Mettallon Gold Zimbabwe (Pvt) Ltd v Godfrey Fore

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/402/16
HARARE, 16 MAY 2016
CASE NO. LC/H/1101/15
JUDGMENT NO. LC/H/402/2016
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IN THE LABOUR COURT OF ZIMBABWE	                  JUDGMENT NO. LC/H/402/16

HARARE, 16 MAY 2016				       CASE NO.  LC/H/1101	/15

AND 23 JUNE 2016

In the matter between:-

METTALLON GOLD ZIMBABWE (PVT) LTD				Appellant

And

GODFREY FORE								Respondent

Before The Honourable E. Muchawa, Judge

For Appellant	Mr G. Gapu (Legal Practitioner)

For Respondent	Mr F. Piki (Legal Practitioner) with Mr Zvidzai (Assistant), Ms Phiri (intern) & the respondent Mr Piki

MUCHAWA, J:

This is an appeal against an arbitral award.

The respondent was employed by the appellant in the capacity of finance manager with effect from 2004.  During the course of employment, some contractual benefits were allegedly not paid from as far back as 2006.  The respondent lodged a complaint claiming his outstanding salaries and benefits in or about June 2015.  When the matter remained unresolved at conciliation, it was referred to arbitration.

The arbitrator found in favour of the respondent and made the following award,

“1. (i)	Salary Arrears				-	$ 48 590.39 NET

(ii) 	Leave days				-	$ 17 426.70

(iii)	Leave Bonus				-	$ 17 039.44

(iv)	Pension Enhancement			-	$158 109.12

(v)	Pension not remitted to MIPF		-	$ 73 208.70

(vi)	School fees				-	$ 34 300.00

of which				-	$ 11 433.33

is taxable balance			-	$ 22 867.00 NET

(vii)	Travel allowance			-	$ 41 333.32

The claimant is entitled to purchase the motor vehicle which he is using in terms of the motor vehicle policy.”

The grounds of appeal before me are;

The arbitrator erred by holding that the claims which were outstanding for more than two years had not prescribed in terms of the law when they had prescribed.

The arbitrator erred by holding that respondent was entitled to the travel allowance when such allowance was subject to approval by the Company’s group chairman which approval was not proved.  The arbitrator’s finding was a serious misdirection on the facts which amounts to a misdirection on the law.

The arbitrator erred by holding that respondent was entitled to the pension enhancement benefit when such benefit was discretionary and had fallen away or had been withdrawn by the company.  The arbitrator’s finding was a serious misdirection on the facts which amounts to a misdirection on the law.

The arbitrator erred by holding that respondent was entitled to the unremitted pension when such contributions are due and payable to the Pension Fund.

The arbitrator erred by awarding respondent a leave bonus when the contract of employment provides that such a bonus is only payable to an employee who has actually gone on leave.

The arbitrator erred by failing to determine the manner in which the purchase price of the motor vehicle should be determined in terms of the motor vehicle policy.

The respondent correctly abandoned its point in limine on dirty hands at the hearing.  The appeal is opposed and I deal with each ground of appeal, in turn, below.

Ground 1 - Prescription

It is the appellant’s case that the claims for pension enhancement and travel allowances which were due and payable before and up to 18 September 2013 are prescribed.

I was referred to section 94 of the Labour Act and it is argued that the arbitrator wrongly held that the unfair labour practices were continuing and prescription would therefore not apply.  This is argued, is on account of the fact that each sum would accrue, become due and payable on a monthly or annual basis.  Each such sum would constitute a debt on its own hence there was no continuing unfair labour practice.

An example was given of sexual harassment as defined in Section 8 (h) of the Labour Act, as a continuing unfair labour practice.  It was argued that the non payment of benefits is not an unfair labour practice in terms of section 8 of the Act.

The appellant denies ever unequivocally acknowledging indebtedness so as to interrupt prescription. On the other hand, the respondent interprets section 94 (2) of the Act in his favour by alleging that the unfair labour practice was continuing and the proviso to that section would bar the application of prescription.

