Molanda Murombedzi & Anor v Tataguti Investments t/a Nola Creations

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/169/2014
HELD AT HARARE ON 11 FEBRUARY, 2014
CASE NO. LC/H/169/2014
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IN THE LABOUR COURT OF ZIMBABWE      	      JUDGMENT NO. LC/H/169/2014

HELD AT HARARE ON 11 FEBRUARY, 2014		   CASE NO. LC/H/523/2013

& 28 MARCH 2014

In the matter between:-

MOLANDA MUROMBEDZI						1st Appellant

And

WINNIE BHAZUVA							2nd Appellant

Versus

TATAGUTI INVESTMENTS t/a NOLA CREATIONS		Respondent

Before The Honourable B.T Chivizhe: Judge

For Appellants 	-	Mr B. Kanyemba (Trade Unionist)

For Respondent 	-	Mr G. Makings (Legal Practitioner)

CHIVIZHE, J.

The present appeal was noted against an arbitral award handed down on 4 July 2013 in which award the Arbitrator determined that the two Appellants were lawfully terminated from employment.

The material background facts to the matter are as follows:

The two Appellants were employed by the Respondent on the basis of successive fixed term contracts of employment of two months duration. The contracts were renewed periodically for about five years for both Appellants. The last such contract was terminated on 10 August 2012. The Respondent recalled the Appellants and other workers to work. The two Appellants were late in returning to work returning only on 2 September 2012 when others had already resumed work and signed their contracts. The two Appellants resumed work. Three weeks into the contract the Respondent discovered its omission in making the two Appellants sign contracts. When they were then asked to sign contracts the two Appellants refused on the basis that they now regarded themselves as being on permanent contracts. The Respondent subsequently advised the Appellants of the termination of their contracts on 19 October, 2012.

The parties initially explored the possibility of mutual termination of employment. When that failed the matter was referred to conciliation and subsequently to compulsory arbitration. The terms of reference for the Arbitration were:

“1.	To establish whether the termination of the Appellants’ employment was   lawful.

2.	To establish whether the said employees were entitled to a service package”.

The Arbitrator in his award found that the Appellants had rendered themselves unemployable when they refused to sign a contract. The employer had therefore lawfully terminated their contracts of employment. The Arbitrator further found that the Appellants were not entitled to any retrenchment packages as the issue of retrenchment did not arise. Finally, the Arbitrator found that the $90.00 tendered to the Appellants as a gesture of appreciation for the service rendered was adequate. The Appellants were aggrieved by the arbitral award and noted the present appeal against the arbitral award.

The grounds on which the appeal is premised are as follows:

“1.	The Honourable Arbitrator erred on a question of law in finding that the Applicants rendered themselves unemployable by failing to renew their contracts which expired and which had run for three weeks without being renewed.

2.	The Honourable Arbitrator erred on a question of law by declaring that ‘contracts are not cumulative, building on each like bricks on the wall but are independent from each other and as a results acceptance by two or more conscious people.’

3.	With all due respect, the Honourable Arbitrator strayed from the agreed terms of reference and dwelt on issues, which had no bearing at all to issue at hand.”

To the extent that Section 98(10) of the Labour Act [Cap 28:10] enjoins that an appeal against an arbitral award must be on a point of law, I am satisfied that the appeal raises issues of law. The first issue raised in my understanding is whether the Arbitrator erred in finding that the Appellants  repudiated their contracts of employment by refusing to sign the contracts.  The second issue raised is whether the Arbitrator erred in finding that there was no casualisation of labour as each contract entered into is independent of the other contract and that the contracts were entered freely and voluntarily into by the parties. The question of law there in my view is whether the continuous renewal of fixed term contract by the employer results in a permanent contract under the Labour Act.  I turn to address the points as raised.

The first issue raised in my understanding is whether the Arbitrator erred when he concluded that the appellants repudiated their contracts of employment by refusing to sign the contracts after the contracts had run for three weeks. My considered view is that the Arbitrator did not err in reaching that conclusion. A contract of employment was created between two parties when the Appellants accepted employment. Such employment was on the same terms as the previous fixed term contracts. The Appellants were provided with the contractually agreed work and rendered service. When however the Appellants were asked to sign the actual contracts of employment three weeks into the contract they refused to sign on the basis that their contracts had somehow mutated into permanent contracts. The Appellants clearly in my view repudiated their contracts by refusing to sign the contracts. Repudiation of contract entitles the innocent party to either terminate the contract or enforce the contract. The Respondent in this case elected to terminate (by way of dismissal). I cannot find any error in the Arbitrator’s conclusion on this point. The Appellants having repudiated their contracts of employment there was no need for the employer to terminate in terms of section 12 B (i) as suggested by the Appellants.

