Michael Chipato v Energo (Private) Limited

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/526/16
HELD AT HARARE ON 31st MAY, 2016
CASE NO. LC/H/289/15
JUDGMENT NO. LC/H/526/16
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IN THE LABOUR COURT OF ZIMBABWE	    JUDGMENT NO. LC/H/526/16

HELD AT HARARE ON 31st MAY, 2016 	    CASE NO. LC/H/289/15

AND 9TH SEPTEMBER, 2016

In the matter between:-

MICHAEL CHIPATO							    Appellant

And

ENERGO (PRIVATE) LIMITED					    Respondent

Before the Honourable Mhuri, J.

For Appellant	:	Mr T J Mafongoya (Legal Practitioner)

For Respondent	:	Mr P Ranchod (Legal Practitioner)

MHURI J.

On the 6th November, 2013 Arbitrator Dangarembizi issued the following award:

“That the dismissal of the claimant is unlawful and is set aside and the Respondent is hereby ordered to pay damages in United States Dollars for unlawful dismissal, the quantum of which is to be agreed by the parties granting the order, failure of which either party may apply to this Tribunal for quantification.

Each party is to meet its own costs.”

The parties could not agree on the quantum as a result, they approached the same Arbitrator for quantification of the damages.  Before the Arbitrator, Appellant’s claim for damages was

Back pay from date of dismissal to date of judgment 	$21 092,40

Damages for loss of employment for 36 months 		$17 496,00

Cash in lieu of leave

2009								$   160,00

2010								$   302,40

2011								$   394,20

2012								$   455,40

2013								$   486,00

$ 1 798,20

Three (3) months notice 						$   480,00

Gratuity for 21 years

Medical aid 100% employer contribution

Bonus for 2009 – 2013 						$ 1 797,00

Respondent opposed the claim on the basis that Appellant was not entitled to all other claims except damages only.

After considering the parties submissions, the Arbitrator issued Appellant,

36 months damages at $160,20 per month			$ 5 767,20

Gratuity 								$   874,69

3 months notice at $160,20 per month				$   480,60

Leave pay								$   160,20

Medical aid 100%							_________

The total awarded was 						$ 7 282,69

Appellant was aggrieved by this award and filed this appeal.  The grounds of appeal as gleaned from the notice of appeal, can be summarised as follows:-

The Arbitrator grossly misdirected himself at law, by making a finding depriving Appellant back pay yet he had made a finding that Respondent had unlawfully terminated Appellant’s contract in 2009. Appellant had not resigned and had justified why reinstatement was not suitable.

The Arbitrator misdirected himself by ordering payment of damages using the $160,20 rate instead of the November 2013 rate the date of the award.

The Arbitrator misdirected himself by making a finding that Appellant was not entitled to leave days accrued for the period 2009 – 2013.

In order to determine the first ground of appeal, one has to look at the first arbitral award, to see what the Arbitrator awarded.

Was it,

reinstatement without loss of salary and benefits

or just

reinstatement

or

damages in lieu of reinstatement

or just

damages?

The operative part of the award reads

“… Respondent is hereby ordered to pay damages in United States Dollars for unlawful dismissal…”

It is clear from the above that reinstatement was not ordered by the Arbitrator.  If reinstatement was meant to be part of the award, the Arbitrator could have stated this in clear terms.

Further, as stated by McNally JA (as he then was) in the case of

CHEGUTU MUNICIPALITY V MANYORA 1996 (1) ZLR 262 (S) at page 267 A-C

“reinstatement” means only “putting a person again into his former job as of the present or some future date…”

I conclude, therefore, “reinstatement” in the employment context means no more than putting a person again into his previous job.  You cannot put him back into his job yesterday or last year.  You can only do it with immediate effect or from some future date.

You can, however, remedy the effect of previous injustice by awarding back-pay and/or compensation.  But mere reinstatement does not necessarily imply that back pay and/or compensation automatically follows.”

In casu, the Arbitrator considered Appellant’s submission that he was retiring and came to the conclusion that reinstatement was no longer possible.  He awarded damages instead.  His award is silent on the issue of back-pay.

If reinstatement had been ordered, still according the Manyora’s case (supra) the payment of backpay would not be as a matter of course.  At page 268 A-B of his judgment McNally JA had this to say,

“I conclude therefore that the word “reinstate” or “reinstatement” carries

no automatic retrospective connotation, either in ordinary language or in our legislation.  ………….

If retrospectivity is intendend, one would normally look for additional words such as “with effect from date of dismissal” or “with effect from (a particular date in the past) or “with back pay and all benefits from ……….(date).”

In view of the above, the Court would be enjoined to look for the words which connote retrospectivity in the award.

Section 98 (9) of the Labour Act [Chapter 28:01] (THE ACT) gives an Arbitrator the same powers as the Labour Court when hearing and determining any dispute.  In that regard therefore in terms of Section 92B of the Act, it is within the Arbitrator’s powers to fix a date from which his decision, order or determination shall be effective, which date may be an earlier or later than the date of the decision, order or determination.

If reinstatement had been ordered, it could have been within the Arbitrator’s power to give an effective date which does not carry automatic retrospectivity.

Having found that the Arbitrator did not order reinstatement, I do not falter his second award in which he did not grant back pay.

It is a well established position of the law that damages are calculated on the basis of the length of time, calculated from the date of dismissal which it would reasonably take the dismissed employee to find an alternative job.

See	REDSTAR WHOLESALERS vs EDMORE MABIKA SC 52/05.

The rate to be used in calculating these damages is the rate pertaining at the date of order of reinstatement.

See 	OLIVER CHIRISERI vs PLAN INTERNATIONAL SC 56/2002

and

OLIVINE INDUSTRIES vs CAUTION NHARARA 2006 (1) ZLR 203 (S).

In casu, the date of the first award which granted the payment of damages is 6th November, 2013.  The rate pertaining in November 2013 was $486,00.  I did not hear Respondent dispute this rate.

The Arbitrator in computing the damages, used the rate that was applicable in February 2009 namely $160,20.

In view of the principle established in the Chiriseri case (supra) I find that the Arbitrator misdirected himself in using the 2009 salary rates.  Consequently this part of the award cannot be allowed to stand.  The period of 36 months awarded by the Arbitrator has not been contested by Respondent.  Therefore the amount payable to Appellant for this period must be the total of 36 x $486.00 and not 36 x $160,20.

By the same token, the gratuity, notice pay and leave granted to 
Appellant must be calculated using the same rate of $486,00.

My finding on the first ground equally affects Appellant’s argument on the issue of leave.  There is no legal basis for granting Appellant leave for the period up to November, 2013.

For applying the wrong principle in computing the damages, the award is subject to interference by this Court.  In that regard the computation by the Arbitrator is hereby set aside and substituted with the following; which Respondent is hereby ordered to pay.

Damages of 36 months x $486,00			=	$17 496,00

Gratuity							=	$ 2 653,56

Notice pay of 3 months x $486				=	$ 1 458,00

Leave pay 							=	$    486,00

$22 093,56

The award on medical aid remains unaltered.

MATSIKIDZE AND MUCHECHE – Appellant’s legal practitioners

HUSSEIN AND RANCHOD & COMPANY – Respondent’s legal practitioners