Zuva Petroleum (Pvt) Ltd v Don Nyamande & Anor

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/195/2014
HARARE, 26 FEBRUARY 2014
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE	                 JUDGMENT NO. LC/H/195/2014

HARARE, 26 FEBRUARY  2014		           	        	      CASE NO. LC/H/254/13

& 28 MARCH 2014

In the matter between:-

ZUVA PETROLEUM (PVT) LTD					Appellant

And

DON NYAMANDE & ANOR					Respondents

Before The Honourable F.C. Maxwell, Judge

For Appellant		Mr. I. Chagonda (Legal Practitioner)

For Respondents	          Professor L. Madhuku (Legal Practitioner)

Mr. C. Mucheche (Legal Practitioner)

MAXWELL J:

This is an appeal against the decision of Honourable Arbitrator D. Mudzengi issued on 19 March 2013.  The arbitrator ordered that Respondents be reinstated without loss of pay and benefits from the date of the unlawful dismissal.  If reinstatement is no longer an option, the parties were to negotiate damages to be paid in lieu of reinstatement within fourteen (14) days of receipt of the award.  If parties fail to agree, either party may refer the matter to the arbitrator for quantification.  The grounds of appeal are;

The honourable Arbitrator erred on a point of law by holding that section 12 (4) of the Labour Act [Chapter 28:01] did not allow the termination of a contract of employment by giving notice.

The Arbitrator also erred in law by failing to appreciate that Section 5 of SI 15 of 2006 was ultra vires Section 12 (4) of the Labour Act and therefore could not have any force or effect.

Appellant prayed for the decision of the arbitrator to be set aside and substituted by one upholding the decision of the Appellant to terminate the Respondents’ contracts of employment on notice.

In response Respondents raised two points in limine.  The first was that the Appellant was approaching the Court with dirty hands before complying with the arbitral award.  The second was that the appeal does not raise a question of law as required by section 98 (10) of the Labour Act.

At the hearing of the matter the points in limine were abandoned.  In response to the merits Respondents submitted that the employer has to show that he dismissed the employee in terms of an employment code, or the model code if regard is to be had to Section 12B of the Labour Act [Chapter 28;01]. In casu the Respondents’ contracts were unlawfully terminated as the provisions of the Code were not followed.  Respondent further submitted that section 5 of SI 15 of 2006 is not ultra vires Section 12 (4) of the Labour Act since the employer has to comply with Section 12B of the Labour Act.  Respondent prayed for the appeal to be dismissed with costs on a legal practitioner and client scale.

Respondents were employed by BP Shell as supply and logistics Managers respectively.  Around 20 October 2010 BP Shell sold its services as a going concern to Respondent.  A transfer of undertaking was done in terms of Section 16 of the Labour Act [Chapter 28:01].  On 21 November 2011 Appellant offered Respondents a voluntary retrenchment package which was declined.  On 15 December 2011 Appellant served Respondents with a compulsory notice of intention to retrench.  Negotiations ensued but were fruitless.  The issue was referred to the Retrenchment Board.

On 16 May 2012 the Parties were advised to carry out retrench negotiations with twenty one (21) days from date of receipt of the letter from Ministry of Labour and Social Services advising them.  On 18 May 2012 Appellant wrote letters to the Respondents terminating their contracts of employment on notice with effect from 1 June 2012. Respondents were aggrieved and referred the matter to arbitration.

The issue before this Court is whether or not the arbitrator was correct in finding that the common law position to terminate an employment contract on notice was ousted with the promulgation of SI 15 of 2006 and Section 12B of the Labour Act [Chapter 28:01] (The Act).  The arbitrator agreed with Respondents’ submissions that their contracts of employment should have been terminated in accordance with Section 12B of the Act.  Appellant’s case is that Section 12 (4) was applicable in the circumstances as the termination of the contracts of employment was not pursuant to disciplinary proceedings. Appellant submitted that it never alleged that the Respondents had committed an offence which would have necessitated disciplinary proceedings.  It was Appellant’s case that termination in terms of a registered code or in the absence of one, in terms of the model code applies in circumstances where disciplinary issues are involved.  Appellant made reference to the cases of

Chirasasa and Others v Nhamo N.O and Another SC 135/02

Samuriwo v Zimbabwe United Passenger Company 1999 (1) ZLR 385

Chivinge v Mushayakarara & Anor 1998 (2) ZLR 500

Hama v National Railways of Zimbabwe 1996 (1) ZLR 664

Whilst Counsel for Respondents conceded that Codes of Conduct deal with issues of misconduct, they argued that the cases cited by Counsel for Appellant were decided prior to the enactment of Section 12B of the Act.  They submitted that Section 12 B of the Act changed the scenario.  According to them Section 12 (4) of the Act is not the basis for dismissal in this country.  Respondents’ Counsel submitted that though the common law allows dismissal on notice in terms of a contract of employment section 12 B of the Act came to do away, with that sanario.  Respondents’ Counsel referred to the case of Art Corporation v Moyana 1989 (1) ZLR 304.

