P.G. Industries (Pvt) Ltd v Susan Chawota

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/787/14
HELD AT HARARE 22ND OCTOBER 2014
CASE NO
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IN THE LABOUR COURT OF ZIMBABWE	       JUDGMENT NO LC/H/787/14

HELD AT HARARE 22ND OCTOBER 2014		CASE NO LC/H/747/12

& 21ST NOVEMBER 2014

In the matter between:-

P.G. INDUSTRIES (PVT) LTD			Appellant

And

SUSAN CHAWOTA					Respondent

Before The Honourable L.M. Murasi, Judge

For Appellant		Mr A.T. Muza (Legal Practitioner)

For Respondent		Ms S.Z. Takawira (Legal Practitioner)

MURASI, J:

Respondent was in the employ of the appellant.  The employment relationship was terminated by retrenchment.  The appellant decided to pay overtime wages due to respondent from the year 2009 to 2012.  Appellant declined to pay overtime wages for the period 2005 to 2008.  This resulted in the matter being referred to arbitration.

The Arbitrator ruled in favour of the respondent and ordered that the appellant to pay an amount of $10 269.00.  The appellant has appealed to this Court against this ruling.

The appellant’s sole ground of appeal is as follows:

The Arbitrator erred at law and misdirected herself when she ordered the appellant to pay the overtime allowances that accrued between the year 2005 and 2008 at the rates that did not apply at the time the said overtime allowances were accrued.  The allowances can only be claimed and paid for at the actual rates that applied at the time the overtime was worked.

It should be noted that appellant’s Counsel added another angle, during,

Argument in that the debt in question was prescribed.  Appellant’s Counsel submitted that the arbitrator had erred in awarding payment in United States Dollars when the debt had accrued in Zimbabwean Dollars. It was further argued that the Arbitrator had relied on the Fleximail case which had since been set aside by the Supreme Court.  It was further stated that the principle of currency nominalism was still part of Zimbabwe law.  It was further submitted that the Arbitrator had erred in using rates obtaining in 2012 when the debt had arisen between 2005 and 2008.  Appellant’s Counsel further argued that respondent could not state that appellant had agreed to pay the debt without attaching the agreement in question.  It was further stated that respondent had waived her right.  The debt in question had since prescribed.

Respondent’s Counsel stated that she largely abided by the Heads of Argument filed of record.  She submitted that following the decision in Horace Nzuma and Others v Hunyani Paper and Packaging (Pvt) (Ltd) S 137/11, calculation of debts or damages in Zimbabwean dollars should not be done.  Respondent’s Counsel further added that the calculations by the Arbitrator were for the labour rendered by the respondent.  As far as prescription was concerned, it was submitted that respondent became aware of the unfair labour practice when she was informed that appellant was going to pay for overtime wages from 2009 to 2012.  As far as the rates used were concerned, respondent’s Counsel submitted that the Arbitrator had used judicial discretion in arriving at the figure.

The Court will first determine whether the debt was prescribed.  As stated earlier, this was not included as a ground of appeal though it was raised before the Arbitrator.   The Arbitrator’s findings on this issue are as follows:

“In the matter at hand, the claimant first became aware that the employer was not in a position to pay the overtime as per agreement upon retrenchment.  I am of the view that because the employee was not aware of what the employer’s intentions were, then one cannot safely say that the matter is prescribed.”

The findings of the Arbitrator are supported by the evidence.  The facts

show that respondent was religiously  recording the hours worked overtime over the years.  Respondent’s explanation was that appellant had indicated that she would be allowed to take the days off after some time.  The continued overtime was necessitated by appellant’s need to computerise its operations.  Appellant apparently decided to pay the overtime wages due from 2009.  The Court inquired from appellant’s Counsel as to why appellant had made a decision to pay for part of the period which had prescribed according to that argument.  The response was that the appellant was at liberty to raise that defence as it was available to appellant.  Was the Arbitrator wrong in making the finding that she did?  I think not.  An appellate court can only interfer with the decisions of a lower court or tribunal where there is evidence of gross misdirection.  The Court is of the view that there was no misdirection on this point.

Appellant’s Counsel argued that the Arbitrator had relied on the Fleximail  case in making her ruling.  A reading of the award does not show that this is the case.  It was also argued that the main thrust of the Fleximail case was that currency nominalism was not part of Zimbabwe law and since this had been set aside by the Supreme Court, the Arbitrator had erred in relying on this.  The Court did not find any reference to currency nominalism in the Arbitrator’s decision.  The Arbitrator’s comments were that an order for payment of the overtime in Zimbabwe dollars would be improper in the circumstances.

What is currency nomination?  F.A. MANN in THE LEGAL ASPECT OF MONEY 4th ed, p 84 explains it thus:

“The nominalistic principle means that a monetary obligation involves the payment of so many chattels, being legal tender at the time of payment, as if added together according to the nominal value indicated thereon produce a sum equal to the amount of the debt.”

