Tendai Nyakunu v Associated Newspapers of Zimbabwe

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/83/16
HELD AT HARARE ON 23th OCTOBER, 2015
CASE
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IN THE LABOUR COURT OF ZIMBABWE	     JUDGMENT NO. LC/H/83/16

HELD AT HARARE ON 23th OCTOBER, 2015           CASE NO.LC/H/423/05

AND 19th FEBRUARY, 2016

In the matter between:-

TENDAI NYAKUNU							Applicant

And

ASSOCIATED NEWSPAPERS OF ZIMBABWE			Respondent

Before the Honourable Mhuri, J.

For Applicant	:	Mr. T. Deme (Legal Practitioner)

For Respondent	:	Mr. T. Nleya (Legal Practitioner)

MHURI J.

On the 5th April, 2012 I issued a judgment in which

Applicant was awarded back pay and benefits in Zimbabwe dollars (Z$15 220 000 and Z$578 492.00) which amount was to be converted into United States dollars (US$).

On appeal to the Supreme Court, the award was set aside and the matter was remitted to me to consider:

Whether the amount in Zimbabwe dollars should be converted into foreign currency if so, the rate applicable taking into account the principles of equity enshrined in the Labour Act.

Applicant is of the view that the amounts should be converted into US$ whereas Respondent is of the contrary view.

It was Applicant’s submission that the Zimbabwe currency has been demonetized and therefore the Court must not use a currency that is moribund.

He relied on the case of

KWINDIMA V MVUNDUMA HH 25/09

FLEXIMAIL (PRIVATE) LIMITED V GIFT BOB SAMANYAU &

38 OTHERS SC 21/14

and Section 2A of the Labour Act [Chapter 28:01] to substantiate his arguments.

In turn, Respondent argued that in view of the principle of currency nominalism, which applies to Zimbabwe, the amount awarded in Zimbabwe dollars should be paid in that currency.

Reliance was made on the cases of

CHRISTOPHER JOHN MAKASI SHAVA

V

BERGUS INVESTMENT (PRIVATE) LIMITED HH 226/11

MONICA KOMICHI

V

DAVID EDWIN TANNER & ANOTHER HH 104/05

JEFFREY MUKORERA

V

OCEAN BREEZE ENGINE AND COOLING SYSTEMS HH 13/08.

The principle of currency nominalism entails that a debt sounding in money has to be paid in terms of its nominal value irrespective of any fluctuations in the purchasing power of the currency.

The case of

S A EAGLE INSURANCE COMPANY LIMITED

V

HARTLEY 1990 (4) SA 833

is instructive on this principle.

In casu therefore what this entails is that the amount awarded by this court in Zimbabwe dollars, since it covers the period for which the Zimbabwe dollar was the legal tender, has to be paid in that currency.

In the case of

GIFT BOB SAMANYAU & 38 OTHERS

V

FLEXIMAIL (PRIVATE) LIMITED LC/H/776/14

this Court, had the occasion to deal with issues similar to the ones raised in casu.  The Court was guided by the principles set out in the case of

MADHATTER MINING COMPANY

V

MARVELLOUS TAPFUMA SC 51/14

in which amounts awarded in Zimbabwe dollars were converted to foreign currency.

I will rely on the same principles in deciding the issues before me.

In the MADHATTER case (supra) the Supreme Court acknowledged and laid the position that by virtue of Section 2A of the Labour Act, the Labour Court is endowed with the jurisdiction to apply principles of equity in the determination of labour disputes.

Section 2A provides the PURPOSE of the ACT.

It reads:-

“(1)	The purpose of this Act is to advance social justice and democracy in the workplace by –

giving effect to the fundamental rights of employees provided for under Part II.

………………………

………………………

the promotion of fair labour standards;

………………………

securing the just, effective and expeditious resolution of disputes and unfair labour practices.”

