Practical Action Southern Africa v Sylvia Makomva

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/157/2016
HARARE, 4 FEBRUARY 2016
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/157/2016

HARARE, 4 FEBRUARY 2016 			     	     CASE NO. LC/H/462/15

AND 18 MARCH 2016

In the matter between:-

PRACTICAL ACTION SOUTHERN AFRICA		-	Appellant

And

SYLVIA MAKOMVA					-	Respondent

Before Honourable L.M. Murasi, Judge

For Appellant	-	Ms P. Chakasikwa (Legal Practitioner)

For Respondent	-	Mr R. Matsikidze (Legal Practitioner)

MURASI J:

This is an appeal against the decision of the arbitrator.  The facts which are largely common cause are as follows.  The respondent was employed by the appellant on fixed term contracts which were renewed periodically.  Respondent’s last contract was to expire on 28 February 2014.  Prior to the termination of the contract, appellant wrote to respondent on 30 October 2013 advising her that her contract would not be renewed.  Another letter was written to respondent when she is supposed to have divulged internal information to outsiders.  Respondent later took her matter to the Labour Officer and subsequently to arbitration.  The arbitrator found in favour of the respondent.  Appellant took issue with this finding and has appealed to this court.

Appellant’s grounds of appeal are as follows:

The arbitrator grossly erred at law when he held that the respondent was unfairly dismissed in contravention of the National Employment Code, SI 15 of 2006.  The failure to review the respondent’s contract of employment did not constitute an unfair dismissal at all.  The learned arbitrator failed to appreciate that the contract of employment between the parties was of a fixed term nature expiring on 28 February 2014 and that same terminated by effluxion of time per SI 15/2006.

The arbitrator grossly erred and misdirected himself at law by holding that the appellant should follow retrenchment procedures in terminating the respondent’s contract of employment having terminated there was no basis upon which retrenchment procedures could have been followed.  The arbitrator therefore erred and misdirected himself in holding that the respondent violated section 12C of the Labour Act.

The arbitrator grossly erred and misdirected himself at law by ordering that the employee be reinstated and provided with back-pay.  The fixed term contract having lawfully terminated, there was no basis upon which the arbitrator could have ordered respondent’s reinstatement.  Furthermore all wages and benefits due to the respondent were paid upon the completion of her contract of employment.

Further, the order to reinstate is itself erroneous as it does not indicate the period viz, it does not state whether the respondent is to be reinstated for another fixed term period or for a period without limit of time.

The arbitrator grossly misdirected himself and ended up confusing issues when he found that respondent’s contract had been prematurely terminated when she was asked not to report for duty after 12 January 2014.  The issue of forced leave was not before the arbitrator and in any event the parties agreed that the employment contract terminated on 28 February 2014.

Ms Chakasikwa for the appellant, stated that she abided by the documents filed of record.  She submitted that there was a serious misdirection on the part of the arbitrator in making a finding that the dismissal of the respondent was in violation of SI 15 of 2006.  She further submitted that the finding that the appellant should have followed the retrenchment procedures was also not sustainable at law.  Ms Chakasikwa argued that the contract between appellant and respondent was for a fixed duration and on 28 February 2014, when it ended, it brought the employer/employee relationship to an end.  It was further argued that section 15 of SI 15/2006 sets out different models for termination of contract and these models are different and cannot apply at the same time.  It was submitted that the termination of a contract of a fixed term cannot apply at the same time as the retrenchment process.  In casu, it was argued, it could not be possible to utilize the retrenchment procedure on a former employee as respondent’s contract had terminated on 28 February 2014.

Ms Chakasikwa further stated that the letter written to respondent on 30 October 2013 was merely to confirm the impending termination of contract.  As far as the order for reinstatement was concerned, it was argued that the arbitrator was actually imposing on the parties a contract without limit of time which was contrary to the intentions of the parties.  Ms Chakasikwa further stated that the case of Magodora & Others vs Care International Zimbabwe SC 24/14 was instructive in the matter.

Mr Matsikidze for the respondent also stated that he abided by the documents filed of record.  He further stated that the letter written by appellant to the respondent which is dated 30 October 2013 advised the respondent of the abolition of her post.  It was submitted that the notification of the abolition of the post meant that there was job loss.  This job loss, it was argued, was for financial reasons and clearly therefore a retrenchment.  Mr Matsikidze stated that this was the finding of the arbitrator.  It was argued that the giving of the reasons for termination by appellant amounted to retrenchment.  He relied on decisions in the Mabhena vs P.G. Industries HH 115/2002 and Mutare Board & Paper Mills (Pvt) Ltd vs Kodzanai 2000 (1) ZLR 641 (S).  As far as the period of reinstatement was concerned,  Mr Matsikidze submitted that if no period of employment was given, it was presumed that the terms and conditions of the previous employment contract applied.

The main contention in this matter is whether the contract terminated due to effluxion of time or that the letter written by the appellant required the latter to follow the retrenchment route as provided in section 12C of the Labour Act [Chapter 28:01]. A determination of this issue will resolve the matter in this case.

