T.N. Holdings Limited v Stanley Katsande

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO.LC/H/258/14
HELD AT HARARE ON 20th JANUARY, 2014
CASE NO. LC/H/73/12
AND 9TH MAY, 2014
JUDGMENT NO. LC/H/258/14
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IN THE LABOUR COURT OF ZIMBABWE	   JUDGMENT NO.LC/H/258/14

HELD AT HARARE ON 20th JANUARY, 2014   CASE NO. LC/H/73/12

AND 9TH MAY, 2014

In the matter between:-

T.N. HOLDINGS LIMITED 					Appellant

And

STANLEY KATSANDE							Respondent

Before the Honourable G. Mhuri, Judge

For Appellant	: Mrs. J. Zindi (Legal Practitioner)

For Respondent: Mr. G. Sithole (Legal Practitioner)

MHURI J.:

This is an appeal against an arbitral award wherein the arbitrator held that Respondent had been constructively dismissed as his resignation on the 31st January, 2011 was as a result of intolerable situations Appellant had subjected him to.  The arbitrator also held that the caveat subscriptor rule did not apply to Respondent’s action for constructive dismissal as he signed the document only for the collection of his leave pay and January 2011 salary.

This appeal is centred on whether the Arbitrator was correct in his findings.

Appellant’s main argument being that Respondent was not constructively dismissed but resigned after he had found better paying employment with a company called Adam Bede.  He only instituted proceedings alleging constructive dismissal after his employment with Adam Bede had been terminated.

The second argument by Appellant was that Respondent was bound by the caveat subscriptor rule.  He waived his rights to pursue this action when upon receipt of his January salary and leave pay he signed a document which stated “…in full and final settlement of all and any claims against T.N. Holdings…”.

It was also Appellant’s argument that Respondent was not Appellant’s employee prior to November 2009.  He was employed by a company called Luxfurn based in South Africa and owned by the former Managing Director of TEDCO.  This company, Appellant submitted, was not one of the companies it took over from TEDCO, and his return to Zimbabwe was not on transfer.

On this issue, the Arbitrator found in favour of Respondent, that he was employed by Lifestyle Furnishers Zimbabwe(Private) Limited and was working in South Africa upon the takeover of the group by Appellant.

This finding is beyond reproach.  Filed of record is an appointment letter dated 22nd September, 2008 addressed to Respondent on a Lifestyle Furnishers (Private) Limited letterhead authored by the Chief Executive Officer, which reads in part :-

“APPOINTMENT AS BUSINESS MANAGER – RSA

I have pleasure in confirming your appointment to the position of Business Manager RSA for Lifestyle Furnishers Zimbabwe (Private) Limited, with specific responsibility for Sales and Marketing.”

Also filed of record is another letter of appointment dated the 11th November, 2009 addressed to Respondent, authored by the Group Operations Director for Lifestyle Furnishers Zimbabwe (Pvt) Ltd.and on the same letter head as the first letter.  The relevant paragraph reads:-

“APPOINTMENT BUSINESS MANAGER - LOUNGE

I am pleased to confirm your appointment to the position of Business Manager Lounge Division with effect from November 11, 2009.”

The most crucial and telling paragraph in this letter of appointment is the one which states,

“This contract supercedes any previous employment contracts which you may have with the company.”

It shows that Respondent was in current employment with Appellant.  If it was not current, why would Appellant refer to non-existent contracts.

Certainly if Respondent was not employed in one of the companies Appellant took-over, this paragraph would not have been included in the letter of appointment.  The arbitrator in my view cannot be faulted in finding as he did.

Two of the three terms of reference which the Arbitrator was called to determine and determined were

Whether or not Respondent was constructively dismissed and

Whether or not by signing for his cash in lieu of leave days, he waived his right to further claims.

As indicated earlier, the Arbitrator found in favour of Respondent on both terms.

Section 12B subsection (3) Of the Labour Act [Chapter 2801] provides that

“(3)	An employee is deemed to have been unfairly dismissed –

If the employee terminated the contract of employment with our without notice because the employer deliberately made continued employment intolerable for the employee;”

In casu, the Arbitrator found as proved the fact that Appellant had subjected Respondent to some intolerable conditions which led him to resign from Appellant’s employ.

These intolerable conditions were spread over a length of time, starting as far back as November, 2009 when upon appointment his salary was unilaterally reduced.  He was transferred to Bulawayo without adequate consultation and preparation.  When he was recalled from Bulawayo (September 2010), Appellant sent someone else to replace him who in turn denied him entry into the premises and ordered him to surrender the car keys.  In Harare, he was not allocated any specific duties and was not allowed to take part in management meetings.

As a result of these conditions, on the 15th October, 2010 Respondent wrote a letter to the Chief Executive Officer highlighting the issues and seeking redress of the same before he considered filing a constructive dismissal suit.

By an e-mail dated 18 October, 2010 from Tawanda Nyambirai, Respondent was advised in response to his letter that the issues will not be dealt with as they were before the Court.

