Judgment record
Montclair Hotel and Casino v Laurence Dube
SC 68/18SC 68/182018
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Judgment No. SC 68/18 1
Civil Appeal No. SC 86/15
REPORTABLE (65)
MONTCLAIR HOTEL AND CASINO
v
LAURENCE DUBE
SUPREME COURT OF ZIMBABWE
GARWE JA, GUVAVA JA & BHUNU JA
HARARE, JANUARY 24, 2017 & NOVEMBER 1, 2018
C. Mucheche, for the appellant
T. Makoni, for the first respondent
BHUNU JA: The respondent was employed by the appellant in 2006 as an
accountant reporting to the General Manager in terms of his job description dated
10 December 2008. Sometime in 2011 the appellant embarked on a restructuring exercise
which introduced a new management system called HALA. The implementation of the
HALA system of administration had the effect of promoting the Finance Manager over the
respondent and generally reorganising the management structures much to the chagrin of the
respondent. He protested that the HALA system of management breached his original
contract of employment in that it subordinated him to the Finance Manager who hitherto was
his subordinate. In protest he wilfully disobeyed the employer’s orders given through the
Finance Manager arguing that the unilateral alteration of his contract of employment was
unlawful.
Judgment No. SC 68/18 2
Civil Appeal No. SC 86/15
The law however permits an employer to restructure and reorganise its operations
at the workplace subject to s 25A (5) (a) of the Labour Act [Chapter 28:01]. The section
requires an employer to consult the Works Council before implementing a restructuring
exercise. To this end, the HALA system of administration was considered and discussed with
the Works Council at a business review meeting held on 28 November 2011 in the Nyanga
Room. At that meeting the HALA system of administration was adopted and it was resolved
that the respondent was now to report to the Finance Manager as his superior.
The appellant, having complied with statutory requirements and in the absence of
any objection from the Works Council, was entitled to implement the restructuring exercise.
The new management structure was then implemented after consultation with management
and the entire staff, the respondent included. Thus, the appellant’s conduct in implementing
the HALA system of administration was neither arbitrary nor unilateral as alleged by the
respondent because it was procedural and permissible at law.
In introducing the HALA system as it was entitled to do, the appellant however
assured its employees that the introduction of the new system would not alter their conditions
of service in any way.
Contrary to that assurance, the restructuring exercise apparently resulted in some
considerable changes regarding the reporting and hierarchical structures at the workplace.
Whereas the respondent’s original conditions of service required him to report to the General
Manager, he was now required to report to the Finance Manager whom he considered to be
his junior. The appellant also took away some of his core work responsibilities and tools of
trade and reposed them in the Finance Manager. The respondent complained that the taking
Judgment No. SC 68/18 3
Civil Appeal No. SC 86/15
over of his core business by the Finance Manager amounted to constructive dismissal. As a
result, the respondent wrote a grievance letter the next day, addressed to the General Manager
on 29 November 2011 seeking clarification of his employment status and conditions of
service. In the grievance letter he raised the following grievances arising from the changes
introduced by the HALA system.
1. The dispossession of his office and sharing of his laptop with the Finance
Manager.
2. Overlapping of roles of Accountant and Finance Manager.
3. The transfer of some of his responsibilities to the Finance Manager.
4. The lack of a clear hierarchical structure in the hotel staff and failure to streamline
new roles and duties by the hotel management.
5. That total disregard was being placed on his contract of employment which spelt
out his duties and directed him to report to the General Manager.
The raising of the above grievances was lawful and procedural in terms of Part 5
clause 10 of the Montclair Hotel and Casino Code of Conduct.
Considering that he had no capacity to resolve the respondent’s grievances, the
General Manager referred the grievance letter to the Board Chairman, Mr Zamuchiya. The
Chairman responded on 12 December 2011. His letter reads as follows:
“Dear Laurence.
The issues raised in your letters have been referred to an HR lawyer. Pursuant to that
advice please note the following:
1. You indicated your desire to leave the hotel and accordingly a package was
offered to you in good faith. To date no communication has been received from
you in respect of same. We remain unclear whether you wish to voluntarily resign
with the offer of a gratuity or remain in employment.
2. Should you wish to remain in the employ of Montclair Hotel and Casino please
note the following:
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Civil Appeal No. SC 86/15
(a) The relief that you seek in terms of reverting to previous company
structures is not possible. These issues are subject to arrangements with the
managing agent of the hotel. Numerous discussions were held with you and
the entire staff. It was clearly laid out that no person would lose their job,
however new structures would be put in place. Furthermore, the new
management company held discussions with you in terms of new roles and
reporting structures, this was never sprung upon you.