The letter dated 30 October 2013 reads as follows:

“We wish to remind you that your contract of employment expires on 28 February 2014.  Unfortunately, Practical Action is no longer in a position to renew your contract upon its expiry.

This has been necessitated by an overhead structure which we are no longer able to sustain financially.

The Human Capital and Administration Manager is being abolished and therefore we are not in a position to renew your current employment contract on expiry.  Accordingly therefore, your employment relationship with Practical Action will come to an end on 28 February 2014 per section 5 (d) of S.I. 15 of 2006.”

Section 5 (d) of S.I. 15 of 2006 provides:

“5.	No employer shall terminate a contract of employment with an employee unless –

(d) the employee was engaged for a period of fixed duration or for the performance of a specific task and the contract of employment is terminated on the expiry of such period or on the performance of such task.”

Mr Matsikidze submitted that the giving of the reasons for the abolition of the post by the appellant meant that the appellant was reorgainising the workplace and thus the retrenchment route was to be followed.  He further submitted that this would bring the matter into the league of the Mutare-Board case (supra) and the Mabhena case (supra).  I should hasten to add that those cases are clearly distinguishable from the present case as the present one deals with a fixed term contract.  The cases sought to be relied upon by Mr Matsikidze were different.  The persons in that case were employed on contracts without limit of time.  During the hearing the Court enquired of Mr Matsikidze whether the letter dated 30 October 2013 had the effect of amending the contract between the parties.  He did not have a ready response to the enquiry save to reiterate the fact that it brought the issue of retrenchment into the spotlight.

What is the import of the letter written by appellant?  The letter “reminds” the respondent of the termination of the contract on 28 February 2014.  The letter also informs the respondent that appellant would not be renewing the contract upon its expiry.  What then is the law on the issue regarding the termination of fixed term contracts?  Appellant’s Counsel relied on Magodora & Others vs Care International Zimbabwe SC 24/14.  In that case Patel JA dismissed the issue of termination of fixed term contracts and the application of section 12B (3) (b) of the Labour Act [Chapter 28:01].  The Learned Judge further outlined what a fixed term contract entails in that even if the fixed term contract is renewed several times, it does not mutate into a contract without limit of time.  The issue of the requirements of public policy in respect of contracts was also discussed.  To this end the Learned Judge had this to say:

“In principle, it is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted, even if they are shown to be onerous or oppressive.  This is so as a matter of public policy ... Nor is it generally permissible to read into the contract some implied or tacit term that is in direct conflict with its express terms.”

In my view the letter of 30 October 2013 did not have the effect of amending the original contract and the parties were thus bound to give effect to this contract.

I share the view of appellant’s Counsel that retrenchment essentially entails a premature termination of an employment contract.  Where a contract of employment is prematurely terminated that employee would be entitled to packages commensurate with such a termination.  There is a clear difference with the facts of this case.  The contract was terminated due to effluxion of time.

The arbitrator’s finding shows that he acknowledged that this was a fixed term contract.  The arbitrator thereafter made a finding that “Respondent’s action also violated Statutory Instrument 15 of 2006 which provides for procedure to be followed when terminating contracts of employment.” The arbitrator clearly fell into error.  The letter written by the appellant shows that it reminded the respondent about the impending ending of the contract of employment.  The letter went further to identify which law was applicable in such termination.  The letter stated that the termination was in accordance with section 5 (d) of S.I. 15/2006.  The requisite section is cited elsewhere in this judgment and it provides for termination of fixed term contracts.  Was the finding by the arbitrator that the appellant “violated” the provisions of SI 15/2006 correct in the circumstances?  I think not.  It is my view that this erroneous finding led the arbitrator to conclude that the retrenchment route should have been taken.  It was not a correct finding.

Is it always correct that where there is a re-structuring and re-organisation at the work place, retrenchment should necessarily follow?  I think not.  I shelter behind the words of Malaba JA (as he then was) in Chirasasa & Others vs Fidelity Life Assurance of Zimbabwe (Pvt) Ltd SC 135/02.  In that case the Learned Deputy Chief Justice was commenting on situations where an employer terminated a contract of employment on notice.  He had this to say about reasons for termination at page 20 of the cyclostyled judgment:

“The appellants perhaps failed to appreciate that a contract of employment cannot remain static throughout the whole of its existence regardless of the changes in the fortunes of the business.  Refusal to accept a change in the terms and conditions of employment necessitated by the commercial interest of a business may be good enough reason for terminating a contract of employment on notice.”

In casu the appellant’s letter dated 30 October 2013 informed the respondent that a change in appellant’s financial fortunes necessitated that it re-considers renewing respondent’s contract of employment.  This contract was in fact due to expire on 28 February 2014.  It is my view that the finding by the arbitrator, having regard to precedent on the matter cannot be supported and should not be allowed to stand.

In conclusion the Court finds that the appeal has merit and should be allowed.

In the result the Court makes the following order:

The appeal, being with merit, is allowed.

The arbitral award of Honourable Gabilo dated 11 May 2015 be and is hereby set aside.

That each party bears its own costs.

Kantor & Immerman, appellant’s legal practitioners

Matsikidze & Mucheche, respondent’s legal practitioners