It was also submitted for the Respondents that the International Labour Organization Labour Conference Report on Protection Against Unjustified Unfair Dismissal of 1995 shot down the reciprocity of termination of contract of employment on notice.  It was submitted that according to the Report the giving of notice was applicable where the employee intends to resign.  Respondents’ Counsel submitted that termination of employment should only be where there are valid reasons for such termination in accordance with ILO Convention on Termination of Employment.  Counsel also made reference to section 65 (1) and 4 of the Constitution of Zimbabwe.

In response counsel for Appellant pointed out that the current matter is on issue of termination, not dismissal as to warrant compliance with section 12B.  The two are distinct.  He further submitted that the International Labour Organisation Convention does not override the law as it stands as;

The right to terminate a contract of employment is available to either employer or employee in terms of Section 12 (4) of the Act.

Section 12 (4) (a) requires three months notice and does not go on to specify that there should be a good reason for the termination.

I find favour with the submission that termination and dismissal are different and distinct.  My view is fortified by the fact that when Section 12B was inserted as a new section by Act 17 of 2002 it did not substitute section 12 (4) of the Act.  Section 12 of the Act is on “Duration, particulars and termination of employment Contract” while Section 12B is on “Dismissal”.  In my view these sections provide for two different procedural methods of ending a contract of employment, through either termination of dismissal.  In 2005 section 12 (4) was repealed and substituted by section 6 of Act 7 of 2005.  Again the amendment did not repeal the provisions that provide for periods of notice of termination of the contract of employment to be given by either party.  In the case of a contract without limit of time or a contract for a period of two years or more, which is applicable in this case, the period is three months.  In my view therefore the submission that section 12B came to do away with the possibility of terminating a contract of employment on notice is a misunderstanding of the law as it stands.

In any event the provisions of section 12 (4) of the Act are clear and allow no ambiguity as also the provisions of section 12B.  None of the sections have the effect of doing away with the termination of a contract of employment on notice.  It was submitted for Appellant that the termination of the contracts of employment for Respondents was in terms of their contracts of employment.  This was not disputed by Respondents.  Respondents were therefore dealt with in terms of their contracts of employment as was the case in Chirasasa and Others v Nhamo N.O. and Another (supra).

The law of this country relating to termination of employment might not be in line with the International Labour Organization Convention.  However unless the law is amended to be in line with that Convention, the duty of the Court is to apply the law as it stand.  That Section 65 of the Constitution of Zimbabwe provides for “fair and safe labour practices and standards” as well as “just, equitable and satisfactory conditions of work” does not derogate from the provisions of the Labour Act [chapter 28:01].

The honourable arbitrator also made reference to the provisions of Section 5 of SI 15 of 2006.  In my view he arrives at the wrong conclusion that “the common law position to terminate on notice as argued by the Respondent was ousted with the promulgation of SI 15 of 2006 and Section 12 B of the Labour Act [Chapter 28:01]”

I have already dealt with the issue of section 12B of the Act above.  However, concerning section 5 of SI of 2006, regard must be had to the objectives of the Code as listed in section 3 thereof.  It is clear that the objectives of the code cover disciplinary issues.  As such it would not be applicable where no disciplinary issues are involved.

In conclusion I do not agree with a submission by Counsel for Respondents that holding section 12 (4) to be independent of section 12B is so fundamental that it cannot be done by this Court.  He submitted that such a finding would go against entrenched laws of labour and would also go against the Supreme Court’s understanding of section 12 (4) and its predecessors.  In my view whether or not section 12 (4) is independent of section 12B is a question of law and falls fully within the ambit of Section 98 (10) of the Act.

For the above reasons the appeal succeeds.

WHEREFORE it is ordered that

The appeal be and is hereby allowed with costs.

The decision of the arbitrator is set aside and substituted with the following;

“Claimants’ claim be and is hereby dismissed for lack of merit.”

The termination of the Respondents’ contracts of employment on notice be and is hereby confirmed.

Atherstone & Cook, Appellant’s legal practitioners

Messrs Matsikidze & Muchehce, Respondent’s legal practitioners