RioZim Limited v Givemore Zaronga & 69 Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/91/2016
HARARE, 17 SEPTEMBER 2015 &
4 MARCH 2016
CASE NO LC/H/868/2013
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IN THE LABOUR COURT OF ZIMBABWE	  JUDGMENT NO LC/H/91/2016

HARARE, 17 SEPTEMBER 2015 &		           CASE NO LC/H/868/2013

4 MARCH 2016

In the matter between

RIOZIM LIMITED							APPELLANT

Versus

GIVEMORE ZARONGA & 69 OTHERS				RESPONDENTS

Before the Honourable D L Hove J

For the Appellant	Advocate A. De Bourborn (Legal Practitioner)

For the Respondents   Advocate Uriri (Legal Practitioner)

HOVE J:

This is an appeal against an arbitral award which award upheld the respondents’ entitlement to a bonus which had been unilaterally withdrawn by the employer (appellant).

The respondents were employees of the appellant. Prior to February 2009 it remunerated its employees in Zimbabwean dollars. This was prior to the country dollarizing. The appellant paid its grade 11 up to grade 14 employees who went on annual leave, a leave bonus, housing, transport and meals’ allowances. These were paid over and above their salaries to cushion them from the vagaries of inflation. The respondents are grade 11 plus employees.

When the country dollarized, the appellant rationalized its remuneration structure and allegedly introduced and implemented more favourable salary scales in favour of all its grade 11 plus employees. It alleges that the salaries were lucrative. The appellant also alleges that the employees were paid way above the local mining National Employment Council (NEC) salary rates. The appellants were thus alleged to have been cushioned against inflation by the new salaries. The introduction of the multi-currency regime saw the use of a more stable currency in remunerating the employees and thus ensuring that they were cushioned against inflation.

The appellant brought these changes in March 2009. Bonus, payable to grades 11 up to 14 employees proceeding on annual leave, fell away with effect from 1 March 2009.

The undisputed facts are that from 1 March 2009 the respondents were no longer enjoying these bonuses. When the appellant made this decision, it communicated the decision to the affected employees through an internal memorandum dated 21 March 2009. Further the employer advised that the transport allowances were being stopped with effect from 1 April 2009.

The appellant began remunerating the respondents in accordance with its rationalized new position communicated to the employees on 21 March 2009. This new position continued from March 2009 to February 2013.

In February, 2013 the record shows that the respondents lodged a claim with the Ministry of Labour through letter dated 6 February 2013. They claimed payment of:

Accrued leave bonus;

Housing and transport allowances;

Remittal of their employees’ pension contribution to MIPF;

Payment of salaries at regular intervals as stated on their payslips; and

That their representatives be consulted before decisions which affect their interests at the workplace are taken.

The dispute was referred to conciliation. The parties failed to agree. The matter was referred for compulsory arbitration.

The employer, on page 127 of the record, captured the terms of reference as follows:

“Violation of unfair labour practices or contractual provisions, as per the claimant’s letter of 6 February 2013.”

The parties agreed therefore that the arbitrator was dealing with an unfair labour practice. The ground of appeal raised and filed with the court that;

“The arbitrator erred as a matter of law in failing to treat the matter as a dispute in terms of the Labour Act rather than as an unfair labour practice.”

is without merit. The appellant was in agreement that the labour officer was dealing with an unfair labour practice. The employer cannot now at this eleventh hour seek to put that into issue when it was in agreement before the arbitrator with agreed terms of reference.

The Grounds of appeal are many and apart from the one I have dealt with above they are briefly that:

The arbitrator ought to have ruled on the issue of locus standi since only thirty-nine had locus standi.

The claim in relation to the thirty-nine with locus standi had prescribed

The respondents had failed to exhaust internal remedies.

The company policy was no longer applicable and further that the respondents were entitled to the leave bonuses.

There were no leave bonuses owed prior to dollarization.

There was no unilateral variation of employment conditions.

No unfair labour practice had been committed.

There was no contractual right to the leave bonus since it was a privilege.

Issues raised in relation to grounds of appeal number 4, 5 and 7 are raising factual issues. The appellant seeks to challenge the arbitrator’s factual findings on:

Whether or not the company policy was applicable.

Whether or not leave bonuses were owed prior to the dollarization period.

Whether or not the employer had committed an unfair labour practice.

The arbitrator considered the facts and made factual conclusions which in terms of section 98 (10) of the Labour Act [Chapter 2801] (“the Act”) are not appealable to this court.

Factual issues can be challenged were there has been allegations that there has been gross irrationality.