It was also pointed out that the initial complaint was made on 18 June 2015 and not August 2015 as alleged by the appellant.

The respondent explained that when he made the initial complaint on 18 June 2015, he was still employed by the appellant as he had not yet resigned and his salaries and benefits continued to accrue.  It was argued that in terms of section 94 (3) (b), the respondent only became aware that the appellant would not pay all outstanding salaries and benefits, at the point of leaving and not before that, hence the unfair labour practice or dispute first arose around that time.  Before that time, it is averred that the appellant had always acknowledged its indebtedness.

My attention was drawn to an email on record between the respondent, the group human resources manager and a Mr Chimombe (an employee in same grade as respondent).  In that e-mail the group human resources manager gave a run down as to how the pension enhancement benefit was to be calculated in respect to a different employee.

Section 94 of the Labour Act provides as follows;

“94 Prescription of disputes

(1)(1) Subject to subsection (2) no labour officer shall entertain any dispute or unfair labour practice unless

(a) it is referred to him; or

(b) has otherwise come to his attention; within two years from the date when the dispute or unfair labour practice first arose.

(2) Subsection (1) shall not apply to an unfair labour practice which is continuing at the time it is referred to or comes to the attention of a labour officer.

(3) For the purpose of subsection (1), a dispute or unfair labour practice shall be deemed to have first arisen on the date when –

(a) the acts or omissions forming the subject of the dispute or unfair labour practice first occurred; or

(b) the party wishing to refer the dispute or unfair labour practice first became aware of the acts or omissions referred to in paragraph (a), if such party cannot reasonably be expected to have known of such acts or omissions at the date when they first occurred.”

I have to resolve when the dispute between the parties first arose so as to determine prescription begun to run.

In the case of Zimasco Private Limited v San He Mining Private Limited HH 65-15, Chigumba J discussed this issue at length and referred to various cases.  It was held in Escom v Stewarts & Lloyds SA (Pty) Ltd 1979 (4) SA 905 (W) at 908 E that a debt is due when it is “owing and already payable” or “immediately claimable and payable at the will of the creditor

In Mukahlera v Clerk of Parliament & ORS 2005 (2) ZLR 365 (SC) it was held that a cause of action in relation to a claim is the entire set of facts which gives rise to the claim and includes every act which is material to be proved to entitle a plaintiff to succeed in his claim.

In casu, on a monthly or annual basis when the pension enhancement and travel allowances were accruing and remained unpaid, they became owing and already payable or claimable and the non payment of same gave rise to the claim.  In my opinion it was not necessary to prove any other facts beyond these as a basis for the claim.

These claims do not fall within the ambit of a continuing unfair labour practice as envisaged by section 94 (2) of the Labour Act.  As correctly argued by the appellant, the issues in dispute are not defined as unfair labour practices in section 8 of the Labour Act.  The acts or omissions forming the subject matter of the dispute in casu occurred and were completed as a cause of action every month or year when the debt was unpaid and claimable.  It was not necessary for the appellant to express a refusal to pay so as to complete the cause of action.

Accordingly the first ground of appeal succeeds.  The claims which were outstanding for more than two years had prescribed.

Ground 2 – Travel Allowance

It is the appellant’s case that the arbitrator awarded the travel allowance contrary to the provisions of the employment contract as read with the Senior Staff Travel Allowance Policy of 1 October 2009.

It is contended that such an allowance was payable subject to a person having travelled and to approval by the Group Chairman CEO.

In the event that this is awarded, I was urged to take into account the issue of prescription.

The respondent’s counter argument is that in terms of the contract of employment it was indeed necessary to have travelled in order to enjoy this benefit but that the policy of 1 October 2009 recast the benefit and made it an entitlement payable whether or not one travelled and that the payment was for staff motivation.  The approval of the Group Chairman is said to relate only to the payment time and not entitlement.

The respondent conceded that prescription would affect his claims from 2005 to October 2009 but persisted with the rest of the claims.

