Netone Cellular (Private) Limited v Johannes Makonese

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/857/14
HELD AT HARARE ON 25th SEPTEMBER, 2014
CASE NO. LC/H/251/14
AND 19th DECEMBER, 2014
JUDGMENT NO. LC/H/857/14
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IN THE LABOUR COURT OF ZIMBABWE	   JUDGMENT NO.LC/H/857/14

HELD AT HARARE ON 25th SEPTEMBER, 2014  CASE NO. LC/H/251/14

AND 19th DECEMBER, 2014

In the matter between:-

NETONE CELLULAR (PRIVATE) LIMITED			Appellant

And

JOHANNES MAKONESE							Respondent

Before the Honourable G. Mhuri, Judge

For Appellant	: Mr. C. Kuhuni (Legal Practitioner)

For Respondent: Mr. M. Nzarayapenga (Legal Practitioner)

MHURI J.:

On the 26th July, 2013 an arbitral award was issued which reinstated Respondent without loss of pay and benefits with effect from the date of dismissal.  If reinstatement was no longer possible, damages were to be paid over and above the back pay.   Parties were at liberty to approach the Arbitrator for quantification of the damages.

It is not in dispute that Appellant opted for the alternative, i.e. it was not going to reinstate Respondent but pay damages.  It is also not in dispute that parties engaged each other with a view to settling the matter out of Court.  Further it is not in dispute that the partiers reached an agreement that Appellant shall pay Respondent a sum of $277 148,39 as damages in lieu of reinstatement.  It is common cause that back pay calculated from January to August, 2013 and another sum of $118 611,42 were paid by Appellant to Respondent in compliance with the attempted settlement.

During the process and before a deed of settlement was signed, the parties reached a deadlock which resulted in Respondent referring the matter to the Arbitrator for quantification.  The Respondent was then claiming a total sum of $642 474.00 from Appellant.

The  Arbitrator  rejected  Respondent’s  claim  of $642 474,00 and issued an award ordering Appellant to pay a sum of $350 000.00 broken down as follows:- the agreed amount of $313 000,00 as damages and $37 000,00 as punitive damages.

Aggrieved by this amount, Appellant lodged an appeal with this Court arguing that the Arbitrator did not give any justification for arriving at the sum.  That the figure was arbitrarily plucked from oblivion.  That the award did not even take into account the amount already paid.  That by accepting the amounts paid, Respondent had waived his right to further claims.  That there was no basis for awarding punitive damages as Section 89(2)(c)(iii) of the Labour Act [Chapter 28:01] (The Act) does not apply to an appeal but an application in terms of Section 93(7) of the Act.

The relief sought by Appellant is the substitution of  the  amount  of  $350 000,00 with the amount of $277 148,39.

It is clear from the wording of the first award that back pay and damages in lieu of reinstatement were separate.  Backpay was not an issue before the Arbitrator as this was resolved by the parties.  The only issue that was before the Arbitrator for consideration was the quantum of damages in lieu of reinstatement.

Did the Arbitrator arbitrarily pluck the figure of $350 000,00? In order to come up with an answer one has to scrutinize the evidence placed before the Arbitrator and her analysis of the same.

Documents placed before the Arbitrator which capture the out of court negotiations show that the agreed figure was the sum of $277 148,39.  This amount was exclusive of back pay.  The letter of the 16th September, 2013 by Appellant’s legal practitioner to Respondent’s legal practitioner in which Appellant was offering 1 month salary for every year worked indicates that the offer was exclusive of backpay.

This was confirmed by Respondent’s legal practitioner in their letter of the 18th December, 2013.

By a letter dated 17th September, 2013 Respondent accepted the rate of 1½ months salary instead of the 2 months it had initially claimed.  This was the rate that the parties settled for and based their calculations on.

Consequently the parties drew up a deed of settlement which had a total sum of $277 148,39 as damages.

Except for the letter of the 18th December, 2013 by Respondent’s legal practitioner to the Appellant nowhere else is the amount of $313 000,00 mentioned.  Even in the parties oral submissions to the Arbitrator during quantification proceedings this figure is not mentioned.  It only appears in her award.

Without any justification as to how the amount of $313 000,00 was arrived at, I am persuaded by Appellant’s submission that the figure was plucked from oblivion.  To that end therefore it cannot be allowed to stand.

As regards punitive damages, I find that the Arbitrator erred in awarding them.

I do not accept Respondent’s submission that the Arbitrator did not rely on section 89 2(c)(iii) of the Act.  At page 13 of the record, the Arbitrator recorded as follows :-

“The claimant submitted that he is applying for punitive damages in terms of section 89 2(c)(iii) of the Labour Act ….  He pointed out that these are additional to the compensatory damages and applied for due to the reprehensibility of the Respondent’s conduct.”

The Arbitrator therefore awarded punitive damages upon application by Respondent in terms of the above section.

I find that the Arbitrator erred in awarding punitive damages.  Section 89 (2)(c) of the Act does not apply to proceedings before an Arbitrator such as the one in casu.

Section 93 (7) which gives rise to an application in terms of Section 89(2)(c) refers to matters before a labour officer where for some reason it has not been possible to refer the matter for compulsory arbitration or where a certificate of no settlement has not been issued.  It is under these two scenarios that a party may apply to the Labour Court for an order in terms of subsection (2)(c)of Section 89 for punitive damages.

Section 89 (2)(c)reads:-

“2.	In the exercise of its functions, the Labour Court may –

in the case of an appeal ……….........

in the case of an application made in terms of subparagraph (i) of subsection 7 of Section 93 ……………….

in the case of an application made in terms of subparagraph (ii) of subsection 7 of Section 93, make an order for ………………

back pay ………………

……………….

reinstatement ………………

Provided that

………………

………………

Should damages be awarded instead of reinstatement or employment as a result of an untenable working relationship ………………

punitive damages may be imposed.”

The application for quantification of damages which was before the Arbitrator was not as a result of the two scenarios mentioned above.

The Arbitrator therefore misdirected herself in proceeding in terms of Section 89(2)(c)(iii) to award punitive damages.  This part of her award is to be set aside in its entirety.

In the result, the appeal is allowed.  The arbitral award is set aside and substituted with the following

“that  Appellant  be  and  is  hereby  ordered  to  pay  Respondent  a  total sum of $277 148,39 being damages in lieu of reinstatement.

Less statutory deductions in terms of the law and less the amount already paid to Respondent in respect of damages.”

Kuhuni Attorneys–Appellant’s Legal Practitioners

Dube-Banda, Nzarayapenga and Partners–Respondent’s Legal Practitioners