Muedzo Nebarwe v Zimbabwe Power Company

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/345/24
HARARE, 25 JULY, 2023
CASE NO. LC/H/245/23
AND 26 AUGUST, 2024
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IN THE LABOUR COURT OF ZIMBABWE	JUDGMENT NO. LC/H/345/24

HARARE, 25 JULY, 2023	CASE NO. LC/H/245/23 AND 26 AUGUST, 2024

In the matter between-

MUEDZO NEBARWE	APPLICANT

And

ZIMBABWE POWER COMPANY	RESPONDENT

Before Honourable Chivizhe, J:

For Appellant:	Advocate S. Hashiti (as instructed by Caleb Mucheche and Partners)

For Respondent:	Mr. N. M. Phiri with Ms B. Mahuni (Legal Practitioners)

CHIVIZHE, J:

The delay  in hand down  of the judgement is  sincerely regretted. This is  an application for quantification of back pay/salary arrears and benefits. The application was filed pursuant to a judgment of the Supreme Court handed down on 24th November. The Supreme Court, through the judgment, allowed with costs the appeal against Applicant’s dismissal. As a result the court set aside and substituted this court’s judgment as well as the hearing officer’s determination of guilty on the charge as levelled. The Applicant was to be reinstated to his original position without loss of salary and benefits from the date of dismissal. In the event of reinstatement being no longer being tenable, the Respondent was to pay Applicant damages in lieu of reinstatement. The parties were further directed to negotiate and agree on the quantum of the damages payable within a month of the date of the court order failing which either party was to approach this court with an application for quantification on notice to the other party.

THE APPLICANT CLAIMS

The Applicant, through his Founding Affidavit, submits that given the reinstatement order by the Supreme Court he is entitled to be paid the amount of salary and benefits he would have earned save for the premature and wrongful termination of employment. He is therefore entitled to be paid the full value of his salary and benefits from the time of dismissal to the order of reinstatement. This is notwithstanding any changes in currency or the existing hyper- inflation period during the period.

The Applicant contends that  he was  employed by  the Respondent as  a Finance Controller. His salary and benefits were pegged in United States Dollars. At the time of his suspension the government having passed a law under reference Statutory Instrument 212 of 2019-The Exchange Control (Exclusive use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019 this effectively meant the transactions in USD or any other currency were prohibited. His USD salary has to necessarily be converted to the newly introduced local currency at the gazetted inter-bank exchange rate on the date of payment.

The Applicant further submits that during the relevant period various policy directives and Statutory Instruments were issued by Government with the latest instrument having been enacted at the time of filing of the present application. The Statutory Instrument legalized USD as a legal tender. The court has also been invited to take noted that the Respondent also adopted a remuneration framework through which the employees were being partially paid in USD, albeit such portion would be payable in the local currency at the prevailing inter-bank rate.

Based on this historical background the Applicant contends that equity and common sense would both suggest that the only way to determine the correct quantum of salary and benefits payable from 2019 would be to index the local currency portion to its USD equivalent as at the time each payment became due. It is on the basis the Applicant therefore enlisted the services of a firm of Chartered Accountants to prepare the schedules of salaries/ benefits and when they became due to him. The claims as presented are therefore calculated as from the time of wrongful dismissal i.e. October 2019- February 2023. The total cumulative claim is for ZWL$61,600,400.06

The claim covers the following specific items; Housing Allowance- ZWL$18,480,120.02 Retention Allowance ZWL$21,560,140.02

Responsibility Allowance calculated at 25% of basic salary ZWL$15,400,100,01

Representation Allowance calculated at 20% basic salary Cafeteria Allowance in the sum of ZWL$41,066,933.37 Covid 19 Allowance in the sum of ZWL$5,077,466.87 Cushion Allowance in the sum of ZWL$441,967.19 Airtime Allowance in the sum of ZWL$1,453,236.53 Bandwidth Allowance in the sum of ZWL$1,171,519.13 Electricity Allowance in the sum of ZWL$11,445,705.86 Annual Bonus in the sum of ZWL$6,160.040.01

Motor Vehicle Allowance in sum of ZWL$201,228,467.40

Medical Aid subscriptions withdrawn in the sum of ZWL$9,745,724.49

Groceries allowances in the sum of ZWL$1,822,721.63  Security Services withdrawn in the sum of ZWL$24,789,014.10 Gross salary in total of ZWL$430, 809,709.08

Holiday Grant in the sum of ZWL$43,080,970.91 Vacation Leave, in the total of ZWL$8, 193,515.15 Occasional Leave Days in the sum of ZWL$3,503,805.82

The Applicant’s prayer is for the court to grant an order in terms of the draft as filed.