(b) The relief that you seek in terms of operating conditions should be raised
with Tranos Moyo as the head of business at the hotel, in line with the
reporting structure.
(c) I will, as indicated, be available to discuss voluntary resignation if you no
longer wish to be employed at Montclair; all other matters should be
referred to Mr Moyo.”
In pursuit of issues raised in the above letter, the parties then engaged in
negotiations for an exit package which culminated in a dead lock.
Pending the resolution of his grievances, the respondent was in due course
dismissed from employment following disciplinary proceedings in terms of the domestic
code of conduct. After exhausting the appeal procedures in terms of the code of conduct, he
successfully appealed to the Labour Court. That court upheld his appeal and ordered
reinstatement without loss of salary and benefits and alternatively payment of damages in lieu
of reinstatement, hence this appeal.
The court a quo’s ratio for its determination is to be found at page 4 of its
judgment where it says:
“In the instant case the appellant did receive instructions but those instructions came
from the Finance manager who was not his superior in terms of his contract of
employment and job description. To that extent, whatever instruction came from that
person, the Appellant was not obliged to obey it”.
At page 5 of the judgment the court a quo proceeded to reason that:
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Civil Appeal No. SC 86/15
“The respondent cannot create unfavourable conditions to oust the Appellant and then
ask him to give up his job as if he was doing so on his own volition yet facts clearly
point to the contrary”.
In making those remarks the court a quo was oblivious of the undisputed facts to
the effect that the implementation of the HALA system of administration was by consensus
with the works council and the generality of the work force at a meeting attended by the
respondent on 28 September 2011. The finding of fact that the appellant imposed the HALA
system on the respondent goes against the grain of evidence and therefore a clear
misdirection.
The court a quo was equally oblivious of the fact that most of the disputed orders
originated from the General Manager to whom the applicant was supposed to report in terms
of his original contract of employment. The Finance manager was more of a conduit for
conveying the General Manager’s orders.
While the respondent might have had genuine lawful grievances, his woes do not
arise from raising those grievances. His dismissal had nothing to do with the grievances. This
is because he was charged and dismissed from employment on charges of wilful refusal to
obey lawful orders. Although on the facts it is clear that the appellant was keen on getting rid
of the respondent for raising the grievances, it did not dismiss him for lawfully raising
grievances in terms of its registered code of conduct. It dismissed him for wilful disobedience
to lawful orders.
Thus notwithstanding the acrimony between the parties, the merits and demerits
of the respondent’s grievances are irrelevant. The crisp issue for determination is whether or
Judgment No. SC 68/18 6
Civil Appeal No. SC 86/15
not the respondent disobeyed a lawful order given by his employer which disobedience goes
to the root of his contract of employment. This is so because the raising of grievances does
not suspend an employee’s fundamental obligation to obey his employer’s lawful orders.
The facts giving rise to the alleged disobedience to lawful orders are by and large
common cause. It is common cause that on divers occasions following the implementation of
the restructuring exercise, the respondent was given numerous orders by the employer
through the Finance Manager which he wilfully disobeyed. These include orders:
1. To relocate to the bookkeeper’s office to make way for the Finance Manager.
2. To share the appellant‘s laptop with the bookkeeper.
3. To carry out a handover-takeover with the Finance Manager.
4. To report to the Finance Manager.
5. To follow the new company structures in discharging his duties.
It is not in dispute that the respondent disobeyed all the above 5 orders given by
his employer through the Finance Manager to whom he was now supposed to report in
accordance with the newly introduced HALA system of administration. His defence was
basically that he could not obey his employer’s orders before his grievances had been
resolved, because until then he still considered the finance Manager his junior.
When ordered by the Finance Manager to conduct a handover takeover with the
bookkeeper he refused saying that he knew his duties. When ordered to relocate to the
bookkeeper’s office he refused saying that he was not going to change offices before the
resolution of his grievances.
Judgment No. SC 68/18 7
Civil Appeal No. SC 86/15
Thus according to his defence, he wilfully disobeyed the Finance Manager’s
orders as being unlawful and therefore tainted with illegality. On that score, he was adamant
that he was not obliged to obey his employer’s orders given through the Finance Manager.
