in my opinion that the Chair needed to recuse himself from as there was no conflict in doing this. Therefore, I find that the order was given by the Employer.

A second issue regarding whether the order was legitimately from the Employer that needs addressing is whether the Chair was operating of his own accord in issuing the ban or whether it was a decision of the Board as a whole. I can see no other answer to this question than to find that it had the full support and approval of the Board. If this were not so, why would the Board have set up a sub-committee to investigate the issue of failing to obey a lawful order if they were not aware of that order and did not support it.

With regard to the evidence of the Employee I find he was not consistent and poor under cross-examination. He gave various versions of events both prior to his travel and once a decision was made to charge him. He, at one time, accepted that he had attempted to get hold of the Chair to discuss the ban with him. It is also clear that at a later stage he raised an argument that the instruction did not apply to him although it did apply to other Managers. When suspended on being required to respond to the allegations raised against him he apologized for his actions arguing he did not intend to disrespect the Board or its Chair. When he presented his defence at the hearing he argued that it was neither an order or was it lawful. This approach is centred around the status of the Chair whom he argued, having recused himself, was not able to issue a travel ban. He further argued that he was required to report to the Board and not the Chair. He went on to argue that the Board had not produced anything that travel was banned. He further argued that as Ms. Sadomba had been appointed to manage the transaction the ban should have come from her. He further argued that he had permission to travel as this permission had been granted by Cabinet.

It is these varying and conflictual statements made by the Employee both in evidence and while under cross-examination that leads to me to a conclusion that he was very poor and unreliable in his defense on Count 1.”

Are those conclusions correct? Appellant’s letter dated 17 March 2023 addressed to Engineer Sadomba has telling information.

“1. Let me start by offering my profuse apology to yourself at the Vice Chair of the Board as well as to the Board Chair and the rest of the Board members on the issues at hand.

3. As you may recall, after the Board meeting of the 17th February, I spoke to you as the Chairperson of the Board dealing with the transaction to which I was very sincere about. I sought to do the to the Board Chairman but as I indicated in my note to the Ad-Hoc Committee Chairman, the Board Chair was not available on call and I resorted to writing to him explaining the circumstances of the travel arrangements as a sign of acknowledging his Board instruction.

5. I respect of the signed contracts, I also need to highlight that it was never my intention to undermine the authority of the Board as I viewed these as part of the operationalization of the strategic plan for the business resulting in the organization succeeding in its KPCS review visit as well as the improved productivity at the mine.”

I will begin with the issue of the lawfulness of the instruction. Appellant, in the above cited correspondence, does not dispute its lawfulness. He actually acknowledges that it was lawful and proceeds to apologize. The Hearing Officer made findings in respect of the inconsistent statements given by the Appellant. Clearly these are apparent from the defence that the Appellant later gave before the Hearing Officer. Can it be said that the Hearing Officer committed a gross misdirection in making the findings? The facts and the evidence militate against arriving at such a conclusion. The other issue linked to this finding is that the letter referred to above was part of the evidence produced before the Hearing Officer. The letter showed that Appellant was apologizing for his misdeeds. It was an admission of the lawfulness of the instruction. It was never withdrawn at any stage. Indeed, before this Court, it was not withdrawn. Section 36 (1) of the Civil Evidence Act, (Chapter 8:01) provides:

“(1) An admission as to any fact in issue in civil proceedings, made by or on behalf of a party to those proceedings, shall be admissible in evidence as proof of that fact, whether the admission was made orally or in writing or otherwise.”

The fourth to the seventh grounds of appeal deal with the contracts signed with Appellant’s authorization. In respect of the fourth ground of appeal the following finding was made:

“In answering to this aspect of this count (Employee) sought to argue there was no fixed asset policy, arguing initially that the policy document in the bundle of papers (Ex 1) that had been presented to the hearing was invalid as it had not been signed. Later, when a signed copy was produced it was then argued that it was a forgery. I am full satisfied that I can safely accept that Ms. Sadomba’s evidence in this regard and reject that of the Employee.”

It was averred, but not included in the fourth ground of appeal that the Hearing Officer did not consider the discrepancies raised. The discrepancy raised was the absence of the signature which was cured by another copy. Appellant then sought to argue that his signature was a forgery. I am of the view that the Hearing Officer accepted the evidence as presented on behalf of the Respondent.

Elsewhere in this judgment I have reproduced Appellant’s letter dated 17 March 2023. In that letter, Appellant does not raise the issues that he raised before the Hearing Officer. He did not state then that there was no need for authorization. He touted the issue of furthering the interests of the Respondent. The Hearing Officer made a finding that there was no authorization of the SORHA contracts. The following finding is pertinent:

“His approach is not consistent, he argues that he signed in compliance with the company articles of association, but this approach is devoid of any reasonable explanation as to how this can be a basis on which to sign contracts.

While it may have been true that the further signing in January, 2023 was at instance of the Ministry of Mines I can see no reason why by that stage this contract should not have

been placed before the Board for its approval. I a CEO is able to sign a contract binding upon the company he works for in the quantum of US$ 51 million without Board approval, one would question what the function of a Board in this circumstance would be.”

The above cited passage summarizes the Hearing Officer’s findings in respect of the contracts that were signed without board authorization. The reasoning is cogent. The analysis of the facts and circumstances is based on the evidence placed before the Hearing Officer. I am of the view that there is no misdirection in this respect.

The last two grounds of appeal deal with the aspect of the penalty. I make the observation that the eighth ground of appeal, in the last sentence, appears to ‘smuggle’ an issue dealing with the issue of the propriety of the conviction. I will not deal with it as Mr. Masaiti did not motivate it is submissions. As submitted by Mr. Sadomba, an appellant should demonstrate that the exercise of discretion in dismissing the employee was irrational. Appellant’s Counsel sought to dwell on the issues of mitigation, that Appellant had not gained anything from the contracts. The issue that needed to be addressed was whether the misconduct did not go to the root of the employment contract. As stated in Murawo v Grain Marketing Board SC 27/09, the Appellant needed to show that the nature of his misconduct was so inadvertent, so aberrant or otherwise so excusable that the remedy of a summary dismissal was not warranted. This did not come out of the submissions by Mr. Masaiti. In any event, the facts show that Appellant disregarded a lawful instruction in order to attend an occasion which was of a personal benefit. Secondly, Appellant’s by-passing of the Board in crucial matters showed that he held the Board, put in place by the Respondent, in disdain. Further, Appellant had abandoned the conciliatory approach which he had embarked upon at the beginning and adopted a confrontational attitude in the proceedings showing he could not care less even if that relationship was jeopardized. I find that the exercise of discretion in dismissing the Appellant was rational in the circumstances. The appeal ought to be dismissed.

In the result, the appeal, being devoid of merit, is accordingly dismissed with each party bearing its own costs.

Mlotswa Solicitors-	Appellant’s legal practitioners

Gill, Godlonton & Gerrans-    Respondent’s legal practitioners.