THE RESPONDENT POSITION

The Respondent, through its Notice of Opposition, is opposed to the application for quantification of back pay/salary arrears. Through the Opposing Affidavit of Nobert Matarutse, the Acting Managing Director, the Respondent avers that, a point in limine has been taken on the basis that the Applicant has utilized a wrong form in filing his application. The Respondent contends that whereas the Labour Court Rules, 2017 provide for a party to utilize Form LC1 in filing such an application the Applicant in this case has utilised a form that is actually alien to the Rules of this court as it does not include the portion notifying the Respondent of its procedural right to file opposing papers within ten days. The Respondent’s prayer is that the application ought to therefore be struck off with costs.

The Respondent further submits, on the merits, that it took heed of the Supreme Court Order and through several correspondences with the Applicant it sought compliance thereof. The Applicant, however, has made it impossible for the parties to reach consensus. The Respondent contends that following its own quantification of Applicant’s salary and benefits they arrived at a gross of amount of ZWL$76,413,440.80 for the period covering October 2019 to December 2022. The salary reconciliation schedule was referred to Applicant through a letter dated 26 January 2023. The Applicant however had not furnished it with banking details to enable a deposit of the amount as tendered. The Respondent also disputes the claims as made by the Applicant which are attached as Annexure C to his application. The Respondent contends that the claims are not correct as they are not based on the correct legal principles on which quantifications are conducted. The Respondent also disputes the averments by the Applicant that his salary was pegged in United States Dollars at all times. The Respondent further contends that a new currency regime was introduced into the country’s laws in 2019. The effect of the change in currency was to make all assets and liabilities which were valued and expressed in United States Dollars at par with the Zimbabwean dollar at a parity rate of 1:1.

POINTS IN LIMINE

The Respondent essentially raised three points in limine. The first relating to the use of a wrong form was taken through the Notice of Response as referred to above. On the date of hearing of the matter, the Respondent, through Counsel conceded to an oral application for condonation as tendered by the Applicant’s counsel. The court duly extended condonation to the Applicant for the wrong form utilised in filing the application. In so extending condonation, the court was persuaded to take the approach as advocated in Mapondera and 55 others vs Freda Rebecca Gold Mine Holdings Limited SC 81/22 where the Labour Court was cautioned by the Supreme Court to, as much as possible, avoid dabbling in technical issues and focus more on ensuring that simple justice is done between the parties. The court also considered that in section 90A of the Labour Act (Cap 28:01) this court is endowed with a wider discretion than that obtaining in the ordinary courts of law. It is therefore not bound by rigid legal rules, formality and technicalities.

The Respondent having conceded to condonation being granted on the first point in limine proceeded to take a further two points in limine. The points had also been raised through the Respondent’s Supplementary Heads of Argument which were tendered on the date of

hearing. As the Supplementary Heads of Argument were being filed in clear breach of rule 26 of this court rules, the Respondent, through counsel, sought the appropriate leave from the court. The Applicant was not opposed to the application. Leave was duly granted to Respondent to place in the record the Supplementary Heads of Argument. The leave was granted on the condition that Applicant would also be granted an opportunity to file closing submissions at the end of proceedings in order to address in greater detail the  issues as taken in the Respondent’s Supplementary Heads of Agreement.

The second point in limine taken by the Respondent was that there was no cause for the application as filed. It was clear from Applicant’s Founding Affidavit that the application before the court was for quantification of back-pay/salary arrears and benefits arising from the Supreme Court judgment handed down on 24th November 2022. The Supreme Court order however indicated that the parties could only approach the Labour Court for quantification of damages in lieu of reinstatement after the parties had attempted and failed to agree on the quantum of damages. There had been no such attempt to agree on the quantum of damages. The Respondent’s contention was that considering back-pay is a component of damages, the Applicant ought therefore to have filed a composite application for damages in lieu of reinstatement rather than to take a piecemeal approach. Reference was made in the supplementary heads to Leopard Rock Hotel Co. (pvt ) Ltd vs Hilary van Beek SC 6/2000; Madhatter Mining Company vs Marvelous Tapfuma SC 51/14.The Respondent further contended that the Supreme Court order did not provide in any way for an application of the nature as before the court, that is an application for back-pay and salary. The Supreme Court order related only to damages in lieu of reinstatement.

The Respondent further extended the same argument in order to illustrate more fully that the Applicant had no cause. It was submitted that the Applicant through his Founding Affidavit, had indicated that he would be claiming back-pay/salary arrears as from the date of dismissal that is 1st of October 2019 up to February 2023. The Supreme Court judgment/order directing reinstatement was rendered on the 23rd of November,2022. It was Respondent position that the Applicant clearly had no cause for claiming back-pay for the period beyond the date of the order of the Supreme Court. The position had been outlined in Heywood Investments vs Pharaoh Zakeyo SC 32/113.