It is common cause that on the 28th December, 2010 Respondent secured employment with a company called Adam Bede.  On the 3rd January, 2011 Respondent tendered his resignation from employment with Appellant.  He was due to start work with Adam Bede on the 1st of February, 2011.  This was not to be as Adam Bede withdrew the offer of employment as a result of some information about Respondent it had received from Appellant.

Soon after the withdrawal, on the 15th February, 2011 Respondent filed a complaint of unfair labour practice with the Ministry of Labour and Social Services against Adam Bede.

It was 7 months later i.e. on 4th August, 2011 that Respondent instituted these proceedings with the Ministry of Labour and Social Services claiming constructive dismissal.

From the events chronicled by Respondent in his letter to the Chief Executive Officer of the 15th October, 2010, it is clear that these were intolerable conditions.  The Arbitrator in my view did not err when he found that these were intolerable conditions perpetrated by Appellant which were meant to frustrate Respondent.

It was Appellant’s submission that Respondent did not resign as a result of the alleged intolerable conditions.  He resigned because he had secured employment with Adam Bede.

I am persuaded by this submission.  Whilst there could have been intolerable conditions perpetrated by Appellant, Respondent did not immediately resign from Appellant’s employ particularly so after receiving the response from Tawanda Nyambirai in October, 2010.  He only tendered his resignation in January, 2011 after he had signed a contract of employment with Adam Bede on the 28th December, 2010.

I find support in the case cited by Appellant’s Counsel:-

ASTRA HOLDINGS (PRIVAE) LIMITED V PEGGY KAHWA SC97/04

which quoted with approval Lord Denning in the case of

WESTERN EXCAVATING V SHARP [1978]1 ALL ER 713 at 717 d-f wherein it was stated –

“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contracts then the employee is entitled to treat himself as discharged from any further performance.

If he does so, then he terminates the contract by reason of the employer’s conduct.  He is constructively dismissed.

The employee is entitled in those circumstances to leave at the instant without giving any notice at all or alternatively, he may give notice and say he is leaving at the end of the notice.

But the conduct must in either case be sufficiently serious to entitle him to leave at once.

Moreover, he must make up his mind soon after the conduct of which he complains for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged.  He will be regarded as having elected to affirm the contract.”

(Underlining for emphasis)

In casu, Respondent only gave notice of resignation in January 2011 for conditions stretching from 2009 to September, 2010.  He only resigned after securing employment with another company, contemplating that he would start work on the 1st of February, 2011.  I find that, by his failure to resign immediately Respondent lost the right to treat himself as discharged.

Respondent’s conduct immediately after Adam Bede had reneged on its offer of employment clearly shows that Respondent was not dismissed by Appellant.  Instead of instituting proceedings against Appellant he instituted proceedings against Adam Bede stating that its conduct or decision had left him with no source of livelihood.

He wrote in his letter of complaint to the Ministry on the 15th of February, 2011.

“I signed a contract of employment with Adam Bede on 28 December …

I went on to resign from my job on 3 January with TN Harlequin Bulawayo in anticipation of being engaged by Adam Bede….”

Also telling, is the Respondent’s statement in paragraph 6 of his response dated 22nd July, 2011 to Adam Bede’s claims in which he stated –

“Adam Bede’s opening statement in their opposing papers clearly shows that they offered me this contract in bad faith, it shows this issue was premeditated and they never intended to employ me but acted as a bait to remove me from my current employment with TN Manufacturing ….”  (Underlining for emphasis)

It can rightly be inferred from the above that despite the intolerable conditions, Respondent had no intention to resign from TN Manufacturing.  He would not have resigned had he not signed a contract of employment with Adam Bede.

In the case of ASTRA HOLDINGS (supra) the principle was stated that:

“Constructive dismissal is claimable where an employer has committed conduct which as a breach goes to the root of the contract of employment so as to constitute repudiation and by reason of that conduct the employee leaves employment.”

This is not what happened in casu.

His lack of diligence to immediately sue for constructive dismissal until 7 months later also casts some doubt on his claim.  To that end I find that the Arbitrator grossly erred when he held that Respondent had been constructively dismissed.

Consequently by accepting and signing a contract of employment with Adam Bede on the 28th December 2010 and by tendering his resignation with Appellant on 3rd January, 2011 Respondent repudiated his contract of employment with Appellant.

See: -	TEL-ONE (PRIVATE) LIMITED V KUYUMANI ZULU SC 11/04

Having found that the Arbitrator erred in holding that Respondent was constructively dismissed, the arbitral award cannot be allowed to stand.  Consequently so, the quantification proceedings also fall away.  In view of this finding, I find it unnecessary to consider the caveat subscriptor issue, save to mention in passing that on the face of it, even if Respondent was being paid cash in lieu of leave days and January 2011 salary, he signed a document which was clearly marked “IN FULL AND FINAL SETTLEMENT OF ALL AND ANY CLAIMS against TN Holdings Limited or its subsidiaries”.  Respondent is not an illiterate person according to the papers filed of record.  He endorsed his signature on this document which was written in clear and unambiguous terms.

In the result, the appeal succeeds.

Accordingly it is ordered that the appeal be and is hereby allowed with costs.

Mtetwa and Nyambirai–Appellant’s Legal Practitioners

Mushangwe and Company–Respondent’s Legal Practitioners