See the case of Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) where it was stated that;

“an appeal … to the Supreme Court lies only in respect of a question of law. A notice of appeal which raises no issue of law for resolution is fatally defective so as to constitute a nullity …”

The grounds of appeal number seven does not allege that there was any gross misdirection in the finding that there was an unfair labour practice and it is thus improperly before the court.

Grounds of appeal number 4 and 5 allege that there was a gross misdirection but no facts have been placed before me to establish that there was gross irrationality in the factual conclusions. True, arguments have been placed before the court to show that the arbitrator may have erred but nothing to show that the arbitrator was grossly irrational in the factual conclusions arrived at the Hama case (supra).

Ground number 6 is one without merit. The issue is factual and it is whether or not there had been unilateral variation of the conditions of employment.

The employer made the changes and it has not shown that in making those changes, the affected employees were consulted. In fact the appellant submitted that the decision it had made to remove the benefits and bonuses was;

“duly communicated to the claimants through an internal memorandum dated 21 March 2009”,

and

“furthermore the claimants were advised …. That their transport allowances…. as well as their meal/ lunch allowances were being stopped with effect from 1 April 2009”.

There is not even the slightest indication that this decision had been taken in consultation with the respondents. The appellant’s submissions are clear that the decision was made by itself and communicated to the respondents in the memorandum of 21 March 2009. This was a unilateral decision. It really is neither here nor there, (in considering whether or not the decision was unilateral), that the decision was being made for the respondents benefit.

That ground of appeal is entirely without merit. The conditions were varied unilaterally.

Grounds of appeal numbers one and two are raising two issues i.e., whether or not the dispute between the parties had prescribed and also whether all of some of the respondents lacked locus standi.

Ground number three raises an issue that was also raised as a preliminary issue i.e. whether or not the employees had exhausted their internal/domestic remedies. This issue was raised as a preliminary point together with the issue that the appeal was not raising any point of law. I will discuss these preliminary issues first before discussing grounds of appeal number one and two.

Whether or not the appeal is raising any question of law?

I do not think that it can be seriously argued that issues of locus standi and prescription are factual issues. They are seeking to decide what the true rule of law is. While it is true that facts of the matter will be decided but they also seek to raise the question; “what is the true rule of law?”

In the case of Central African Building Society v Rangise & Ors SC 112-04 the court distinguished an issue of fact from an issue of law and it had the following to say as to what can properly be regarded as an issue of law:

“Question of law is used in three distinct though related senses. First it means a question which the law itself has authoritatively answered to the exclusion of the right of the court to answer the question as it thinks fit in accordance with what is considered to be the truth and justice of the matter, second it means a question as to what the law is. Thus an appeal on a question of law means an appeal in which the question for argument and determination is what the true rule of law is on a certain matter.”

The issues raised in ground one and two seek to question what the true rule of law is as regards who has or who does not have locus standi. Also it seeks to question what the true rule of law is as regards the issues of prescription.

The preliminary point that the appeal is not premised on points of law must therefore fail in relation to these two grounds.

Whether or not the appeal is prematurely before the arbitrator or in other words, whether or not the respondents failed to exhaust their domestic remedies?

It is a true rule of law that litigants should exhaust their domestic remedies before approaching the court. See in this regard the case of Zimra v Lindiwe Mpindiwa SC 85-06.

The appellant argues in casu that domestic remedies were not exhausted. It is not clear what the arbitrator’s position on this issue was. The issue had been raised before him and he ought to have considered and decided the issue. It was thus an error on the part of the arbitrator to fail to decide the issue of exhaustion of domestic remedies.

I have however perused the record to try and establish why it is being stated that the respondents failed to exhaust domestic remedies. I have not seen the basis of this allegation. In my view, it is incumbent on a party who is alleging that domestic remedies have not been exhausted to show and outline to the court what remedies were available to the respondents in the domestic arena and to show that instead of exhausting those remedies, the respondents improperly approached the arbitrator or the labour officer.

The appellant has not outlined or shown the domestic remedies applicable in casu and as such, I am of the opinion that the applicant has failed to substantiate this allegation and it cannot succeed.

Whether or not the respondents had the requisite locus standi?

The appellant submitted that there are seventy respondents out of these, only thirty-nine had the requisite locus standi. They argued that this is so for the following reasons:

There was a group of employees who were engaged by the appellant in the eleven plus grades after March 2009 when the policy vis a vis the payment of bonuses etc had already been ceased.

These categories of workers were never, in terms of the conditions of service entitled to the bonus and other payments as these were never entitled to them. They cannot claim the continued payment of leave bonuses which they never received. The appellant listed nineteen employees on page 129 of the record and gave their dates of engagement in the respondent’s employ as falling after March 2009.