The third point in limine was that the Applicant had filed an Answering Affidavit in clear breach of the court rules as no such such affidavit is provided for anywhere in the court

Rules. Rule 26(6) of the Labour Court Rules,2017 clearly provided that no further pleadings would be filed after the Appellant/Applicant Heads of Argument have been filed except with the leave of court. The Respondent’s position was that the infraction of the rule warranted a striking off by the court of the Answering Affidavit as well as the Policy Document improperly annexed thereto as annexure A. The Respondent’s prayer was for the Answering Affidavit as well as Annexure A to be struck off. The Respondent contended that in any event the attachment of annexure A was highly irregular as the Applicant was by this action seeking to amend his pleadings in response to the opposing papers. In Ismail Moosa Lunat vs (1) Mohammed Zakariya Patel (2) The Deputy Sheriff SC 142/2021 the Supreme Court had also found such conduct to be highly irregular.

The Applicant, through Counsel, in counter, submitted that the taking of the second point in limine that the application was not provided for in the Supreme Court order was vexatious. The Supreme Court order was very clear in its import. It provided for reinstatement and in the alternative payment of damages in lieu of reinstatement. It was also conceded that the present application was being made only for back-pay. Counsel submitted that it was indeed common cause that back-pay whilst being a distinct and separate concept is also a specie of damages. The law was settled in Chiriseri and another vs Plan International 2002 (2) ZLR 261 of 265 where the court stated as follows;

“As this court stated in Leopard Rock Hotel Co (Pvt) Ltd v Van Beek, supra, at 245H-255A;

……‘backpay’ and damages are indeed different concept, but only in the sense that damages is a wider concept. It will normally include back-pay, but may include, for example, compensation for loss of promotion prospects, interest, and other elements as appropriate….”

The Applicant’s contention therefore was that the application fully complies with the Supreme Court order. The Applicant’s Counsel further submitted that the court also needed to take note that the Supreme Court order from paragraph 2(a) to (e) set aside and substituted the order of this court. It was therefore incumbent upon this court to seek to enforce its own order. This was the basis of the application. The circumstances of the case showed that the Respondent had failed to reinstate the Applicant. It was only proper for the Applicant to approach the Labour Court with his application for back pay and benefits. No other court had the power to deal with such an application The court also had the power to award the back-pay/salary arrears on the basis of its general powers under the Act. On the aspect of the claim going beyond the date of the Supreme Court order of reinstatement, Counsel emphasized that the Applicant ought

to have been reinstated as directed, the Respondent however had failed to reinstate him. On this basis the Applicant was making a claim for the whole period that the Respondent had failed to reinstate him. The claim therefore was extending up to when he filed the present application. Counsel also submitted that the issue is in any event one of evidence, the Applicant would be leading evidence on the period that seemed to extend beyond the order of the Supreme Court. The court will then make its determination based on the evidence as presented by the parties. On this basis the Applicant prayer was for the dismissal of the second point in limine.

In regards the third point in limine the Applicant’s position was that there had indeed been a procedural irregularity, the court was however being urged to lean more towards correction of the irregularity rather than dismissing the whole application. This principle was said to have been emphasized in Mapondera and 55 others vs Freda Rebecca Gold Mine Holdings Limited SC 81/ 22. It was the Applicant’s further submission that the court could on the basis of provisions in the rules condone the departure from the rules. The filing of the Answering Affidavit had been necessitated by the need to lead further evidence in view of the nature of the application being one for quantification of damages. It had to be noted that quantification proceedings by their nature require the leading of evidence they cannot be restricted to the filing of Founding and Opposing Affidavits only as is the case with the normal applications. It was also Applicant’s contention that the Respondent had, in any event, failed to point to any prejudice it would suffer were the Answering Affidavit to be allowed to be placed in the record of proceedings. The court actually stood to benefit more as it is bound to reach a more informed decision based on the additional evidence in the Answering Affidavit. The court was urged to extend condonation and allow the placing of the Answering Affidavit and the Annexure A in the record of proceedings.

