ZESA Holdings (Pvt) LTD V ZESA Managers Association

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/57/2016
HARARE, 30 OCTOBER 2015 &
5 FEBRUARY 2016
CASE NO LC/H/APP/654/2015
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IN THE LABOUR COURT OF ZIMBABWE	  JUDGMENT NO LC/H/57/2016

HARARE, 30 OCTOBER 2015 &			   CASE NO LC/H/APP/654/2015

5 FEBRUARY 2016

In the matter between

ZESA HOLDINGS (PVT) LTD					  APPLICANT

Versus

ZESA MANAGERS ASSOCIATION				  RESPONDENT

Before the Honourabe P Muzofa & B S Chidziva JJ

For the Applicant	A K Maguchu (Legal Practitioner)

For the Respondent     B Magogo (Legal Practitioner)

CHIDZIVA J:

This is an application for leave to appeal to the Supreme Court against the decision of this court that was handed down on 15 May 2015. This court in its judgment ordered as follows:

“1.	The arbitral award issued by Honourable G Nasho be and is hereby set aside and in its place the following order is made:

The claim for the payment of 5% outstanding salary allowances be and is hereby dismissed.

The claim for the payment of the engineer’s allowance to other managers in D3 and D4 be and is hereby dismissed.

The appellant be and is hereby ordered to pay school fees allowances with effect from 2009.

The claim for fuel increase be and is hereby referred back to the parties to negotiate a reasonable increment.

The benefit of Personal Allocated Vehicles be and shall be applicable to all D3 managers employed by ZETDC, ZPC and Powertell Communications (Pvt) Ltd.

There shall be no order as to costs.”

The brief background of this matter is that after the parties had failed collective bargaining negotiations they remained with the following outstanding issues to resolve:

School fees allowances.

An increase in the amount of fuel allocated monthly to employees in Grade D3 an D4.

The allocation of personally allocated vehicles to all D3 managers.

The matter was further referred for arbitration and the arbitrator found in the respondent’s favour. When the matter was brought before this court on appeal this court also found in the respondent’s favour.

The applicant is now applying for leave to appeal to the Supreme Court against this decision. When parties appeared before CHIDZIVA J it was agreed that the matter should be decided on papers as it had been initially heard by JUSTICES CHIDZIVA and MUZOFA.

The basis for this application is that:

Prior to 2007 managers in grade D3 and D4 were enjoying a school fees benefit. The applicant has argued that it was not a contractual right.

The arbitrator ordered that there should be an increase in fuel allocation. The court’s finding that no increase was awarded is therefore wrong. An increase was ordered but the quantum thereof was not stated.

A mistake of the vehicle policy by a subsidiary company has been held as creating a right to employees at the level of the holding company and employees and other subsidiaries. In the absence of evidence to the effect that there was a policy change is a serious misdirection.

There is a serious misdirection for an arbitrator to order the applicant to be changing and/or buying new vehicles every four years for grade D3 managers who amount to seventy eight (78).

The respondent in response opposed the application stating that there were no prospects of success on appeal in that:

The arbitrator did not make factual findings in the absence of evidence. Documentary evidence to substantiate the claims was submitted before the arbitrator.

The school fees allowance was suspended in 2009 thereby showing that allowance still existed. The allowance was introduced by the 2009 CBA.

The arbitrator ordered parties to negotiate the fuel and without any negotiation the applicant just awarded 80 litres of fuel to take the total monthly allocation to 240 litres per month.

An offer letter to one of the managers clearly shows that all D3 managers at ZENT were on PAVs.

The applicant demonstrated that it had the ability to pay allowances by introducing such allowances as Engineers’ allowances and allocating PAVs to D3 managers at ZESA Enterprises.

The case of S v McGown 1995 (2) ZLR 81 has laid out the general rule to be followed when considering these applications. It was held that:

“The decision whether or not to grant leave to appeal depends on the prospects of success. If the prospects are reasonable the prospects should be granted otherwise it should be refused. It is not enough to make out an “arguable” case for there are very few cases which are not arguable in the wide sense of the word, but the authorities in South Africa seem to regard these being a reasonable prospect of success if the case is arguable, in the sense that there is substance in the argument. Where there is substance in the argument, there must ipso facto be a reasonable prospect of success”.

The case of Clarke v Shepherd 1957 (1) SA at page 59 also stated that an application for leave to appeal can be granted if the dispute is of substantial importance.

The applicant has argued that although ZESA makes policies the decision by a subsidiary company on allocation of vehicles for D3 managers should not bind the whole company.

GARWE JA in the case of Zimnat Life Assuarance Ltd v George Dikinya SC SC 30-10 at page 7 states that:

“However the holding company is a separate legal personae possessing its own interest, rights, assets and liabilities. By the same token the subsidiary will also be a separate legal personae possessing its own interests, rights, assets and liabilities. The mere fact that the holding company is able to control the subsidiary does not constitute the subsidiary its agent. As a consequence of the separate legal personalities of the holding and subsidiary companies, the subsidiary itself and not its holding company will have to institute actions and enforce its rights. A subsidiary cannot, either institute action to enforce the rights of its holding company. Thus the holding and subsidiary companies possess their own legal personalities, rights, assets and liabilities.”

This clearly shows that decisions of subsidiary companies do not bind the holding company and vice versa unless specifically stated.

In the circumstances therefore this court is of the view that another court may come up with a different opinion on the policy of providing D3 and D4 managers with PAVs.

The issue of school fees allowances is also of substantial importance to both parties hence it is also this court’s view that the matter can be further argued before a superior court.

Another issue of contention is fuel. It has been argued that the arbitrator said that it should be negotiated. The applicant went on to award an increase of 80 litres mero moto without negotiation. This is a matter important to both parties.

To that end therefore this court finds that there is merit in this application.

Accordingly it is ordered that:

The application for leave to appeal to the Supreme Court be and is hereby granted.

Each party shall bear own costs.

CHIDZIVA J: …………………………

MUZOFA J: ………………………… I agree.

Dube, Manikai & Hwacha, applicant’s legal practitioners

Makuwaza & Magogo Attorneys, respondent’s legal practitioners