The contract of employment of 2004 has the following clause;

“External Travel Benefits

You will have the opportunity to travel outside of the country to attend courses and seminars in terms of company development programmes and to deal with various parties relevant to the business as and when this is deemed necessary by the company.  Such travel will be managed such that the costs do not exceed the annual budget for this which is currently US$4 000 per person in each financial year.”

The Senior Staff Travel Allowance is in the Human Resources Policies and Procedures under Senior Staff Retention Benefits and is dated 1 October 2009.  It provides as follows;

“SENIOR STAFF TRAVEL ALLOWANCE

In order to retain skills and to motivate senior staff to remain in the company, a Senior Staff Travel Allowance will be paid as follows;

Recipients							Amount per Annum

Group Chairman & CEO					US$85 000.00

Chief Operating Officer					US$65 000.00

Group Finance Executive					US$50 000.00

Harare Executive Staff & Mine Managers			US$40 000.00

Senior Harare Office Non Executive Departmental

Heads								US$20 000.00

Harare Office	Senior Staff					US$10 000.00

Mine Head of Departments					US$  4 000.00

The effective date for the implementation of this policy is 1 October 2009.

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.

The allowance will only be payable to eligible employee, after the employee has completed one year of uninterrupted service with the company.”

What is clear from the two documents is that the external travel benefits as contained in the contract of employment is different from the policy benefit.

The contractual benefit is for travel to attend courses and seminars, subject to travel having occurred and would be limited within a US$4 000.00 budget per year.

The policy on senior staff travel allowance is not specific to attendance of courses and seminars in terms of company development programmes.  It is not specific to travel having occurred.  A specific amount is payable to each specific level of senior staff.  The date of payment is predetermined as October of each year.  To be eligible, an employee would have to have completed a year of uninterrupted service.

I believe that what was subject to approval by the group chairman and the chief executive officer would not be the date of payment but whether or not senior staff would enjoy this benefit for each particular year.  In which case it would be necessary to prove that an approval existed.

On this account, ground 2 of appeal succeeds as the entitlement to the travel allowance was not proved.

Pension Enhancement Benefit

The respondent relied on a policy document of the 1st of January 2007 dealing with Senior Staff Remuneration and Benefits titled “Pension Enhancement Allowance “

It provides as follows

“Preamble

The value of the Zimbabwean based pension schemes have been significantly eroded due to the negative effects of the macro economics within the country.

To address this issue key senior staff will be paid a once off annual payment at 16% of the basic annual salary at the implied exchange rate at the time.

Should the foreign currency regime become less restrictive it is the company’s inattention (sic) to have this benefit paid out in foreign currency.

This benefit will only be claimable after the employee has completed one year of uninterrupted service with the company.

The effective date of implementation of this policy is 01 October 2006.”

The appellant argues that after the introduction of multi currencies in Zimbabwe in January 2009, the employees had no vested right to claim the payments which were discontinued in November 2013 as they were gratuitous

The respondent contends that though such benefit was not contractual, it was conferred by appellant and accepted and became part of the contract and cannot be unilaterally varied.

I find that the appellant’s argument relating to the multi currency era has no merit.  This is because paragraph 2 of the policy clearly states that in the event of the foreign currency regime becoming less restrictive, then such an allowance would be paid out in foreign currency.

The case of Air Zimbabwe v Zendera and ORS 2002 (1) ZLR 132 (S) supports the respondent’s contention that once the benefit was conferred by the policy, it constituted part of the contract of employment and could not be unilaterally varied.  No proof of lawful withdrawal of benefit was availed.

Ground 3 of appeal therefore fails save for the portion of the benefit found to have prescribed under ground 1 of appeal.

Ground 4 – Unremitted pension

It is not disputed that the appellant deducted pension contributions from the respondent’s salary but did not remit these to the Mining Industry Pension Fund (MIPF).

In terms of the contract of employment there was a pension scheme administered by MIPF into which the company would contribute the equivalent of 7% of monthly basic salary, while the employee paid 5% with an option to increase his own contributions in terms of the MIPF rules.

