ZESA Enterprises (Pvt) LTD V ZESA Technical Employees Association

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/173/2014
HARARE, 13 NOVEMBER 2013
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE	 JUDGMENT NO. LC/H/173/2014

HARARE, 13 NOVEMBER 2013			               CASE NO. LC/H/297/13

& 28 MARCH 2014

In the matter between:-

ZESA ENTERPRISES (PVT) LTD					Appellant

And

ZESA TECHNICAL EMPLOYEES ASSOCIATION			Respondent

Before Honourable B.S. Chidziva, Judge

For Appellant		Mr.  A.K. Maguchu  (Legal Practitioner)

For Respondent		Mr. L. Madhuku (Legal Practitioner)

CHIDZIVA J:

This is an appeal against the arbitral award that was handed down by Honourable J.T. Mawire on the 10th day of April 2013.  The award in brief was couched as follows,

“In the circumstances, it is ruled that the unilateral migration by the respondent from the NEC Energy is ultra vires the Act, unlawful and invalid …

However, it is important to state that the respondent’s conduct is not an infringement of its employees’ right to freedom of association as the respondent could not and in fact did not bar them from belonging to their trade union. The allegation of infringement of section 21 of the Constitution is therefore unsustainable and falls away.

In the avoidance of doubt, the issue of variation of scope may be referred by either party or by the NEC Energy to the Registrar of Labour for resolution in terms of section 61 of the Act.

It is so awarded.”

This award came as a result of the terms of reference made to the arbitration which were stated as follows’

Whether or not ZENT’s (“the Appellant” herein) purported withdrawal from NEC for Energy Industry is valid at law.

Whether or not the Appellant may join any other Employment Council without the consent of the relevant trade union and the workers concerned.

Whether or not the appellant’s employees may be subjected to terms and conditions of service set by a 	NEC to whom the Appellant has become part against the wishes of employees.

Whether or not the appellant’s actions have not infringed the right of its employees as protected in Section 24 of the Constitution of Zimbabwe (“The constitution”) and Section 4 and 6 of the Labour Act [Cap 28:01] (“The Act” herein).”

The brief background of this matter is that the Respondent (ZTEA) is a trade union which is duly registered in terms of the Labour Act [Cap 28:01].  It is made up of members who are lawful employees of the Appellant.  The Respondent belongs to the NEC for the Electricity and Energy Industry.  In July 2012 the Appellant informed its employees about its decision to migrate from the NEC for the Energy Industry to other NECs.  The employees who are members of the Respondent did not agree with this thereby giving rule to a dispute.  The matter was then taken up for arbitration with the terms of reference which has been stated above.  The arbitrator then found that this unilateral movement by the Appellant from NEC for the Energy Industry is ultra vires the Act, unlawful and invalid.

The Appellant has thus lodged an appeal with this court and the grounds of appeal are as follows;

NEC Energy is a voluntary NEC.  The Appellant argued that the NEC Energy’s coverage is exclusively through either

The parties voluntarily joining it or

An employer operating a business within the nature of industry covered by the NEC.  No finding contrary to the above submissions was made or may be made.

1:1	The Honourable Arbitrator erred at law in the circumstances in failing to determine.

Whether the Appellant ever voluntarily and lawfully became a member of the NEC Energy.

Whether the Appellant’s business was ever such that it fell within the nature of industry covered by the NEC Energy Sector.

1:2	Assuming without conceding that the Honourable Arbitrator determined that Applicant was a member of the NEC Energy, such a finding in any event is grossly unreasonable both on the facts and at law:

Since it is not based on any law governing membership to voluntary NEC’s

Since on the facts the Appellant did not at any stage lawfully and voluntarily become a member of the NEC Energy and

Since on the facts, Appellant’s operations have never and do not fall within the nature of industry covered by the NEC Energy.

The unreasonableness unexplained of is so gross such that no reasonable person applying his mind to the issue would have arrived at such a decision.

2.	 The Arbitrator erred grossly at law in finding that he had no jurisdiction to determine whether the Appellant belongs to the NEC Energy.

3.	The Arbitration erred at law and misunderstood the issue by holding that the issue before him was one to do with a change in the scope of coverage for the NEC Energy.

5.	The Arbitrator erred grossly in holding that NEC belonging is an issue to “be left to baptism”

6.	Alternatively the Arbitrator erred grossly on the facts in finding that the Registrar of Labour had not determined the matter.  Consequently the Arbitrator erred grossly in entertaining a matter which had already been determined by the Registrar of Labour and thereby setting aside a decision of the Registrar of Labour.”

The appellant on these grounds therefore prayed that the award be set aside with

Costs.

The respondent on the other hand told the court that;

The Appellant’s ground of appeal are baseless.  A finding was made by the Arbitral Tribunal that the Appellant was covered by the NEC Energy not by accident or mistake but by history that is that Appellant was a member of the NEC for Energy by operation of law the moment it came into existence as one of the successor companies to ZESA in terms of Section 68 of the Electricity Act Chapter 13:19.