On the second ground the Appellants raised the point that the Arbitrator erred by not finding that the employer was guilty of casualisation of labour in that although the Appellants were employed on fixed term contracts of six weeks at a time, the contracts had been renewed continuously for a total period of service of five years for each of the Appellants.  It was the Appellants’ submissions that it was against public policy for an employer to casualise work of a permanent nature.  The Appellant referred to the Labour Court decisions in Rachel Kadzinga & 20 Ors  v   T.A. Davester Clothing LC/MC/02/2007 and Zimbabwe Bata Shoe Company  v Zimbabwe Bata Workers Committee LC/MD/24/2005 where the Labour Court held such contracts to be against public policy.  It was the Appellants’ further submission that the court should find against the background circumstances that the Appellants should have been deemed permanent employees by virtue of Section 12(3) of the Labour Act. The Appellants consequently prayed for the setting aside of the arbitral award and substitution with an appropriate order.

The second ground of appeal clearly has no merit. The Labour Act [Cap 28:01] provides for two different types of contract i.e. fixed term contract and contract without limit of time. Fixed term contracts by virtue of the provisions in Section 12 B of the Labour Act [Cap  28:01] refers to a contract which specifies duration in the contract at the expiry of which the contract terminates. The other contract is provided for under Section 12(3).  That Section reads as follows:

“(3)	A contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed to be a contract without limit of time:

Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months.”

There is clearly a difference in principle and effect between a fixed contract and a contract without limit of time. The Appellants have sought to argue that by virtue of Section 12(3) of the Labour Act an employee in successive fixed term contracts shall be deemed to be an employee on a contract without limit of time on the day that his period of engagement exceeds a total of six weeks in any four consecutive months. The Appellants clearly misread the provisions of Section 12(3). What is governed by the proviso to Section 12 (3) is a contract which does not specify its duration. This is the contract normally referred to as the contract without limit of time.  Under the proviso to section 12 (3) it is only a casual worker who is deemed to be a permanent employee on the day his period of engagement exceeds a total of six weeks in any four consecutive months.

The relationship between the parties in casu was based on a clearly fixed term contract. That contract cannot be equated to a casual contract or a contract without limit of time. A fixed term contract also does not graduate into a contract without limit of time where there have been several renewals of the contracts of fixed term as suggested. There is simply no legal basis for that proposition. None has been advanced by the Appellants. The argument by the Appellants clearly does not hold water and stands to be dismissed.

The Appellants have also sought to place reliance on the Labour Court decisions in Zimbabwe Bata Shoe Company v Bata Shoe Workers Committee and Rachel Kadzinga v T A Daveston Clothing referred to supra. As was pointed out to the parties the Zimbabwe Bata Shoe Company matter went on appeal to the Supreme Court. In a decision handed down in 2012 the Supreme Court dismissed the appeal on a technical basis that the Respondent in the matter, not being a legal persona, was not properly before the Court. The Supreme Court did not address itself to the merits of the matter. The issue as to whether the  continuous renewal of fixed term contracts results in  graduation of the contract into a permanent contract remains unresolved to date.

The Appellants have also in their oral and written submissions raised the issue of legitimate expectation on the basis that the Respondent employed two other persons to replace the Appellants. The Respondent does not dispute that indeed two people were engaged after the Appellants had refused to sign their contracts. The Arbitrator in his award dismissed the claim for legitimate expectation on the basis that the terms of the contracts entered into were such that no legitimate expectation would arise from the fact of non-renewal. In reaching this conclusion the Arbitrator had the benefit of the contracts of employment. In the absence of the actual contracts before me I am unable to determine otherwise this point. In any event having reached conclusion the Appellants repudiated their contracts, the Respondent was clearly entitled to engage replacements. I would therefore dismiss the point.

The last point raised by the appeal is that the Arbitrator strayed from the agreed terms of reference and determined issues which had no bearing at all to the issues at hand. The Respondent does not agree with the submissions. The record shows that in his award the Arbitrator was alive to his terms of reference. His findings were based on the terms of reference and to issues raised before him.  The Appellant having failed to prove to the court how the Arbitrator strayed from his terms of reference, I would also dismiss the point.

In the circumstances, the appeal is dismissed with no order as to costs.

G Makings Legal Practitioners, respondent’s legal practitioner