Zimbabwe Educational Social Scientific Cultural Workers Union V THE International Humana People TO People

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT
NO LC/H/311/13
HELD AT HARARE 11TH JUNE 2013
CASE NO
JUDGMENT NO LC/H/311/13
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IN THE LABOUR COURT OF ZIMBABWE	    JUDGMENT NO LC/H/311/13

HELD AT HARARE 11TH JUNE 2013		    CASE NO LC/H/573/12

In the matter between:-

ZIMBABWE EDUCATIONAL SOCIAL SCIENTIFIC			Appellant

CULTURAL WORKERS UNION

And

THE INTERNATIONAL HUMANA PEOPLE TO PEOPLE		Respondent

Before The Honourables:	   E Muchawa, President

P Muzofa, President

For Appellant		 Mr R Matsikidze (Legal Practitioner) and

Ms L Shambamuto (Legal Practitioner)

For Respondent		Mr S Bhebhe (Legal Practitioner)

MUCHAWA, E:

This is an appeal against an arbitral award by Honourable B Mapisaunga

handed down on the 24th day of June 2012.

The background to this matter is that Appellants Moses Rushwaya, Biggie Mupanguri, Hitler Size, Patrick Chahwanda, Alfeyo Maxwell, Success Jonasi, Walter Chigunda, James Gatsi and Tinarwo Kaponda were at all material times employed by Respondent on fixed term contracts terminating on 31st May 2011.  Respondent is a non governmental organisation engaged in non profit activities and dependent on donor funding for its activities.  Appellants had been employed for varying periods from 1 year to 9 years on fixed term contracts which had been renewed for varying periods.  Upon expiry of their fixed term employment on 31st May 2011, the Appellants, like other more than one hundred and fifty employees of the Respondent who were in a similar situation, were offered renewals of their contracts as the donor had agreed to extend its financial support for a further defined period.  It is common cause that the Appellants did not sign the new contracts.  No one was recruited by Respondent in their place.  Thereafter Appellants made a claim for unfair dismissal.  That is the matter that ended up for arbitration.  The relevant part of the terms of reference before the arbitrator were:-

To determine whether perpetual provision of fixed term contracts was fair or not

To determine whether employees’ dismissal was fair or not

To determine the appropriate remedy.

In his award the arbitrator, in respect to the above found and awarded as follows:

“That the claim for perpetual fixed term contracts and unfair dismissal by the complainants be and is hereby dismissed.”

The grounds of appeal before this court have been stated as follows:

The learned arbitrator grossly erred at law in that he failed to note that it is now settled law that the continuous renewal of fixed term contracts at law is illegal and such renewal gives birth to a contract without limit of time.

The learned arbitrator grossly misdirected himself factually, a misdirection that amounts to a point of law in making a ruling that the Appellants refused to renew their contracts when in fact they sought indulgence for extension of time for the same day the purpose of seeking advise before appending that signatures which at law is allowed.  Put differently the arbitrator accepted a bare allegation that was not fully canvassed before him as required by the law, that the employees refused to sign contracts, when they only asked for extension of time to consult as opposed to sign contracts on the same day.

In their prayer, Appellants want the arbitral order set aside and that they be reinstated with full benefits and pay as per their terms and conditions of employment.  Moreso they want a declaration that their contracts are contracts without limit of time.  In the event that reinstatement is no longer tenable, they are claiming damages.

In response, Respondent raises the points in limine that the Appellants have raised factual issues on appeal and that the grounds of appeal are generalised and do not show where the arbitrator erred.  They challenge the assertion that the law is now settled that the continuous renewal of fixed term contracts at law is illegal and that such renewal gives birth to a contract without limit of time.

In my opinion, there are two issues for determination by this Court.  I will write them in the order that I propose to deal with them.

Whether or not the arbitrator made a gross misdirection factually which amounts to a point of law on whether or not Appellants refused to sign their contracts.

Is the continuous renewal of fixed term contracts illegal and does such renewal give birth to a contract without limit of time.

Whether or not the arbitrator made a gross misdirection factually which amounts to a point of law on whether or not Appellants refused to sign their contracts.

