Metallon Gold Zimbabwe v Pathias Matambo

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/439/2016
HARARE, 24 MAY 2016 &
22 JULY 2016
CASE NO LC/H/889/2015
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IN THE LABOUR COURT OF ZIMBABWE	     JUDGMENT NO LC/H/439/2016

HARARE, 24 MAY 2016 &				               CASE NO LC/H/889/2015

22 JULY 2016

In the matter between

METALLON GOLD ZIMBABWE					APPELLANT

Versus

PATHIAS MATAMBO							RESPONDENT

Before the Honourable Muzofa J

For the Appellant	G Gapu (Legal Practitioner)

For the Respondent	F Piki (Legal Practitioner)

MUZOFA J:

This is an appeal against an arbitration award.

The respondent was employed by the appellant as a Business Planning Manager. He has since been retrenched. While still in the employ of the appellant the respondent raised a complaint of alleged unfair labour practices by way of non-payment of salary arrears and other allowances.

The grievance was referred for conciliation which failed. Subsequently the matter was referred to arbitration. The arbitrator found in favour of the respondent and made the following order:

“1.	The claimant is (respondent herein) entitled to receipt of his employment benefits as claimed.

2.	The respondent (appellant herein) is hereby ordered to pay the claimant as follows:

Salary arrears for 17 months			USD  97 971-00

School Fees Allowance			USD  58 212-21

Travel Allowance				USD  66 666-66

Pension Enhancement				USD  36 883-04

Reallocation Allowance			USD  11 526-00

DSTV subscriptions				USD   1 105-00

Pension not remitted				USD 82 987-00

Total Payable						USD355 351-11

3.	That the amount payable in 2 above is subject to tax deduction serve for 2 (ii) the school fees allowance which tax component is met by the respondent, and should be paid to the claimant within 30 days of receipt of this award.

4.	Parties to meet their own arbitration costs as advised.”

The appellant appealed against the award save in respect of the relocation allowance granted by the arbitrator.

The matter was initially set down for hearing on 8 February 2016. On that day the parties addressed the court on the preliminary points raised by the respondent. Consequent to the submissions the court in its judgment LC/H/140/16 dismissed the grounds of appeal in respect of pension not remitted and pension enhancement.

The respondent subsequently withdrew the claim for DSTV subscriptions.

In light of the outlined developments this court will address this appeal in respect of salary arrears, school fees allowance and travel allowance.

It is trite that the general rule in legal proceedings is that he who alleges must prove. The claimant in civil proceedings must prove his or her claim on a balance of probabilities. See Butler and Finsen, Arbitration in South Africa, Law & Practice at page 248.

I will address the grounds of appeal in turn.

Salary Arrears

According to the appellant, the arbitrator grossly erred by holding that the respondent is entitled to arrear salaries when there was a lawful arrangement at Works Council for all employees at the mine to be paid 50% salary.

The respondent denied that he was bound by the Works Council decision at Redwing. He argued that he was not part of the contract therefore in terms of the doctrine of privity of contract he cannot be bound.

The undisputed facts are that the respondent was employed by the appellant as Business Planning Manager from 1 September 2004. His contract is titled ‘Contract of employment for Harare Office employees’.

On 3 March 2014 the respondent was transferred to Redwing Mine a subsidiary of the appellant.

The transfer letter in part provides:

With effect from that date you will therefore become a mine employee. You will accordingly be taken on to the mine payroll and paid your salary by the mine….

Your conditions of employment will not change … and you may be subject to certain mine specific conditions.”

At Redwing Mine the Works Council had agreed, that employees work short shifts at 50% salary. The agreement was valid from July 2013 to June 2014. This is not in dispute. When the appellant commenced duties at Reelwing Mine from March 2014 he received 50% of his salary from March 2014 to July 2015.

The appellant conceded tat the respondent is at least entitled to his 50% salary arrears from July 2014 to July 2015.

What falls for determination is whether the respondent is entitled to the 50% salary between March 2014 to June 2014.

It is not in dispute that the respondent was not part of Redwing Mine at the time that the Works Council made the agreement to work short time with the consequent salary reduction.