This factual averment was not disputed.

There was a second group of employees who were not grade eleven plus employees as at March 2009 or where not entitled to bonuses etc. in terms of the company policy because their individual contracts of employment did not provide for such bonuses. It was argued that these eleven employees have no legal basis for entitlement to the bonus. They never received it prior to March 2009 before it was unilaterally abolished by the employer and cannot claim entitlement now that the employer has abolished it.

Again these factual averments in relation to these eleven were not disproved.

The last group were entitled to and received the bonuses and allowances prior to it being unilaterally withdrawn. These are said to be thirty-nine and it is admitted they had the requisite locus standi.

I agree that all those employees who fell in to the first two grounds cannot bring a claim alleging the withdrawal or cessation of a benefit that they never enjoyed. They cannot claim violation of a contractual right which right they never had.

In other words, in a claim for the restoration of the right to bonus etc, they have no locus standi. It is only those respondents in the last ground that have a locus standi.

In the case of Zimbabwe Stock Exchange v Zimbabwe Revenue Authority SC 56-07 the court held that:

“The common law on locus standi in judicio of a party instituting proceedings in a court of law is that to justify participation in the action the party must show that he or she has a direct and substantial interest in the right which is the subject matter of the proceedings and the relief sought and not merely a financial interest which is only an indirect interest in the litigation.”

It cannot be true that those who were never entitled to this right can have direct interest in it. The respondents who fall in the first two groups have not disputed the fact that the alleged contractual benefits never at any time related to them, they never contracted with the employer for that benefit. It was never extended to them. It cannot begin now that the employer has withdrawn it.

Whether or not the claims for those in the third ground had prescribed?

Prescription is governed in terms of section 94 of the act, it provides that:

Subject to subsection (2), no labour officer shall entertain any disputes or unfair labour practice unless-

It is referred to him; or

Has otherwise come to his attention; within two years from the date when the dispute or unfair labour practice first arose.

Subsection (1) shall not apply to an unfair labour practice which is continuing at the time it is referred to or comes to the attention of a labour officer.

For the purpose of subsection (1), a dispute or unfair labour practice shall be deemed to have first arisen on the date when—

The acts or omission forming the subject of the dispute or unfair labour practice first occurred; or

The party wishing to refer the dispute or unfair labour practice to the labour officer first became aware of the acts or omissions referred to in paragraph (a), if such party cannot reasonably be expected to have known of such acts or omissions at the date when they first occurred.

The provision provides basically that a labour officer shall not entertain a dispute that is referred to him after two years from the date it first arose.

This dispute or unfair labour practice first arose in March of 2009. The dispute was referred to a labour officer way past the two year prescriptive period in January 2013.

Unless it can be shown that the dispute or unfair labour practice can be covered under the provisions of section 94 (2), the dispute or unfair labour practice had clearly prescribed by the time it was referred to the labour officer.

I do not believe that the dispute in casu can qualify to be one that can be said to be continuing in nature. I say so for the following reason. The dispute is that of unilaterally altering the conditions of service. The employer did not continue to alter the conditions of services. It altered and the deed was done and communicated to the respondents in March 2009. It then implemented the new policy.

The appellants knew that this dispute first arose in 2009. They were advised and failed to challenge the employer’s unilateral act. They accepted without protest the new remuneration knowing fully well that this was a unilateral decision of the employer. They had not contributed to the decision. Nothing continued after that. The right to bonus and other allowances was terminated unilaterally by the employer and the deed was done. There was no continuation of the unilateral act of the appellant. The respondents ought to have challenged that within the first two years from the date it first occurred. They failed to do so but behaved in a manner that would have set a belief in the mind of any reasonable man that they had accepted the varied conditions of service. They waited for about four years before asserting their displeasure. Not only did they act unreasonably in delaying to assert their right but they also became their worst enemies when they let the claim prescribe.

Further they acted in a manner indicative of someone who had desired to waive his or her rights and not contest the unilateral action of the employer.

The claim was thus prescribed by the time it was referred to a labour officer.

Having found thus, the labour officer had no jurisdiction in terms of section 94 of the Act to entertain the dispute. His actions in hearing and determining the matter were a legal nullity.

His award is also incapable of being enforced as it is a legal nullity.

I accordingly set aside the award on the basis that the claim had prescribed at the time the dispute was referred to a Labour Officer. In any case all the other respondents had no locus standi except the 39 in the third group.

I make the following order:

The appeal is upheld with each party bearing its own costs.

The arbitral award is set aside.

Gill, Godlonton & Gerrans, appellant’s legal practitioners

Matsikidze & Mucheche, respondents’ legal practitioners