Preedon (Private) Limited v Priviledge Kapesi and 120 Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/187/25
CASE NO
---------


IN THE LABOUR COURT OF ZIMBABWE

HARARE, 11TH SEPTEMBER, 2024 AND

9THMAY,2025

JUDGMENT NO LC/H/187/25 CASE NO LC/H/503/24

PREEDON (PRIVATE) LIMITED	APPELLANT

And

PRIVILEDGE KAPESI AND 120 OTHERS	RESPONDENTS

Before the Honourable Chivizhe, Judge:

For Appellant	Ms B.R. Rupapa – (Legal Practitioner)

For Respondents	Mr E. Kujenga

CHIVIZHE, J:

This is an appeal against a determination of the Arbitrator, E.R. Munemo N.O. dated 16th April 2024. The appeal is opposed.

BACKGROUND FACTS

The employees at the time of approaching the Arbitrator were still employed by the employer. They fell under the National Employment Council (NEC) for the Brick Making and Clay Products Industry. The NEC gazetted wages during the month of May gave the employer an option to pay salaries in RTGS using the prevailing interbank rate at the date of running the payroll. A dispute ensued between the parties as regards the rate utilised to calculate the salaries by the employer. Upon failure by the parties to settle the matter was referred to the Arbitrator.

PROCEEDINGS BEFORE THE ARBITRATOR.

The issues referred for determination were two:

Whether or not there was underpayment of wages for May 2023.

The remedy thereof.

The matter was set down on 4th of December, 2023 and both parties were represented. The parties were then given timelines to file written submissions prior to the hearing.

The now Appellant (Respondent before the Arbitrator) raised two points in limine firstly, that the claimants had sued a non-existed entity. The claimants had registered the dispute against Preedon Bricks when the actual name of the company was Preedon (Pvt) Ltd. On the second point in limine, the Appellant submitted that the Trade Union Association Bricks, Clay Products and Allied Workers Union of Zimbabwe did not have authority from the claimants to represent them. It was contended that some of the claimants with specific numbers, as reflected in the award, had declared in writing that they had not authorised the union nor engaged the union to file any claims on their behalf. Both points in limine were opposed by the Respondents.

In resolving the first point in limine the Arbitrator noted that the Appellant had furnished proof of its real name being “Preedon (Pvt) Ltd. He further noted that the issue was however a minor technicality which was not sufficient to vitiate the proceedings before him. He also observed that the Appellant had in their papers also committed a similar error in reference to the Trade Union. He therefore found that the miscitation was an irregularity which could be corrected in the proceedings.

On the second point in limine he noted that he had actually called the individual claimants on their phone numbers and requested for the signed consent forms which were duly presented. The respondents indicated that they had indeed given a mandate to the Trade Union to represent them. On this basis the Arbitrator found the evidence as tendered by the Respondents to be valid. He, on the other hand, dismissed the evidence tendered by the Appellant in the form of one collective letter purportedly written by all the claimants. He dismissed it on the basis that it was written in second person language. More particularly it stated as follows;

“The following employees did not engage the union….”

The Arbitrator as a result handed down an award on the preliminary points in the following terms:

“AWARD ON PRELIMINARY POINTS

Citation of the case was corrected during the hearing and the matter proceeded with no costs to any party.

The Trade Union Association Brick, Clay Products and Allied Workers Union of Zimbabwe was given mandate by the claimants to represent them on this claim and shall proceed to do so.”

On the merits, after considering the submissions by both parties the Arbitrator made the following findings. That the Appellant had paid the Respondents on the 2nd of June, 2023, 14th of June, 2023 and the prevailing official rate of exchange for the particular dates were as follows;

2 June 2023	$2670.0225

14 June 2023	$5975.6794

The Arbitrator also noted that the Respondents were not given payslips as required under the provisions of Section 24(3) of S.I. 156 of 2020 which provides as follows:

“all remuneration shall be paid in cash or cheque and shall be accompanied by a payslip showing. ”

The Arbitrator also noted that the deposits made into the Respondent’s bank accounts were indicating National Employment Council salaries for May 2023. There was however no breakdown to show which amount was for basic salary and which was for allowances, the payroll after all indicated two separate columns for each item. The Arbitrator opined that this evidence was crucial to help him determine if Respondents were paid their basic salary or not.

He referred to Nalomwe vs Van Hoogstraten HH 444/18 where the court therein stated that “Evidence in civil proceedings must carry a reasonable degree of probability but not so high as is required in a criminal case.”

The Arbitration concluded that no evidence having been tendered by Appellant in proof of the payments made towards salaries the degree of probability had not been met in this case. The Arbitrator also addressed the submission by Appellant that the full amounts due to all the claimants had been paid. He noted that the Appellant had also during calculations done in the proceedings added ‘Housing and Transport Allowance’ to make the total paid to Respondents. He also observed that the Appellant had claimed that some payments had been made in cash.

