Zimbabwe Power Company v M. Mpukuta and Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGEMENT NO LC/H/463/16
HELD AT HARARE 12 JULY, 2016
CASE NO LC/H/276/13 (REV)
& 22 JULY, 2016
JUDGEMENT NO LC/H/463/16
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IN THE LABOUR COURT OF ZIMBABWE         	JUDGEMENT NO LC/H/463/16

HELD AT HARARE 12 JULY, 2016                  		CASE NO LC/H/276/13 (REV)

& 22 JULY, 2016

In the matter between:-

ZIMBABWE POWER COMPANY		-	APPELLANT/APPLICANT

AND

M. MPUKUTA AND OTHERS 			-  	 RESPONDENT

Before the Honourable Chivizhe, J

For Appellant	: Adv. S. Hashiti (instructed by Kadzere, Hungwe and Mandevere)

For Respondent	: Mr W. Kambanje (Paralegal officer – ZFTU)

CHIVIZHE J:

The matter was placed before me as an application for review conjoined with an appeal. Both matters were opposed by the Respondent. For convenience the Applicant/Appellant shall be referred to as the Applicant in this matter.

Background

The Applicant is Zimbabwe Power Company a registered company in terms of the laws of this country. The Respondents are employees of the Applicant employed in various capacities, and based at Kariba where they occupied houses belonging to the Appellant. They are in these proceedings represented by the Zimbabwe Congress of Trade Unions.

It is common cause that the Respondents were in 2001 offered the right to purchase from the Appellant (who was previously known as Zimbabwe Electricity Supply Authority) the houses which they were occupying. At a date not clear from the record but which was sometime in 2001 the Applicant purported to

withdraw the offer so made for Respondents to purchase the houses they were occupying. This culminated in a dispute which was then referred to the Labour Officer in 2010. The Labour Officer failed to conciliate the matter and the matter was referred for compulsory arbitration.

The terms of reference for the Arbitrator were to determine the issue(s) of the alleged ‘unfair labour practices by the employer’. After listening to submissions by the parties and upon consideration of the evidence placed before him the Arbitrator came to the conclusion that, the facts of the matter being similar to the facts in another matter involving the same employer and other employees reference Zimbabwe Electricity Supply Authority vs Darryl Smith and fifty five others judgment No. SC 9/03 in which the Supreme Court had held that the employer was not justified to cancel sale agreements on the basis of a unilateral mistake the Applicant was again committing an unfair labour practice by refusing to transfer houses to the Respondents who were non- managerial employees at the time residing in Applicant’s houses at Mahombekombe Location in Kariba. The Arbitrator then directed Applicant to stop with immediate effect the unfair labour practice it was committing and to effect the sale/transfer of the houses to the Respondents. The arbitral award was handed down on the 13th of March, 2013. The Applicant aggrieved by the arbitral award then noted the present application for review and appeal.

The Application/Appeal

The Application for review was filed on the basis of the following grounds:

“GROUNDS FOR REVIEW

The Arbitrator erred in not giving the parties an opportunity to define the terms of reference for resolution of the dispute. The Arbitrator made a determination without being given any terms of reference by the parties to the dispute.

The Arbitrator erred in proceeding to make a determination on the issues without making a determination on the preliminary points in limine which were raised.

The Arbitrator deviated from the terms of reference in making a finding as to the validity of contracts which was not before him”

The relief sought under the review application was the setting aside of the arbitral award.

The appeal on the other hand was noted on the basis of the following grounds;

The Arbitrator erred at law in presiding over a matter beyond his jurisdiction. The issues before the Arbitrator related to a purely contractual relationship outside labour law.

Assuming the Arbitrator had jurisdiction, the Arbitrator grossly erred at law, in making a determination on a prescribed matter.

Further, the Arbitrator erred in ordering a declaratory order as to the validity and for the performance of a disputed contract which jurisdiction the Arbitrator does not have in terms of the law.

The Arbitrator grossly erred at law in making a finding that there was an unfair labour practice based on the alleged failure to sell houses to the employees. Grounds for unfair Labour Practice are prescribed in terms of the Labour Act and the allegations raised by the respondents do not amount to unfair labour practice.

The Arbitrator erred at law in making a determination that there was a valid contract in existence when the essentials thereto had not been properly verified and proved.

