National Generics (Private) Limited t/a Greenwood Pharmacies v P.C. Chinzou and Two Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/06/2016
HARARE, 30 SEPTEMBER 2015
CASE NO.
JUDGMENT NO. LC/H/06/2015
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/06/2016

HARARE, 30 SEPTEMBER 2015	  		   CASE NO. LC/H/1157/14

AND 08 JANUARY 2016

In the matter between:-

NATIONAL GENERICS (PRIVATE) LIMITED		Appellant

t/a GREENWOOD PHARMACIES

And

P.C. CHINZOU AND TWO OTHERS				Respondents

Before Honourable R. Manyangadze, J

For Appellant 		-	Mr E.T. Moyo (Legal Practitioner)

For Respondents		-	Mr B. Diza (Legal Practitioner)`

MANYANGADZE, J:

This is an appeal against an arbitral award handed down by Honourable T.C. Sengwe on 9 December 2014.  The arbitrator ruled that the respondents were unlawfully dismissed and ordered their reinstatement to the appellant’s employment.

The brief facts of this matter are common cause.  The respondents were employed by the appellant on fixed term contracts of employment.  These were renewed monthly.  The respondents’ employment was terminated when the contracts were not further renewed in 2014.

The respondents lodged a complaint with a Labour Officer, alleging unlawful dismissal.  The matter was referred to arbitration, resulting in the arbitral award which is the subject of this appeal.  The grounds of appeal are summarised in paragraph 3 of the appellant’s heads of argument as follows:

“3.1.	That the learned arbitrator misdirected himself grossly on the facts and erred at law by failing to take into consideration a relevant fact namely that the employment contracts were of a fixed nature and therefore they could be validly terminated by expiry of stipulated period.

3.2.	That the learned arbitrator misdirected himself and erred at law in finding that the fixed term contracts of the Respondents herein had become permanent merely because they had been renewed frequently.

3.3.	That the learned arbitrator misdirected himself at law in the application of section 12 (3) to the circumstances of the matter.

3.4.	That the learned arbitrator grossly misdirected himself on the facts and erred at law in finding in the absence of evidence and without giving reasons that there had occurred a unilateral variation of the contract of employment for the 1st Respondent herein.”

In the first ground of appeal, the issue that falls for determination is whether the respondents’ contracts’ of employment were of a fixed nature.  If they were fixed, there is the related issue of whether they were validly terminated by their non-renewal.

The facts of the matter clearly show that the contracts in question were of a fixed duration.  They were renewed every month, for the two to three years during which the respondents were in the appellant’s employment.  Copies of the contracts for each of the respondents, are filed of record.  This fact and position is actually not in dispute.  The respondents signed contracts of employment of a month’s duration. They were thus fixed term contracts. The respondents lasted 2 to 3 years in employment by virtue of the monthly contracts being renewed continuously.  The employment relationship was terminated because there was no further renewal of the monthly contracts.

My understanding of the respondents’ argument is that they are not taking issue with the fact that the contracts were of a fixed term nature, which were renewed monthly.  It is stated, in paragraph 1 of their heads of argument;

“The duration of their employment was characterized by the continuous signing of monthly contracts up until the time Appellant decided to unlawfully terminate their employment.”

Their contention however, is that these contracts are covered by Section 12 (3) of the Labour Act [Chapter 28:01] (the Act).  This section provides as follows:

“................ 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 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 .........”

The respondents contend that the renewal of their contracts beyond a period of 6 weeks within a period of 4 consecutive months, turns them into permanent contracts of employment.  It matters not whether they are described as casual or fixed term contracts.  Mr Diza, for the respondents, stated during oral submissions:

“You look at the period of engagement.  Whether that is in a fixed term or not is neither here nor there.  Respondents were purportedly on contracts renewed every month.  It falls within the ambit of the work that aggregates to 6 weeks in 4 months.  The Section in 12 (3) was correctly applied.”

This was also the reasoning behind the arbitrator’s decision.  This is seen in paragraphs 6 – 8 of the arbitral award, wherein is stated;

“7.	In essence all their contracts where continuously renewed for a period of two years.  Claimants correctly relies on section 12 (3) of the Labour Act which regulates a scenario where an employee is continuously engaged as a contract worker for a period exceeding a total of six weeks.  It states that

“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...”

8.	It is clear that the Claimants where in constant employment for more than six weeks and for more than four consecutive months.  The moment they exceeded this period they ceased to be contract employees’ despite the fact that the Respondent made them sign monthly contracts.  The law deems them permanent employees by virtue of that provision.”

These paragraphs show the basis of the arbitrator’s decision.  They constitute the ratio decidendi of the arbitral award.  The respondent’s contention is derived from that reasoning.

I am unable to uphold that contention.  It reflects a fundamentally flawed interpretation of the law.  Section 12 (3), which the respondents’ heavily relied on, refers to or deals with, contracts that do not specify their date of termination.  It deals with contracts without limit of time.  In that category, class or genus of contracts where the duration is not fixed, casual or seasonal work is given special consideration.  It is deemed to be a contract without limit of time if it exceeds a total of six weeks within four consecutive months.

This is what the proviso to section 12 (3) is all about.  It is not referring to fixed term contracts.  They are simply not specified there.  Once a contract specifies its duration, I do not see how it fits into section 12 (3).  It has its own provisions, such as Section 12B (3) (b) of the Act, and section 5 (c) of the Labour (National Employment Code of Conduct) Regulations Statutory Instrument 15 of 2006.

As far as fixed term contracts of employment are concerned, the law was comprehensively and succinctly spelt out in Kundai Magodora and Others v Care International Zimbabwe SC 24/14. PATEL JA, at pages 5 – 6 of the cyclostyled judgment, stated:

“I now turn to the argument that the continual renewal of fixed term contracts over a period of time creates a legitimate expectation of re-employment or permanent employment.  This position, in its essence, was rejected by this Court in the Shamuyarira’s case (supra), the material facts of which are virtually identical to those in the present matter.  My reading of s 12B (3)(b) of the Act does not give me any ground for departing from that decision.  The plain meaning of that provision is that the employee on a contract of fixed duration must have had a legitimate expectation of being re-engaged upon its termination and that he was supplanted by another person who was engaged in his stead.  These requirements are patently conjunctive and the mere existence of an expectation without the concomitant engagement of another employee does not suffice.  I do not think that the courts are at large, in reliance upon principles derived from international custom or instruments, to strike down the clear and unambiguous language of an Act of Parliament.”

This is the applicable law, not section 12(3).  The application of Section 12(3) was misplaced.  Reference should have been made to section 12B (3) (b), and it be determined whether the conditions stipulated therein were met in the instant case.

The respondents’ contracts were terminated when there was no further renewal of the fixed term contracts.  That, according to the law, was the end of the matter.  The arbitrator seriously misdirected himself when he held that the termination constituted unlawful dismissal.  The appeal must in the circumstances, succeed.

It is accordingly ordered that:

The appeal be and is hereby allowed.

The arbitral award handed down on 9 December 2014 be and is hereby set aside.

The respondents shall bear the appellant’s costs.

Scanlen & Holderness, appellant’s legal practitioners

Wilmot & Bennet, respondents’ legal practitioners