He however was unable to interpret the documents submitted in proof of the payments made as the documents were written in Chinese. Some documents were also written “discharge for Sunday.” The Arbitrator found that that evidence tendered in proof of cash payments

appeared to relate to some other payment for work done on a Sunday which was paid at the rate of $10 USD per day and the payments were towards production targets.

The Arbitrator noted that at law there is a difference between payment towards basic salary, payment for overtime and an incentive production bonus. His view was that the issues in dispute before him, being centred on the basic salary, he was not satisfied that the total amounts paid into the Respondent’s accounts were the totals for basic salaries. The absence of a payroll, payslips and pay sheets signed by the Respondents compounded the issue as he was unable to calculate who was paid what amount and for what. The oral submissions as made before him had also shown inconsistencies with the payroll.

The Arbitrator noted as a last point that the RTGS payroll was run on 14th of June, 2023. The Collective Bargaining Agreement in S.I. 156 of 2020 clearly indicated that payments in RTGS had to be at prevailing interbank rate on the date of running of payroll. The purpose, according to him, was to preserve and hedge the value of the amounts paid against inflation. On that basis he dismissed the explanation tendered by the Appellant for failing to calculate using the rate on the 14th of June, 2023. The explanation tendered was that there had been a strike on the particular day as evidenced by a video submitted to him by the Appellant. The Arbitrator’s view was that the video did not prove, on a balance of probabilities, that there had been such a tense environment at the workplace as to prevent the payment of salaries on the day. He also found there was no cogent reason why payment was not made in full on the 2nd of June, 2023 by the Applicant.

Having arrived at this conclusion the Arbitrator rendered an award in the following terms:

“1. The Respondent to calculate all basis salaries for the claimants using the official exchange rate of converting USD to RTGS interbank rate of 14th of June, 2023 within 30 days from the date of receipt of this award.

The Respondent to pay the claimants all shortfalls which emanate from the calculations using the official exchange rate of converting USD to ZIG interbank rate of the day of running the payments.

If parties fail to agree on the calculations they can approach this authority for quantification.”

PROCEEDINGS BEFORE THIS COURT

The Appellant was aggrieved with the award by the Arbitrator. They noted the present appeal based on the following grounds:

The Tribunal a quo misdirected itself at law in making a finding that the miscitation of Appellant was a minor technicality which did not warrant the termination of proceedings.

The Tribunal a quo misdirected itself at law in proceeding mero motu , to amend the miscitation of Appellant, which was a nullity and without any application for an amendment having been made by Respondents.

The Tribunal a quo grossly erred and misdirected itself on the facts by concluding that Respondents were entitled to payments for alleged underpayments .Such a finding was not supported by documentary evidence and witness evidence presented before the tribunal aquo it is a gross misdirection on the facts that is so serious such that no reasonable court applying its mind to the facts would have arrived at such a decision

PARTIES SUBMISSIONS

Both parties were represented on the date of hearing. Upon an application by the Appellant, which application was not opposed by the Respondent, the court duly granted the application filed as a chamber application under reference LC/H/684/24. An order for the upliftment of the bar operating against the Appellant for late filing of Heads of argument of the Appellant was granted in terms of Rule 26(2) of Labour Court Rules, 2017. The heads of argument which had been attached to the chamber application were deemed to be properly filed in the present matter.

The legal practitioners then both made submissions only on the one ground of appeal relating to the miscitation of the Appellant before the Arbitrator. They both chose to adhere to their respective heads of arguments in relation to the rest of the grounds of appeal. I turn to address the first ground.

IMPROPER CITATION OF APPELLANT

The Appellant submits that its improper citation in the arbitration proceedings as “Preedon Bricks” amounted to citation of a non-existing entity, therefore the proceedings amounted to a nullity. The miscitation ought to have resulted in the arbitration proceedings being terminated on that basis. The Appellant further submits that the defect in the citation had been brought to the Respondents’ attention well in time. The Respondents however refused to rectify the error. They also failed to place an application for amendment before the Arbitrator, even though, so it is contended, this was not going to have any legal effect. The Appellant further submits that on the date of hearing the Arbitrator, when the issue was raised with him, took it upon himself to change the citation without any application for amendment having been placed before him. The Appellant contends that this was not only unprocedural, it was also a clear act of bias on the part of the Arbitrator. It was not his duty to correct the citation. He ought to have remained impartial. The Appellant contends that there are several authorities in this jurisdiction that have reiterated the position that a miscitation of a party renders the proceedings a nullity. The Appellant has referred to JDM Agro Consult and Marketing (Pvt) Limited vs Editor, The Herald and Another 2007 (2) ZLR (H) 75-B-D where Gowora J (as she then was) stated as follows:

“It is pertinent to state from the outset that the application to amend the summons by altering the name of the Second Defendant … was without effect… That is a registered company, duly incorporated under the laws of the country. It’s coming into being is due to the process by which it was incorporated as such. It is then after incorporation, that it becomes a juristic person, capable of suing and being sued in its own right. Without that process it is non-existent. Consequently the plaintiff issued summons against a non-existent being.