Which is simplified as:

“In other words, the obligation to pay $10 is discharged if the creditor receives what at the time of performance are $10, regardless of both their intrinsic and their functional values.”

I understand that in the law of money the intrinsic value of a unit of

money refers to the value of the material of which it is composed and a unit’s functional value is equivalent to its purchasing power, that is, the value of the goods for which it may be exchanged in the market – place.  That currency nominalism is part of Zimbabwe law is without doubt when one has regard to decisions in Makwindi Oil Procurement (Pvt) Ltd v National Oil Co of Zimbabwe (Pvt) Ltd 1988 (2) ZLR 484; Dzangare v Chivare and Another 1996 (1) ZLR 454 (H).  The nominal value of currency is the value it is designated by domestic law.  It is clear that the Zimbabwe dollar suffered a fate where its value was constantly changed by several “Currency Revaluation” Statutory Instruments.  This was a way of putting a “value” to the Zimbabwe dollar.  Put differently money, from an internal national perspective has precisely the value accorded to it by law.  The last such Instrument to accord the Zimbabwe dollar some value was one in terms of of the Presidential Powers (Temporary Measures) Act [Chapter 10:20].  However the measures expired and the Zimbabwe dollar at the present time is unsupported by any legislation.  This means that the Zimbabwe dollar remains redundant until such time as the authorities revalue the currency.  What does this mean?  In my view, this means that the current value of the Zimbabwe dollar is unknown.  Would it then be equitable to pay a debt using a currency whose value is unknown?

I am of the view that the answer to the question posed above lies in the decision of the Supreme Court in Madhatter Mining Company v Marvellous Tapfuma S 51/2014.  GWAUNZA JA had this to say at p 15 of the cyclostyled judgment:

“The effect of the order given in these two cases was to emphasize the position that it is the Labour Court  and not the Supreme Court which is endowed with jurisdiction to apply principles of equity in its determination of labour disputes.  The Labour Court’s jurisdiction to determine labour disputes on the basis, inter alia of equity, can be gleaned from the import of section 2 A of the Labour Act…”

The Learned Judge goes on to cite the relevant section.  The section provides that the purpose of the Act is to advance social justice and democracy in the work place.  Further, the other crucial purpose is to secure the

just, effective and expeditious resolution of disputes and unfair labour practices.  The Learned Judge reasons that the above principles as pronounced in section 2 A are important when determining the basis and formula for computing a debt suffered in Zimbabwe dollars, but claimed in foreign currency.  The Learned Judge goes on to state thus at p 16 of the cyclostyled judgment:

“This is particularly so where such damages, being owed to an employee, can no longer be paid in Zimbabwe currency realistically or in a way that gives due value to the employee.  The undeniable fact is that a debt is not wiped out by the mere fact that there has been a change to the realisable currency.  Equity would demand that a formula be found to give effect to the employee’s entitlement to payment of and the employer’s obligation to pay, the debt in question.”

I am of the view that the above cited paragraph settles the issue as to

whether appellant should pay respondent in United States dollars for a debt accrued in Zimbabwe dollars.  As stated elsewhere in this judgment, the Zimbabwe dollar currency does not have a value.  Would it therefore be equitable to pay the respondent in a non existent value.  As stated by Professor F.A. Mann, the obligation to pay a debt, say of $10 is discharged if the creditor receives what at the time of performance , are $10, regardless of both their intrinsic and their functional values.

The next question to be addressed is whether the Arbitrator was correct in coming up with the figures of USD10 249.00 that she did.  Did this figure amount to $10 that Professor F.A Mann refers to?  The Arbitrator’s decision is as follows:

“.. should be paid as was supposed to be paid at the current rates had the respondent not introduced the retrenchment.”

Whilst the Arbitrator’s reasoning is logical as appellant had opted to pay

the overtime wages using the current rates, was it equitable to make such an order?  The Court notes that the decision is not based on any provision of the law or practice.  I am of the view that the solution suggested by GWAUNZA JA in the Madhatter case (supra) is appropriate.  The Learned Judge proposes that a qualified financial expert should help in working out the formula for calculating the debt in question.

In conclusion, the Court finds that the appeal partially succeeds.  In the result the Court makes the following order:

The appeal partially succeeds.

The arbitral award of Honourable L Chibvongodze dated 15 August 2012 is hereby set aside.

The matter is remitted to the same Arbitrator for quantification using the multi-currency system.

The Arbitrator shall enlist the services of a qualified financial expert, to be agreed upon by the two parties, for the purposes of working out a formula for calculating the amount due as overtime for the period from 2005 to 2008.

The quantification should be held within sixty (60) days of this order.

There be no order as to costs.

Mawere & Sibanda, appellant’s legal practitioners

Mugugu & Takawira,  respondent’s legal practitioners