(Emphasis is added)

I have no hesitation to repeat what I stated in the case of GIFT BOB SAMANYAU’s case (supra) at page 4 of the cyclostyled judgment that, in conformity with the above provision, and in the exercise of its equitable jurisdiction it is my considered view that the Labour Court has the jurisdiction to convert the amount awarded in Zimbabwean Dollars which is no longer in use into the operational and realisable currency, and particularly the US dollar.

This was also acknowledged by the Supreme Court in its order in the case of:

HORACE NZUMA & 2 OTHERS

V

HUNYANI PAPER & PACKAGING SC 137/11

Of what use will be the Zimbabwean dollar to the Applicant?  None as this currency ceased to be “legal” tender as of February, 2009.  It cannot be used to discharge any financial obligations.  The Zimbabwean Dollar is of no value.  This is common cause.

Despite the principle of currency nominalism being applicable in Zimbabwe I am of the view that, it will certainly be a mockery of justice if I were to find that the amount should not be converted to the US$.  Such an order will go against the letter and spirit of the provision of Section 2 A (i) (f), that of securing the just and effective resolution of disputes.

To that end therefore the amount awarded in Zimbabwean Dollars is to be converted into a currency that is realisable and that gives value to the Applicant.  See also

DELTA BEVERAGES PRIVATE LIMITED

V

KUDAKWASHE MURANDU SC 38/15

The next issue to determine is the rate to be used in converting the amount to the United States Currency.

The Court had earlier on, tasked both parties to establish the rate of exchange applicable as at the 14th June, 2005 which was the date of the order for reinstatement.

This, the parties did and by consent, they produced a Rates Confirmation Certificate from the Exchange Control Inspectorate, Research and Compliance Division of the Reserve Bank of Zimbabwe, (Exhibit 1).

Exhibit 1 reads as follows:-

“This letter serves to confirm that the exchange rate of Zimbabwe dollar (ZWD) to the United States dollar (USD 1.00) as at 14 June 2005 is as given below;

14 June 2005 – USD1 : ZWD 9,922.59”

Applicant’s contention was that the rate to be used should be as indicated on Exhibit 1.  Respondent’s contention on the other hand was that the Court should also consider the other rates as reflected on Annexure A.

These are:

Old Mutual rate

Parallell Market rate.

The Court has observed that Annexures A does not show its origins.  It is a table which shows that as at June 5 the Old Mutual Implied Rate to the US$ was 16.29, the Parallel Market rate to the US$ was 25.00 and the official rate to the US$ was 9.78.  Exhibit 1 raises no doubt that it is an official document from the Reserve Bank of Zimbabwe.

Be that as it may, however, the Court is not inclined to using the parallel market rate as this was an illegal market rate colloquially known as the black market.  As submitted by Applicant, the Court cannot be seen to be sanctioning usage of this rate, as it is common cause it was used in illegal foreign currency dealings.

As for the Old Mutual rate, I am persuaded by Applicant’s submission, that this rate cannot be used for want of legitimacy.  The rate as provided by the Reserve Bank of Zimbabwe in exhibit 1, will in my view be the correct one to use as it is universally accepted by operation of law.

As regards interest, this Court’s judgment ordered that interest at the prescribed rate be payable.  The order is silent on the effective date, but it is clear that the date of the judgment is 5 April, 2012.  In that regard, interest is payable calculated from that date until date of final payment.

Appellant, in his Heads of Argument in particular paragraph 9 had calculated the amount payable using the rate US$ to 250 ZWD.  It was conceded that in view of exhibit 1 the calculation thereon are no longer applicable.

Having concluded that the amount awarded in Zimbabwean dollars be converted to foreign currency.  It is ordered as follows:-

That the parties use the simple mathematical calculations used in paragraph 9 of Applicant’s Heads of Argument, but using the rate of US$1 to ZWD 9,922.59 as per exhibit 1.

Interest be paid at the prescribed rate of 5% per annum calculated from the 5th April, 2012 to date of final payment.

Respondent is to bear costs of suit.

Chibune & Associates – Appellant’s legal practitioners

Gill Godlonton & Gerrans – Respondent’s legal practitioners