Consequently the plaintiff issued summons against a non-existing being. The amendment to the Second Defendant’s name therefore was of no force and effect as the summons itself was a nullity.”

Reference has also been made to Gariya Safaris (Private) Limited vs Van Wyk 1996

(2) ZLR 246 H. In JDM Agno Consult and Marketing Limited vs the Editor and Others, referenced to supra, where the court had observed that it was irrelevant that the matter had been responded to by the other party, as that act would still not imbue the summons with legality. Reference was also made to Cilliers, Ac et al in Herbstein and Van Winsen’s Civil Practice of the High Court of South Africa 5th Edition Vol 1 at page 143 where it reads:

“Before one cites a party in a summons or in application proceedings it is important to consider whether the party has locus standi to sue or be sued (legitima persona stand in judicio) and to ascertain what the correct citation of the party is.”

The Appellant contends that on the basis of these authorities the proceedings before the Arbitrator were a nullity and ought to have been dismissed. In oral submissions Ms Rupapa distinguished the facts in this case from the facts in the Mapondera and 55 others vs Freda Rebecca Gold Mine Holdings Limited 81/22 which matter was relied upon by the respondents to justify the Arbitrator’s action. She noted that the Supreme Court in that matter had emphasised that the claimants in that case were not penalised on the issue of the miscitation as the miscitation had been caused by the conciliator who had referred the case to the Arbitrator. Mrs Rupapa emphasised that in this case the miscitation was from the Respondents themselves. They had even refused/neglected to correct the error even after the error was brought to their attention. They had also made no application for amendment before the Arbitrator. In the Mapondera Case an application had clearly been made for an amendment. The Appellant position was therefore that the matter was therefore improperly before the Arbitrator on the basis of the miscitation.

The Respondent position, per contra, is that the name “Preedon Bricks” was initially referred to in the papers as it is the Appellant trading name. The reference was therefore not to a non-existing entity. The Respondent further submit that on the basis of the Section 12(2) of the Labour Act (Cap 28:01) an employer is obliged to inform the employee of its name and any other relevant information. It is Respondent’s position the Appellant cannot seek to benefit from its own inaction as that amount to a violation of the law. The Respondent also contends that the Respondent has not shown or indicated any prejudice it stood to suffer as a result of the miscitation.

The Respondent also contends that the Arbitrator was correct, he did not misdirect himself in any manner in concluding that the issue of miscitation was a minor technicality. The Arbitrator was also correct in referring to the authority in Zimbabwe Platinum Mines (Pvt) Ltd vs Ronald Godide SC 174/12 where the Supreme Court had restated the position of the law as follows:

“The law is settled that labour disputes should not be delayed through the consideration of a technical nature but should be resolved on substantive issues.”

The Respondent has also emphasised that the miscitation was in any event attended to through a correction, the matter had then proceeded to the merits resulting in a determination. The Respondents have referred to Dalny Mine vs Banda SC 39/99, Proton Bakery (Pvt) Ltd v Takaenda SC 126, Chidembo vs Bindura Nickel Corporation Ltd SC 35/15 as having laid the principle that a party should not escape liability or consequences of his/her actions on the basis of such omissions and commissions. On this basis the Respondent’s prayer is for the ground of appeal to be dismissed.

In assessing the parties submissions on this ground, it is apparent, that, the Respondents have essentially presented a three-pronged argument, firstly, that it was a minor technicality, secondly, that the Arbitrator could correct the citation in the circumstances, thirdly, that the matter being a labour matter the law is settled that disputes should not be settled on technical issues but on the merits.

What is the legal position regarding wrong citation of a party in labour matters? The position was laid in the Edmore Mapondera and 55 others vs Freda Rebecca Gold Mine Holdings Limited SC 81-22 where Bhunu JA cautioned on the most critical matter to consider when dealing with an issue of wrong citation. He stated as follows:

“Generally speaking, it is undisputable and a matter of trite elementary law that one cannot sue a non-existent person. In the leading case of Gariya Safaris (Pvt) Ltd vs Van Wyk (1996 (2) ZLR 246 (H) the High Court had occasion to remark that.