In relief under the appeal the Applicant is seeking an order that the arbitral award be set aside and the matter be referred back to the conciliating authority for the appointment of another Arbitrator to resolve the dispute.

The application for review and appeal are both opposed by the Respondents. Through a Notice of Response filed on 03 October 2013 Respondents oppose the appeal on the following basis; that the offer to sell the houses as employees benefits was an offer derived out of the contract of employment; By refusing to sell the houses the Applicant committed an unfair labour practice as set out in Section 6 (c) of the Labour Act; Persuasive authority could be found in a South African decision in Apollo Tyres SA (Pvt) Ltd vs CCMA and Others (unreported case DA 1/11 [2013] ZALAC wherein unfair labour practice is broadly defined to cover any unfair act or omission arising between an employer and employee. In regards the review the Respondents contention is that the Arbitrator did have jurisdiction to hear the matter; the dispute had not as at the stage prescribed as the unfair labour practice was still ongoing; finally the Arbitrator correctly made his findings in regards the validity of the agreement of sale entered between the parties. Through its heads of argument filed on the 1st of June, 2016 the Respondents raised two points in limine. The first is that by filing an application for review and appeal conjoined the Applicant adopted the wrong procedure. The Applicant should have filed two separate LC3 and LC4 forms under two case numbers as required under Rule 15 (3) of the Labour Court Rules, Statutory Instrument 59 of 2006. The second point in limine is that the relief sought in both the application for review and appeal is improper as the Applicant seeks for the matter to be remitted back to the Arbitrator where the Arbitrator has already determined the issues on the merits. On the same point the Appellant is seeking a remittal to the Arbitrator in circumstances where the Applicant is challenging the Arbitrator’s jurisdiction to deal with the dispute.

Both points in limine stand to be dismissed. With regards to the first the submission is that Applicant should have filed the appeal and application for review under different case numbers as both processes were initiated by separate and distinct processes i.e. a form LC3 form for the appeal and form LC4 for the review. That submission is clearly misconceived. Rule 15 (3) of the Labour Court Rules, 2006 clearly allows for consolidation of both matters Rule 15 (3) reads as follows;

“15 (3) a person making an appeal under this rule who also wishes to seek a review of the proceedings in respect of which he or she makes the appeal shall, at the same time, complete in three copies of a notice of review in Form LC 4 and serve such notice together with the notice of appeal under this rule.”

Rule 15 (3) Apart from allowing consolidation Rule 15 (3) also allows for service of both notices at the same time. There is no requirement for the matters to be noted under different case numbers. No justification has been tendered by the Respondents for that requirement. The Respondent have not pointed to any prejudice suffered as a result of the procedure adopted. I would consequently dismiss both points in limine.

Analysis of the issues

The Applicant has through the appeal and application for review raised several issues. From my analysis of those issues the main issue that the court ought to address initially is the issue taken through the application for review. The submission as taken in heads of argument and oral submissions is that the Arbitrator’s jurisdiction is derived from Article 16 of the Arbitration Act [Cap 7:15] under that section a preliminary objection may be taken as to the Arbitrator’s jurisdiction not later than the statement of defence; the Arbitrator is then obliged to rule on the preliminary objection either as a preliminary question or in the main award on the merits.

It was Appellant’s submission in casu that it raised as a preliminary objection the question of the Arbitrator’s jurisdiction. The Applicant argued as a point in limine that the Arbitrator had no jurisdiction to determine the matter as the issues before him were purely contractual in nature thus falling outside the purview of Labour law. That issue was responded to by the Respondents (claimants before the Arbitrator). The Arbitrator however failed to decide on the issue. By so failing to determine the issue, so it was submitted, there was a gross irregularity which was sufficient to vitiate the arbitral award. The Applicant referred to a High Court decision in Chinhoyi Municipality vs Mangwana and Partners & Another HH 403/16 which is on all fours with the present matter. In that case the High Court found that through the second Respondent failure to rule on a point in limine there was an irregularity in the proceedings which was sufficient to vitiate those proceedings.