In his reply, the Respondent’s Counsel, reiterated that the claim for back pay/salary arrears could only cover the period from October 2019 to November 2022 the date of the order of reinstatement by the Supreme Court. The authorities were clear on that point. Anything beyond that would amount to damages in lieu of reinstatement. There was therefore clearly no cause for the application before the court. On the issue of the Answering Affidavit Counsel reiterated that the rules of court were very clear. A party has to seek leave in order to file further pleadings outside the provisions of Rule 26(6). A party cannot on its own file the further leading and then seek for condonation from the court on the date of hearing. That would be manifestly unfair to the other party and the court. The case authority referred in Mapondera and 55 others vs Freda Rebecca Gold Mine Holdings Limited SC81/22 was also being

misapplied. The authority did not condone the flagrant breach of the court rules. The rules of court still needed to be adhered to slavishly. The Respondent’s prayer was for the Answering Affidavit and its Annexures to be struck off the record as they were clearly not provided for in the rules.

EVALUATION

After considering the submissions by the parties and upon perusal of the authorities as referred to the court finds that the second point in limine as taken by the Respondent is clearly merited.

In arriving at this position, the court considered as the first port of call the court order that was issued by the Supreme Court. The order reads as follows;

“ 1. The appeal succeeds with costs

2.	The judgment of the court a quo be and is hereby set aside and substituted with the following:- ‘The employee is found no guilty of contravening the provision of S4(a) of the Labour (National Code of Condone) Regulations 2006.’

The appellant is reinstated to his original position of finance manager for the Respondent without loss of salary and benefits from the date of dismissal.

In the event that reinstatement is no longer tenable, the Respondent shall pay the appellant damages in lieu of reinstatement calculated from the date of dismissal.

The appellant and Respondent shall negotiate and agree on the quantum of damages contemplated in para(d) of this order within one (1) month of this order in lieu of which other party may approach the Labour Court for quantification on notice to the other party”

It is indeed correct as, as contended by the Respondent that para 2(c) of the order directed reinstatement without loss of salary and benefits. On the basis of authority in Kuda Madyara vs Globe & Phoenix Industries (Pvt) Ltd t/a Ran Mine SC 63/02 reinstatement in this case was to have a retrospective effect. More importantly however paragraphs 2(d) and 2(e) in keeping with paragraph 2(c) provided for the event where reinstatement was no longer tenable. It is apparent from the wording of the order that reinstatement was expected to be with immediate effect and if it failed within the month then parties were to negotiate damages. The application for damages in lieu of reinstatement was to be made after the parties had attempted and failed to agree on the quantum of damages. From the facts in this matter there was no reinstatement within the time frame of a month as set by the Supreme Court. The parties also

attempted to negotiate at least on the backpay payable, albeit through correspondence between them. As the parties failed to reach a consensus on the backpay payable Applicant filed the present application for the court to quantify the damages in the form of backpay and benefits.

The issue that has been raised by the Respondent is whether such an application for quantification of backpay and benefits alone is competent in view of the provisions of the Supreme Court order referred to supra. The court’s finding is that the application is not a competent one. It is clear that the Supreme Court in their order made reference to a composite application for damages in lieu of reinstatement. They made no reference to back-pay and salaries as a specific stand alone.

Although the Supreme Court did not provide the reasons for the order it is eminently clear the basis of the order. The reason was alluded to by the Respondent Counsel in oral submissions. It is based on the position of law that although the concepts of back pay and damages are generally regarded as separate and distinct concepts the authorities are also clear that backpay forms a component of damages in lieu of reinstatement where an employee has not been reinstated. If, however, an employee is reinstated into employment then the employee is entitled to be paid his backpay. This position was laid down in Leopard Rock Hotel Company (Pvt) Ltd vs Van Beek 2000(1) 251 (SC) which was referred to by the Respondent as follows;

“Back-pay” is thus a concept associated with reinstatement. If an employee is reinstated, she will normally be awarded back-pay. If she succeeds in proving wrongful dismissal but is not reinstated, she will be entitled to “damages’’, a major element of which will be back-pay. Perhaps more correctly, one should say the damages will be assessed by reference to the back-pay lost. But here the back-pay will be limited to a period from the date of wrongful dismissal to the date by which she, could, with reasonable diligence, have obtained alternative employment. See Ambali supra and Myers supra.”

It is clear, in casu, that through paragraph 2(e) of their order the Supreme Court specifically referred to damages in lieu of reinstatement. The order as from paragraph 2(c) to

(e) is the substituted order of the Labour Court. It is also correct as contended by the Respondent that the position of law is clear that once it is established before this court that there was a wrongful dismissal the court will direct reinstatement or in the alternative payment of damages in lieu of reinstatement. This is the standard order issued by the court.