In the award, the arbitrator made a factual finding through an observation that the Appellants were offered reengagement and they declined.  Further that they gave the Respondent a condition to meet first before they could accept the employment.

Appellants submitted that this conclusion is a serious misdirection of facts and question what the arbitrator considered to reach this conclusion. They aver that the condition put by the Appellants was an extension to seek legal advise.  They proceed to say that by making this finding, the arbitrator acted unreasonably  and there was an omission in analysing the facts before him.

I have perused the record and noted that Appellants submitted lengthy submissions before the arbitrator.  In paragraph 7.7 of Claimant’s statement in replication, Appellants stated:

“The issue of not signing contracts should not be blown out of proportion. The contention for not signing was very simple, the Respondent was supposed to offer them permanent contracts.  This was on the authority of the decisions of the detailed Labour Court Authorities which were cited in the statement of claim.”

It is clear that the argument that they wanted to seek legal advice is only being brought up now.  Before the arbitrator, this was not brought up.  The arbitrator cannot be blamed for not considering a fact that was never placed before him.

In the circumstances I find that the arbitrator did not make a gross  misdirection factually.  There is nothing outrageous in his finding.  The plain factual findings of the arbitrator are therefore final and outside the purview of section 98 (10) of the Labour Act.  The factual conclusions made by the Arbitrator are not appealable to this Court.

I will proceed to consider the second ground of appeal.

Is the continuous renewal of fixed term contracts illegal and does such renewal give birth to a contract without limit of time?

Appellants argue that it is now settled law that continuous renewal of fixed term contracts at law is illegal and such renewal gives birth to a contract without limit of time.

On the other hand, Respondent argues that this is a misrepresentation of the law.  They state that fixed term contracts are recognised under both common law and statute law.  They make reference to the cases of R Bhana  1941 SR 186 and Metal and Allied Workers Union of SA and Others v  Screenex Ltd  1985 (6) ILJ 75.  These cases recognise fixed term contracts and that no notice is required to bring about termination and when such termination happens upon expiration of the agreed period, this is neither retrenchment nor unfair dismissal.  (See also Chikonye and Anor v Peterhouse School 1999 (2) ZLR 329) Section 5 (d) of S.I. 15 of 2006 captures fixed term contracts by providing as follows:

“No employer shall terminate a contract of employment with an employee unless…

5 (d) the employee was engaged for a period of fixed duration or for the performance of a specific task and the contract of employment is terminated on the expiry of such period or on the performance of such tasks.

Section 12 B (3) (b) of the Labour Act statutorily provides for unfair termination of fixed term contracts of employment as follows

“An employee is deemed to have been unfairly dismissed:-

(b)	  If, on termination of an employment contract of fixed duration,

the employee-

had a legitimate expectation of being re-engaged; and

another  person was engaged instead of the employee.

In casu it is clear that the Appellants are not alleging a legitimate expectation of being rehired where another person was engaged in their place.  In fact, they were offered renewal of their contracts and they declined such renewal.  Further, no person was hired in their place.  I was referred to various cases that relate to employees whose contracts are not renewed, who then claim they had a legitimate expectation of renewal of contracts.  I believe such cases are distinguishable from this present case whose facts are different as shown above.  In this case, the court is invited to determine whether or not it is lawful for an employer to place employees on perpetual fixed term contracts.  Further, whether one becomes a permanent employee simply because there was continued renewal.

The facts of this case are that the Appellants were on fixed term contracts of ranging durations over time but which had been repeatedly renewed over a continuous period, ranging from 1 year to 9 years.

Appellants referred me to the ILO Convention 158 and ILO Recommendation 166 to demonstrate that in certain circumstances a fixed term contract may be deemed to have become a contract of indeterminate duration.  It is clear that this is done to deal with a practice, that employers may take up and misuse and abuse fixed term contracts in order to evade statutory obligations pertaining to dismissals and save money by denying employees the opportunity of pension or medical aid benefits and to cut on administrative costs.