”A summons has legal force and effect when it is issued by the plaintiff against an existing legal or natural person. It there is no legal or natural person answering to the names written in the summons as being those of the defendant, the summons is null and void ab initio.”

In the very same judgment the Honourable Judge Bhunu also deplored the obsession by legal practitioners with legalise and urged the adoption of a robust approach by the court. He stated this at paragraph (24);

“It is therefore clear from authorities that the primary function of the court a quo is to do simple justice between the parties without dwelling too much on legal technicalities. It is also self-evident that the general courts of law are beginning to mellow and drift towards the idea of correction of simple procedural errors in order to do real and substantial justice.”

My finding on this ground is that the miscitation in this case was indeed a minor one. The Respondent in their papers had referred to Preedon Bricks which was the trading name instead

of Preedon (Pvt) Ltd. The Respondents in this case had not cited a non-existing entity. They had cited the Appellant trading name. The Appellant itself had presented documents to show its correct appellation. The Respondents clearly ought to have applied immediately for the correction, one would certainly expect the Appellant not to have objected in such circumstances. There was however no such application made. The Arbitrator could also have proceeded to request both parties attitude to the name correction. He clearly did not. As submitted by the Respondents the issue becomes one of prejudice, what prejudice did the Appellant suffer as a result of the Arbitrator’s clear robust approach given the circumstances. The Appellant, has failed, before this court, to prove/establish any prejudice suffered. The first ground of appeal must clearly fail.

UNDERPAYMENT OF WAGES

The Appellant submission under the second ground is that the Arbitrator misdirected himself in finding that there were underpayments. It was correct that Statutory Instrument 156 of 2020 as amended provided the wage at USD $140.00 or equivalent at the interbank rate of exchange on the day running of payroll. In this case the payroll was run on the cut-off date being 31st May 2023. There were two reasons for the delay attributable to the Respondent. Firstly, that there were some new employees who had not submitted bank information. Secondly, there were chaotic incidences on the 5th, 6th and 8th June 2023 which had caused the delay.

The Respondents on the other hand submit that the National Employment Council Brick Making and Clay Products Manufacturing Industry agreed to increase wages for the period March 2023 to June 2023. According to the Statutory Instrument 156 of 2020 as amended by CBA dated 17 March 2023 the “minimum wage was set at USD $140.00 or equivalent at interbank rate of the day of running payroll.” The Respondents contend that the clear intention of the legislature was to preserve the wages from being eroded by inflation through that provision.

In this case the payroll was run on 31st May 2023 using an interbank rate of 1 USD to 2 500 RTGS. That position was not contested by the Appellant. The Appellant however paid the employees the RTGS component on 14th day of June, 2023 when the rate had escalated to 1 USD$ 6596.756 which was the rate of 31 May 2023. The Respondents were therefore claiming underpayment in the amount of $19102.08 in total. The USD component of the wages

was also paid on 2nd June 2023. The Respondent position is that the Arbitrator was therefore correct in his conclusion reached.

The Arbitrator on this point had concluded as follows:

“The rtgs payroll was done on the 14th of June, 2023 and as such the Respondent is expected to have paid the claimants using the rate of the day. The Industry CBA S.I. 156 of 2020 as amended states that payments in rtgs should be done at the prevailing interbank rate on the day of running payroll. It is trite for parties to understand that the day of running payroll is the actual day when payments are done to the respective recipients not the day when employer decides to calculate and lock in value for employee’s salaries until they decide to pay after the money has lost value. The purpose of having the money is to preserve the value against inflation. The Respondent in this case should have calculated the salaries using the rate for the 14th of June 2023. The argument that there was a strike which disturbed operations as indicated on a video which was submitted is a nullity in that the video actually shows employees and their representatives having a meeting in a room. Nothing proves on a balance of probabilities that the situation was tense to prevent payment of salaries and when they did payments on the 2nd of June, they could have paid all employees in full”

The remarks by the Arbitrator aptly captures the essence of Respondents claim before him. He therefore cannot be faulted for arriving at the conclusion reached that the Appellant had indeed underpaid the wages for May 2023 by utilising a lower interbank exchange rate to the official Reserve Bank rate on the date of payment. The second argument by the Appellant that there was a strike resulting in delays in payment was also dismissed by the Arbitrator. As is evident from above he dismissed the argument on the basis that the evidence as tendered by the Appellant before him, did not prove a chaotic scenario as suggested. The Arbitrator had the distinct advantage of having the actual evidence in the form of the video placed before him. This court, sitting as an appeal court, cannot reasonably interfere with the Arbitrator’s factual findings on this point.

In the result it is ordered as follows:

The appeal be and is hereby dismissed.