In fact the respondent was also engaged in another parallel process at least in July 2013 but under the auspices of the managerial employees based at Harare.

In that meeting the management rejected the salary cut for them.  In my view this is what binds the respondent.

The Works Council decision at Redwing Mine did not represent the views of the respondent. He was not there, there was no input from him. The doctrine of privity of contract would not justify extending what was agreed at the Works Council to the respondent unless the respondent associated himself with the agreement whether explicitly or tacitly.

It is unclear whether on transfer the respondent was aware or was made aware of the 50% salary agreement. However the letter of transfer clearly indicated that he was to be subject to certain mine specific conditions, I believe the Works Council resolution was such condition. It was submitted that the respondent also worked short shifts. In my view by accepting this condition the respondent tacitly associated himself with the package that went along with the short working hours. It would be an injustice for an employee to work a few hours then get full remuneration when the rest of the employees were on 50% salary.

I did not hear Mr Piki for the respondent claim that the respondent challenged the new working conditions – that is short time. So how is it that he challenges the natural consequence of short shift work.

In my view the respondent was bound by the Works Council decision. The 50% was $5 763 x 4 months being $23 052-00. The claim should therefore be reduced by the said amount.

The respondent was awarded $97 971-00 the amount is reduced to $74 919-00.

School Fees

The ground of appeal is couched as follows – the arbitrator erred by holding that the school fees allowance was not subject to taxation when such allowances are legally taxable. In any event, the respondent did not prove his entitlement to the sum claimed.

The appellant submitted that although the benefit for payment of school fees was a contractual term the respondent was supposed to prove that he paid the claimed school fees.

It was further submitted that no receipts or bank statements were produced in the sum of US$58 312-21 claimed. The respondent proved payment of US$29 669-14. The appellant relied on the case of Kuda Madyara v Globe & Phoenix Industries (Pvt) Ltd t/a Ran Mine SC 63-02 for this proposition of the law.

It was also submitted that the school fees benefit was withdrawn from January 2014 and therefore claims after that date cannot be paid.

The respondent submitted that the school fees benefit was a contractual benefit and therefore it could not be varied without the respondent’s consent. The respondent’s benefit was different from other low level employees who benefitted from the policy, which the appellant was at liberty to vary.

Further it was submitted that the school fees benefit was not subject to taxation as evidenced by the school fees policy.

I would like to address the issue on entitlement. The appellant’s ground of appeal did not raise the issue. It was brought up by way of oral submissions before the court. I agree with the respondent the school fees benefit was a contractual benefit and one party cannot therefore unilaterally vary it. The withdrawal by way of a memorandum of the school fees benefit would therefore be of no force and effect except for those who enjoyed the benefit from the school fees policy.

This is different from discretionary allowances since it’s a contractual term. The respondent was entitled to the benefit ex contractu.

Having found that the respondent was entitled to the school fees benefit the next issue for determination is how much is he entitled to.

Before the arbitrator the respondent claimed a total of $13 500-00 in respect of Joshua Matambo and $11 000-00 for Salame Matambo these were at Heritage School for the three terms of 2014 and two terms in 2015.

A total of $26 935-48 was claimed on behalf of Michael Matambo a college student then in Canada.

It is not in dispute that the respondent produced invoices from Heritage School and two letters dated 24 July 2015 confirming that the two students’ school fees and levies were up to date by then.

The authenticity of those letters was not in question.

In ordinary parlance it would be expected that apart from the invoices the respondent was expected to produce receipts confirming payment.

I find nothing standing in the way to accepting the letter from Heritage School authored by the school bursar. The letter confirmed that the two students were at Heritage School and that the school was owed nothing in terms of fees and levies. To that extent it means the fees were paid.

In my view to just accept receipts as proof of payment would be a too rigid an approach. The application of the law depends on the circumstances before the court.

In respect of Joshua Matambo the total school fees and levies were $13 500-00. I will disregard the third term invoice since the July 2015 letter by Heritage School did not include the third term.

Similarly the invoices for Salome Matambo for the period were produced totalling $11 500-00 and these are granted.