The Respondents submission before the court was that the Arbitrator had jurisdiction to deal with the matter on the basis that the Applicant by offering to sell its employees the house they were occupying and then withdrawing the offer Applicant committed an unfair labour practice as contemplated under Section 6 of the Labour act [Cap 28:01]. The Respondents relied on the persuasive authority in the matter of Apollo Tyres South Africa (Pvt) Ltd vs CCMA DA 1/11 [2013] ZALAC 3. The Arbitrator’s jurisdiction was therefore derived from that point. In regards the procedural issue that the Arbitrator did not rule on the preliminary objection the Respondents submitted through their representative that the Arbitrator made a determination as he is duty bound that the matter was properly before him. The Arbitrator had proceeded to determine the matter on the basis of the powers as granted him under statute.

The ground of review raised by the Applicant is clearly with merit. It is clear from a perusal of the arbitral award that in proceeding to determine the substantive issues that were placed before him without first determining the issue as to whether he had jurisdiction in the matter the Arbitrator clearly erred. As correctly submitted by the Applicant the Arbitrator was duty bound to comply with Article 16 under the Arbitration Act. Article 16 of the Arbitration Act [Cap 7:15] reads as follows:

JURISDICTION OF ARBITRAL TRIBUNAL

ARTICLE 16

Competence of arbitral tribunal to rule on its jurisdiction

The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement…….

A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence.  A party is not precluded from raising such a plea by that fact that he has appointed, or participated in the appointment of, an arbitrator.  A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.  The arbitral tribunal may, in either case, admit a later if it considers the delay justified.

The arbitral tribunal may rule on a plea referred to in paragraph (2) of this article either as a preliminary question or in an award on the merits.

The Applicant averred in its papers that the preliminary objection was taken before the Arbitrator. Despite the point having been taken by Applicant the Respondents have at no point rebutted the submission that the preliminary objection was indeed taken before the Arbitrator. The Respondents have instead argued that the arbitrator was entitled to proceed to the merits once he accepted that matter was properly before him.  The court thus agrees with applicant that the Arbitrator indeed failed to address the jurisdictional issue as raised before him. The Arbitrator in his award did proceed to directly address the substantive issues on the basis that the matter was properly before him. The Arbitrator quite clearly erred and misdirected himself. He ought to have determined the issue of jurisdiction before proceeding to address the substantive issues. The issue raised of jurisdiction was after all the main issue which had the potential of finally disposing of the matter placed before him.

It is also proper to refer to the words of Garwe JA in the recent case of Afaras Mtausi Garadzimba vs CJ Peron & Company (Proprietary) Limited SC 12/2006 where he stated as follows:

“In the present case, the substantive issue that was determined by the court a quo did not dispose of the matter. The question still remained whether the application was, in the first instance, properly before the court. This was not an issue that the court a quo could ignore or wish away. The court was obliged to consider and decide whether the matter was properly before it. It was, in short, improper for the court to proceed to determine the substantive factual and legal issues without first determining the propriety or otherwise of the application itself. If the court, as it appears to have done, tacitly accepted that the matter was properly before it, then reasons for such tacit acceptance should have been given.”

In the circumstances it is this court’s finding that the failure by the Arbitrator to determine whether or not he had jurisdiction in the matter before him, and his subsequent failure to explain why he proceeded to address the matter on the merits where the preliminary objection had been taken amounts to a gross irregularity which is sufficient to vitiate the proceedings.

In regards the relief the Applicant’s prayer is that the award should be set aside. The proper relief to be granted in the circumstances where the Arbitrator committed a gross irregularity, where the Arbitrator has however since passed away, where the record of proceedings itself is missing, would be to direct a remittal of the matter to be placed before another Arbitrator. Such a course would in my view ensure that the matter is heard afresh and a decision that definitively resolves the dispute between the parties is taken. Considering the time this matter has taken such a hearing should be convened within a relatively short period.

In regards the appeal the arbitral award having been set aside through the application for review the appeal necessarily fall away.

In the premise the court hands down the following order:

The application for review succeeds with costs.

The arbitral award handed down by (the late) Hon Magureyi on the 13th of March, 2013 is hereby set aside.

The matter is remitted to the Registrar for Labour for reallocation to another Arbitrator.

The fresh hearing shall be convened and finalised within 60 days of the date of this order.

The appeal is hereby dismissed.

Kadzere, Hungwe &  Mandeevere, appellant’s legal practitioners