Peter Nyawo & Anor v Claude Neon Signs

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/464/14
HARARE ON 16th JUNE, 2014
CASE NO. LC/H/762/13
& 1ST AUGUST 2014
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IN THE LABOUR COURT OF ZIMBABWE	 JUDGMENT NO. LC/H/464/14

HARARE ON 16th JUNE, 2014				CASE NO. LC/H/762/13

&  1ST AUGUST 2014

In the matter between

PETER NYAWO & ANOR.			–	Appellants

And

CLAUDE NEON SIGNS				–	Respondent

Before The Honourable Kudya, J.

Appellants		: In Persons

For Respondent	: Mr D. Mugarisanwa (Human Resources Manager)

KUDYA,  J.

This is an appeal against the NEC Appeals Committee for the Engineering and Steel Industry’s decision to dismiss the Appellants’ appeal in a case which he and his colleague had claimed that they be paid retirement benefits from the Respondent company.  The benefits were said to have accrued over the period when the appellants were on the employ of the Respondent’s seller company.

Facts of the case are that the Appellants joined the employ of Addis Neon and Teunion Signs in 1966. These companies were subsequently bought by the now Respondent Claude Neon. Upon the purchase Appellant and his colleague were among the employees who were engaged by Claude Neon and made to sign new contracts with Respondent. When they eventually reached retirement age they sought to have Claude pay them retirement benefits for the period they used to be in the employ of Addis and Teunion.

Respondent spurned that request arguing that such claims had to be met by to the company which used to employ the Appellant i.e. Addison Teunion and that for its part Claude was only responsible for those benefits arising over the period when the Appellants were now in its employ. It was also its argument that the sale agreement between Addis and Teunion on one hand and Claude Neon on the other hand explicitly provided that the former employer/seller would clear all its obligations including its employees’ gratuities – see paragraph 7.2 of the Agreement of Sale filed of record. After Respondent’s refusal to pay, the Appellant brought an appeal against that decision to an NEC Appeals Committee for the relevant industry. The Appeals Committee upheld the refusal to pay by the Respondent. It is that refusal which prompted the Appellants to appeal to the Labour Court against the NEC Appeals Committee. It is primarily that appeal which is the subject matter of this judgment.

The grounds of appeal are as follows:-

Appeals Committee erred to hold that Appellants waived their rights to gratuity and terminal benefits upon signing new contract with Claude.

Contract of Sale between Addis and Claude stipulated that Claude would meet all Addis obligations hence Appeals Committee erred to hold otherwise.

Appeals Committee erred to decide the matter based on the Collective Bargaining Agreement for the relevant industry yet due to Appellants’ age and experience such was inapplicable.

In the result the Appellants prayed that the Appeals decision be set aside and that Claude be ordered to pay Appellants the benefits accrued during the tenure of the Addis contracts.

In response to the appeal the Respondent mentioned that;

Appeals Committee did not err in concluding that the appellants had waived their right to retirement benefits when they signed new contracts with Claude Neon.

Contract of sale of business between Addis and Claude explicitly provided that the seller in this case (Addis) would meet all the retirement benefits of its former employees up to the time of the sale of the company.

Appeals Committee was correct to use the Collective Bargaining Agreement for the relevant industry in deciding on the Appellants’ case as it was not inconsequential that they were aged and experienced considering the periods that they had worked for Addis and Claude.

In the result the Respondent prayed that the appeal be dismissed for lack of merit.

The law relating to appeals of this nature is clear See Nyahondo vs. Hokonya 1997 (2) ZLR 475 (SC).

It is clear from the cited case that the appeal court would only interfere with the exercise of the discretion of a lower tribunal if it is clear that the exercise of such discretion was grossly unreasonable or based on mala fides.

Applying the above principle to the facts of the case at hand the question to be decided by this Court is whether the findings made by the Appeals Committee can be said to be grossly unreasonable to warrant interference by the appellate court. Each ground will be addressed in turn.

Ground 1

As regards this ground it is common cause that the Appellants signed new contracts with Claude. Indeed where an employer takes over the employees of the seller company on a going concern basis it would be obliged to meet the former employers’ dues – see Section 16 of the Labour Act. This being as it may is not applicable if different intentions are expressly provided for by the sale agreement as happened in instant case. To that extent the Court does not find anything amiss in the Appeals Committee’s decision that Section 16 of the Labour Act did not apply here as it was expressly ousted by the paragraph ousting that duty from the buying company. In the result the Court finds no merit in this ground and it should accordingly fail.

Ground 2

This is intricately linked to ground 1 explained above. A reading of the documents filed of record shows clearly that the seller company undertook to settle all its obligations including the Appellants retirement dues. That the Appellant’s may not have been aware of the paragraph in question is no excuse as ignorance of the law cannot aid any litigant. The Court thus also does not find anything irregular by the appeals committee concluding that on the basis of the ouster paragraph the buying company (Claude) was not obliged to pay that part of retirement benefits which was for the period when the Appellants’ were still in Addis’ employ. This ground also lacking in merit should fail.

Ground 3

In respect of this ground the law is clear that an employee is bound by the Code of Conduct of the Industry within which he or she operates in unless where such is absent and where he/she then becomes governed by the Model Code. In the instant case the issues of the Appellants’ ages, experience or long service award did not put them out of reach of the relevant Industry Code of Conduct/Bargaining Agreement. The Court therefore is not convinced that the Appeals Committee erred by concluding that it was proper for the relevant Industry Code to be made to apply to the Appellants irrespective of their ages and experience.  In the result this ground also lacking in merit should fail. Ultimately all the grounds lacking in merit it means that the appeal should fail.

IT IS ORDERED THAT

Appeal lacking in merit in its entirety it be and is hereby dismissed.

Each party to bear own costs.

L. Kudya

JUDGE – LABOUR COURT