In respect of Michael Matambo there was proof that he was a student at Algonquin College Canada. Proof of the payable fees was presented. Proof of payment of the fees by way of bank statements from Barclays Bank was produced. I agree with the appellant there was proof of payment of college fees in the sum of $29 669-00.

There was a payment of $3 400-00 directly into Michael Matambo’s account it being for rentals. The education allowance clause in the contract provides:

“You may claim for your dependent children’s tuition, academic/boarding fees and school levies …”.

In my view if the accommodation deposits were payable to Algonquin College then that would fall within boarding fees.

In this case the fact that it was payable to Michael Matambo that could imply the accommodation was a personal arrangement. It would therefore not be covered in the education allowance.

The respondent would therefore be entitled to $29 669-00 for Michael, $13 500-00 for Joshua and $11 500-00 for Salome. The total amount due is $54 669-00.

In respect of taxation, the respondent relied on the Policy Ref No 002-01-2007 which provided that the school fees benefit for employees in Grade 16 and above would be grossed up. Since the respondent relies on the policy and not the contract for this clause, it follows that the effect of the memorandum doing away with the school fee benefits is applicable.

In terms of that memorandum with effect from January 2014 the appellant was to cease paying out the school fees benefit.

This means the respondent remained with the contractual school fees benefit which is subject to taxation.

Travel Allowances

The appellant submitted that the arbitrator erred in awarding the travel allowance when such allowance was subject to approval by the company’s Group Chairman and such approval was not proved.

The respondent argued that this claim is based on the contract and policy 031/02/2009. According to the respondent the wording of the policy should be interpreted to mean that the approval by the Group Chairman and the Chief Executive Officer was a mere administrative formality as opposed to giving the right. The right was already vested.

I do not agree with the respondent for the following reasons.

This particular travel allowance was not ex contractu. The respondent’s contract of employment has two travel benefits. The external travel benefit was for travelling outside the country on business. It had an annual budget of US$4 000-00.

The holiday travel benefit allowed him to purchase from the company up to a maximum of $2 500-00 whenever he took leave to travel outside the country.

To that extent the claim is therefore solely confined to the policy.

The policy is very clear. Interpretation requires that words are given their ordinary meaning. I do not find an absurdity arising out of that application of the golden rule of interpretation.

The policy is titled senior staff travel allowance. It sets out the amount payable per annum to certain designations. In terms of that document the respondent was entitled to US$40 000-00 per annum. It was meant to retain skills and to motivate senior staff.

The fourth paragraph provides:

“The allowance will be paid at beginning of each financial year in October, subject to approval by the Metallon Gold Zimbabwe Group Chairman and Chief Executive Officer." (underlining for emphasis)

The inclusion of the phrase “subject to approval” cannot be interpreted as a mere formality. It meant payments would only be made when the Group Chairman and the Chief Executive Officer have approved the payments for every financial year.

It is my view that approval was a strategic financial decision made at the beginning of each financial year. In essence the two would have had occasion to analyse whether it is a financially sound decision to make the payments taking into consideration the performance of the appellant and other external considerations.

It would certainly bring the appellant to its knees to just pay out such allowances in a vacuum simply because there is a policy. The ‘subject to approval’ means the powers that be made the decision primarily with a view to make sure the appellant remains a going concern.

The respondent failed to produce the approval by the Group Chairman and the Chief Executive Officer to substantiate his claim of US$66 666-66.

I must add though that the fact that the appellant has in the past paid this allowance following an arbitral award does not bind this court. Each case depends on its merits.

There was no approval therefore the claim cannot succeed. The arbitrator fell into error for to make an award with no evidence is to err at law. See Heywood Investments (Pvt) Ltd t/a GDC Hauliers v Zakeyo SC 32-13.

From the foregoing clearly the appeal partially succeeds, it is therefore ordered as follows:

The appeal be and is hereby upheld.

The arbitral award is hereby set aside and it is varied to the following extent:

“The appellant is ordered to pay the respondent the following:

Salary arrears $74 919-00

School Fees allowance $54 669-00.

The travel allowance claim be and is hereby dismissed.”

Scanlen & Holderness, appellant’s legal practitioners

I E G Musimbe & Partners, respondent’s legal practitioners