I note however that Article (3) (2) of ILO R166 in paragraph (a) gives an exception to when continuous roll over of fixed term contracts will not be deemed to have evolved into permanent contracts.  It provides that

“limiting recourse to contracts of employment for a specified period of time to cases in which, owing either to the nature of the work to be effected or to the circumstances under which it is to be effected or to the interests of the worker, the employment relationship cannot be of indeterminate duration”. (my emphasis)

It is clear that international labour law and jurisprudence on this subject recognises that there are limitations to the deeming of fixed term contracts into permanent ones.  Clearly a balance has to be struck between a general public policy considerations of promoting permanent employment contracts in general and recognising that in certain circumstances, employers, due to their peculiar circumstances, may not operate effectively under permanent employment contracts.

I was referred to the cases of Zimbabwe Bata Shoe Co. Ltd v Zimbabwe Bata Shoe Co Workers Committee LC/MD/24/05 and Kadzinga and 2 Others v Eastern Textiles (Pvt) Ltd t/a Devstar Clothing LC/MC/02/2007 among others.  In both judgments it was noted that the use of fixed term contracts obviously provides an easy way for employers to evade statutory provisions pertaining to dismissals and employment security.  In the Kadzinga matter it was further noted that the Clothing Industry was guilty of this practice which had been allowed to continue unabated for a long period of time and that such practice was against public policy.

What is distinguishable in the above cited cases is that they were profit making enterprises.  In casu, Respondent is a private voluntary organisation which is registered in terms of the Private Voluntary Organisations Act Chapter 17:05.  In terms of section 3 (a) and (b) of S.I. 192 of 1995 as read with section 2 (a) of S.I. 111 of 2004 and section 2 of S.I. 14 of 2012, the Respondent falls under the jurisdiction of NEC Welfare and Educational Institutions.

This point was argued by Appellants and succeeded before the arbitrator.

Respondent has two main sections at Murwiestate being the headquarters and agricultural section.  The agricultural section runs crop cultivation, horticulture, forestry and game.  Though the farm is run on a commercial basis, the agricultural section remains a purely welfare activity .  The prime purpose of the agricultural section is to run training and demonstration projects for beneficiaries such as the farmers’ clubs.  Secondly the proceeds realized from the output of the agricultural section are meant to support the charity work of the Respondent.  It is also common cause that Respondent is a donor funded organisation and continuation of employment depends on availability of funding.

It is my considered opinion that the nature of the enterprise and the source of its funding qualifies as part of the exceptions envisaged in Article (3) (2) of ILO R166 in paragraph (a).

The nature of Respondent’s work and the circumstances under which the work is done would saddle Respondent with a pool of permanent employees, whose salaries would be unsecured if the court were to find otherwise.  This is clearly a case where the employer is not abusing fixed term contracts, but is constrained to use fixed term contracts by the prevailing circumstances.  I therefore find that the perpetual renewals of fixed term contracts were lawful in the circumstances.  Consequently they did not give birth to permanent contracts of employment.

Submissions were also made on casualization of labour.  Section 12 (3) of the Labour Act prohibits casualization of labour.  This section does not however apply to fixed term contracts.  This is in line with the reasoning of Chivizhe B.T. President in Action Centre La Faim v G Nyamhingura and Another LC/MS/13/2012.  This section applies where the employer, for example, makes employees sign contracts of employment of less than six weeks for a reasonably long period.  In casu the contracts were for fixed duration.   Such contracts automatically terminated by effluxion of time on the date of expiration.  Appellant elected to discontinue employment by not signing the renewal contracts bringing their employment relationship to an end.  This is an issue of offer and acceptance of contracts.  The Respondent offered the Appellants a contract, the Appellants made a counter offer.  The parties therefore did not agree on anything and there was no contract.  In essence when the contract the Appellants initially signed expired on the 31st of May 2011, the Appellants had no employment contract with the Respondent.

It is therefore ordered as follows:-

“The appeal being devoid of merit is dismissed with costs.”

…………………………………..  I agree

PRESIDENT  P  MUZOFA

………………………………….

PRESIDENT  E  MUCHAWA

Matsikidze & Mucheche, Appellant’s Legal Practitioners

Kantor & Immerman, Respondent’s Legal Practitioners