It is clear from the Arbitral Award that the reason for the determination that the Appellant’s actions of unilaterally migrating from the NEC Energy was ultra vires the Labour Act was that the Appellant had not complied with the requirements of Section 61 of the Labour Act.

The Arbitrator decided the issue of the unilateral migration which he found that was ultra vires the Act.

The respondent therefore prayed that the appeal should be dismissed for lack of merit.

It is common cause that;

The National Employment (NEC) is a bipartite voluntary organization formed in terms of Section 56 of the Labour Act.  The parties to the NEC are the employer and the employee party through a Trade Union or federation of the Trade Union.

The NEC Energy was formed in 1990 with the employer party because ZESA, a statutory authority and employee party were Trade Unions.

In 2002 ZESA ceased to exist and therefore could not be a member of NEC.

In its place ZESA Holdings (Pvt) Ltd took over the authority’s membership to the NEC Energy Sector.

In turn ZESA Holdings (Pvt) ltd formed subsidiary companies including the Respondent.  The subsidiary companies could not secure membership to the NEC Energy Sectors.  This therefore meant that ZESA Holdings (Pvt) Ltd was the only member of the NEC Energy Sector

Despite the fact that the Appellant’s employees and the Respondent, the Appellant continued the unlawful actions by

Employing new employees at rates which are far below those in the NEC Energy Industry based on rates in the NEC for engineering and Iron Industry, and NEC for Construction Industry.

From October 2012 made deductions of higher NEC levy from employees salaries and remitting them to NECs of its choice without the consent of the employees.

What is to be decided is,

Whether ZENT’s withdrawal from NEC Energy is ultra vires

Whether ZENT can join any other NEC without the consent of the relevant trade union or workers concerned.

Whether ZENT may be subject to terms and conditions set by a NEC to whom ZENT is part and parcel against the wishes of employees.

Whether or not ZENT’s actions have not infringed the rights of its employees stated by Section 21 of the Constitution and Sections 4 and 6 of the Labour Act [Cap 28:01].

Section 58 of the Labour Act on” Constitution of Employment Councils” stated that;

“(a) The constitution of every employment concerned formed in terms of this part

Shall provide for

A statement of the aims and objectives of the councils and

The registered trade union concerned or federation of such trade unions to apparent fifty (50%) per centum of the members of the employment council and the employers organization concerned or federation of such organizations that appoint the remaining members and

The appointment of a chairman and vice-chairman of the employment council  Provided that every constitution shall provide that if the chairman is appointed by members representing the registered trade union or federation of trade unions, the vice-chairman shall be appointed by members representing the employers organization or federation of such organizations and vice-versa; and”

This section clearly shows that Employment Councils consists of employers and employees with an equal representation.

This therefore means that whilst Appellant could withdraw its membership from NEC Energy membership it could not force the respondents to withdraw that membership.  Furthermore it could not force them to join another National Employment  Council and subdue them to other conditions of service without their consent. Section 58 (d) to (k) also prescribes the other duties of the employment council. This includes;

Statement of the Aims and objectives of the council

Administration of the funds.

Dealing with disputes .

Amendment of Constitution.

Winding up of the employment Council and any other matters.

In this matter Appellant did not seek the approval of the Respondent to move to another employment Council.  Appellant furthermore did not seek the approval of the Respondents to employ salary rates which are far below those in the NEC Energy Industry.  They went on to base their rates on the rates in the NEC for engineering and Iron Industry for NEC for Construction  Industry.  Appellant also unilaterally made deductions of a higher NEC levy from the employees’ salaries and remitted them to the NECs of its choice.  This was against the wishes of the employees.

To that end therefore this court also upholds the arbitrator’s finding that Appellant’s movement from the NEC Energy is ultra vires the Act, unlawful and invalid.  It also follows that Appellant cannot subject the Respondents to terms and conditions set by a NEC to whom Appellant has become a party against the wishes of employees.  Section 4 (1) of the Labour Act states that;

“Notwithstanding anything contained in any other enactment every employee shall, as between himself and his employer, have the following rights,

The right, if he so desires to be a member or an officer of a trade union.

Where he is a member or an officer of a trade union the right to engage in the lawful activities of such trade union for the advancement or protection of his interests.

Section 6 of the Labour Act also protects the employees from unfair Labour standard.  The Appellant therefore by imposing new terms of employment when it unilaterally moved from the NEC Energy infringed the employees’ rights as provided for in section 21 of the Constitution.

In so far as the issue of variation of scope of the NEC Section 61 of the Labour Act provides that;

“1. whenever the Registry is satisfied that

Any employment council is not sufficiently representative of the undertaking or industry in respect of which it is registered – he may after consultation with the employment Council vary the coverage in respect of which the employment council is registered and make the necessary variation in his register.”

The Appellant did not seek such variation before the unilateral movement.  In view of this this court upholds the Arbitrator’s finding that either party or the NEC Energy can refer the issue of variation to the Registrar of Labour for resolution as provided for by Section 61 of the Act.

In the circumstances the reference

It is ordered that the Appeal be and is hereby dismissed with costs.

Dube, Manikai & Hwacha, Appellant’s legal practitioners

Matsikidze & Mucheche, Respondent’s legal practitioners