Correspondence from MIPF shows that as at 31 October 2015, calculated from September 2011, the appellant had deducted $30 932.  31 from the employee and not remitted it whilst also not remitting an equal amount that it was supposed to remit.  The unremitted amount totaled $61 864.62 plus interest of $11 344.04.

The argument by the appellant is mixing up two different benefits being this pension fund benefit administered by MIPF and the Accident and Insurance Cover Benefit which would be under Old Mutual.  MIPF has nothing to do with the Group Life Cover.

I find no error in the arbitrator’s conclusion as it relates to the claim for unremitted pension on the basis of the clear contractual entitlement and the MIPF unequivocal correspondence on the same which is on record page 26 which calculates the amount due to respondent as stated above and advised appellant to calculate this and pay the member accordingly.

Ground 4 of appeal is dismissed for lack of merit.

Ground 5 – Leave Bonus

Though in the ground of appeal, the appellant was disputing the award of leave bonus on the basis that it is only payable to an employee who has gone on leave, in submissions before me, what was then queried was the quantum of leave bonus awarded.

It is argued that there was no legal basis to award an amount of $17 039.44 as the total leave days taken were 44 and his entitlement is 50% leave bonus calculated on a monthly basis.  Based on a salary of $8 442.00 per month, it is argued that the calculation should be;

44 days x $324.85 (per day) x 50%	=	$7 146.70.

It argued that the arbitrator should have used the 2014 salary instead of the 2015 one as that is when the leave was taken.

There was a concession by the respondent on the total number of leave days being 44.  Further that in calculating the leave pay 14 days should be paid at 60% of $8 446.00 being the 2014 salary and 30 days at 60% of $10 068.69 being the 2015 salary.

The contractual benefit provides that a leave bonus based on 50% of monthly basic salary prorate for the number of annual leave days taken is paid when one is proceeding on leave and that the amount increases to 60% after five years of service.

Accordingly the leave bonus is

14 days x 324.85 (per day for 26 working days) x 60% = $2 728.70.

30 days x 387.26 (per day for 26 working days) x 60% = $6 970.63

Total 		=	$ 9 699.33.

Ground 5 of appeal therefore partly succeeds.

Ground 6 – Motor Vehicle Purchase

The arbitral award states that the respondent is entitled to purchase the motor vehicle in terms of the motor vehicle policy.  A dispute has arisen as the respondent claims he is entitled to purchase the vehicle at 5% of the market value whilst the appellant claims that the Mining Tender Board should determine the purchase price.

There is on record, a Senior Staff Vehicle scheme policy document.  It provides in clause 3.0 on purchase price.  I quote

“3.0	Purchase Price

3.1	At the inception of the scheme the purchase price of the vehicle will be

based on either

The written down value if the vehicle has not fully depreciated; or

In the case of a fully depreciated vehicle 5% of its market value at time of purchase.

The determination of the purchase price will be at the discretion of 	Mining Tender Board whose decision shall be final.”

In my opinion, clause 3.2 gives the Mining Tender Board the responsibility of determining the purchase price of a vehicle and the decision so made is final.

Clause 3.1 addresses the factors to be considered in determining the purchase price of a vehicle, particularly at inception of the Senior Staff vehicle scheme.

The policy does not take away from the Mining Tender Board the prerogative to have a final say on the purchase price.

Accordingly this ground of appeal succeeds.

Consequently the appeal partly succeeds and the arbitral award is set aside and substituted as follows;

“1.	That the respondent be and is hereby ordered to pay claimant the following,

Salary arrears			-	$48 590.39 net

Cash in lieu of leave			-	$17 426.70

Leave bonus				-	$ 9 699.33

Pensions not remitted to MIPF	-	$73 208.70

School fees $34 300 of which

$11 433.33 is taxable balance	-	$22 867.00

Pension Enhancement to be calculated from 18 June 2013 only as the prior claim had prescribed.

2.	The claimant is entitled to purchase the motor vehicle which he is using in terms of the Motor Vehicle Policy with the purchase price to be fixed by the Mining Tender Board.”

Musimbe and Partners, appellant’s legal practitioners

Scanlen and Holderness, respondent’s legal practitioners