It is also important to underline that it is the position of the law, that where there is an order of reinstatement which shows retrospectivity was intended, as is the case in casu, the

damages to be paid in lieu of reinstatement must include back-pay and benefits. This position was clarified by Sandura JA in Oliver Chiriseri vs Plan International referred to supra. At

of the cyclostyled judgment he stated as follows;

“It is clear from the wording of the order that if the appellant had been reinstated they would  have been entitled to back-pay and benefits…I say so because the order makes	it clear that the reinstatement is to have a retrospective effect. As this court stated in Chegutu Municipality 1996(1) ZLR 262 (5) at 268 A-B; “…the word “reinstate” or “reinstatement’’ carries no automatic retrospective connotation either in ordinary language or in our legislation. Normally it means simply that the person concerned will be placed again in his/her former job. If retrospectivity is intended, one would normally look for additional words such as “with effect from the date of dismissal’’ or “with effect from a particular date in the past’’ or “with back-pay and all benefits from…(date)’’

Applying the test to the order of reinstatement issued by the labour relations officer…it is clear that retrospectivity was intended …

In my view, where the order of reinstatement indicates that retrospectivity was intended, the damages to be paid in lieu of reinstatement must include back-pay and benefits.”

In applying the principles as laid in the authorities referred it is clear that, in casu, retrospectivity being intended by the Supreme Court order the damages that ought to be paid must include back-pay and benefits. As the facts in casu clearly show reinstatement is no longer tenable the Applicant recourse lay in an application for damages in lieu of reinstatement which would necessarily include back-pay and benefits. No cogent reason has been placed before the court as to why the Applicant opted to apply only for back pay and benefits. The court was also not referred to any authorities where such an approach has been taken where there is an order for reinstatement with a retrospective effect. The court finding is that the present application not being premised on the terms of the relevant Supreme court order is improperly before the court.

On the aspect of the claim going beyond the date of the order of reinstatement the record shows that the claim is for back-pay and benefits from 1st of October 2019 the date of wrongful dismissal to 25th February 2023 a period that indeed extends beyond the order of reinstatement which was on 23rd November,2022. It is however the position of the law that backpay is limited from a period from the date of dismissal to the date on which the employee is reinstated. Backpay cannot be awarded in respect of a period after the date of order of reinstatement. The court was aptly referred by Respondent to Heywood Investments vs Pharaoh Zakeyo SC 32/13. On the basis of this position it follows that where a party is entitled to claim for a period

that goes even beyond the date of the order of reinstatement is when one is seeking for damages in lien of reinstatement. As outlined in Leopard Rock Hotel judgment referred to supra a litigant is entitled to claim as part of damages, for back-pay which will be limited to a period from the date of wrongful dismissal to a date by which one would have with reasonable diligence obtained alternative employment. On this basis it is the court’s finding that the 2nd point in limine as taken by Respondent is clearly merited. The application stands to be struck off on the basis that it has no cause.

In regards the third point in limine it is indeed the correct position as alluded to by the Respondent that the Labour Court Rules, 2017 do not make provision for an Answering Affidavit. Rule 26(6) of the same rules provide that no further papers may be filed after the filing of Heads of Argument, except with the leave of court. Rule 26 (6) provides as follows;

‘6) After the heads of argument have been lodged with the Registrar no further papers may be lodged without the leave of the Court.’

The Applicant in this case concedes to filing an Answering Affidavit without seeking and obtaining leave of court. The Applicant also did annex the Policy document to the Answering Affidavit which is marked Annexure A in a bid as submitted by the Respondent to amend his pleading as a response to the Respondent opposing papers. The submission was made by the Applicant that this court ought to take the approach as laid in Mapondera & 55 others vs Freda Rebecca Mine (Pvt)Ltd. It is the court’s considered view that condonation ought also to be extended to the Applicant. This is in view of the fact that the same indulgence was also extended to the Respondent for filing Supplementary Heads of Argument without leave of the court. Further the court accepts the basis laid by the Applicant for the filing of the Answering Affidavit, that, in view of the application being an application for quantification being evidentiary based, it became necessary for the Applicant to file the Answering Affidavit in order to place more evidence before the court. It is clear to the court however that the Applicant through the Answering Affidavit is raising new issues. In order to obviate any potential prejudice that the Respondent may suffer, the court is prepared to grant the Respondent an opportunity to respond to the averments as made in the Answering Affidavit. It is for this reason the third point in limine stands to be dismissed. In view of the earlier position taken, with respect to the second point in limine, the application stands to be struck off the roll with costs.

In the result the court order is as follows;

The first point in limine, having been conceded to by the Applicant, is upheld.

Condonation is therefore extended to the Applicant for utilizing the wrong form in filing the application.

The second point in limine being with merit is upheld.

The third point in limine is dismissed.

The application, not being premised upon the Supreme Court order, is improperly before the court, it is accordingly struck off the roll with costs.