In developing his argument learned counsel Mr Makoni submitted that the orders
were in any case vague and in breach of his contract of employment. There is however
nothing vague or ambiguous about the orders. The respondent’s response to the orders clearly
shows that he understood them but deliberately disobeyed the orders believing them to be
unlawful and in breach of his contract of employment. His attitude to his employer’s orders is
captured in his lawyer’s submission at pages 149 of the record of proceedings where he says:
“The accused (respondent) wants justice. He is not submitting to the current
authority that erodes the current benefits that he has. If the company doesn’t want
him why shouldn’t they give him an exit package? Why shouldn’t the employer
divorce him from the position he is at? He can be retrenched”.
The above statement evinces a wilful and deliberate set mind to disobey his
employer’s orders. It is plain from the record of proceedings that the respondent disobeyed
the Finance Manager‘s orders simply because he detested them and was therefore resisting
the HALA system that rendered him subordinate to the Finance Manager who was previously
his junior.
In resisting change both the respondent and his lawyer were oblivious to the fact
that in the ordinary run of things change is inevitable. Things cannot remain the same forever.
In Chirasasa & Ors v Nhamo NO 2003 (2) ZLR 206 at 220 MALABA JA as he then was
drove the point home when he said that:
“The appellants perhaps failed to appreciate that a contract of employment cannot
remain static throughout the whole of its existence regardless of the changes in the
fortunes of the business. Refusal to accept a change in the terms and conditions of
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Civil Appeal No. SC 86/15
employment necessitated by the commercial interests of a business may be a good
enough reason for terminating a contract of employment on notice. The decision to
terminate the appellants’ contracts of employment without hearing them was not
unlawful”
His Lordship’s sentiments find support from Thompson C in an article in the
Industrial Law Journal (1999) 20 ILJ 755 titled Bargaining, Business Restructuring
Operational Dismissal, where the learned author says:
“In a market economy driven by competition, change is a fact of life. Business must
adapt constantly to stay in the game, and this entails ongoing changes to terms and
conditions of employment. Everyone has an interest in the continuing progress of
individual firms and the economy as a whole”.
Although the respondent’s termination of employment was on account of
misconduct rather than notice, the point is made that an employer is entitled to alter an
employee’s contract of employment to suit changing business interests.
The changes must however be material, reasonable, fair and just. The employer
must not be motivated by caprice or ill will. He must not act willy-nilly in total disregard of
the employee’s rights and interests. Where the employer acts without just cause, the changes
will be deemed unlawful and the courts will not hesitate to intervene on the side of the
employee in the interest of justice. This is because the right to dismiss employees on the basis
of changed commercial interests is not a blank cheque for employers to dismiss employees.
In this case no such improper conduct can be attributed to the appellant because the HALA
system of administration which had the effect of altering the respondent’s contract of
employment was negotiated and agreed to with the Works Council according to law.
Judgment No. SC 68/18 9
Civil Appeal No. SC 86/15
The respondent conceded that the appellant had a right to implement the HALA
system of administration but only after consulting him.
There was however nothing unlawful about the employer’s orders as
demonstrated elsewhere in this judgement. The employer’s orders were perfectly lawful as
restructuring or reorganisation at the workplace is permissible both at statute and common
law. The Act does not impose any obligation on the employer to consult employees when
carrying out any restructuring exercise. The employer is only obliged to consult the Works
Council, which was done with no adverse comments from the works Council. The facts
however establish beyond question that the appellant went the extra mile of not only
consulting the works Council but the rest of the work force, the respondent included. The
appellant’s orders having been perfectly lawful, the respondent disobeyed them at his own
peril.
What this means is that the employer did not breach the respondent’s contract of
employment in any way. Whatever changes may have been occasioned by the restructuring
exercise are lawful because the restructuring exercise was authorised by law. If the
respondent was offended and could not countenance the lawful changes brought about by the
restructuring exercise, he was free to seek lawful termination of his contract of employment
instead of disobeying lawful orders. This is because while awaiting the resolution of his
grievances he remained an employee of the appellant to whom he owed the duty of
obedience. He fell short in this respect.
It was however untenable that the respondent as an employee could remain
ensconced in the old system of administration when the employer and all the other employees
Judgment No. SC 68/18 10
Civil Appeal No. SC 86/15
had migrated to the new HALA mode of administration. The respondent’s adherence to the
old system of administration would have caused untold havoc at the work place thereby
rendering the HALA system virtually chaotic and ineffectual to the detriment of the entire
enterprise.
Although the respondent’s complaints are premised on demotion, the facts prove
otherwise. He was employed as an accountant. He continued to earn his salary in terms of his
contract of employment. His only objection was that the Finance Manager had been promoted
above him. His contract of employment however gives him no entitlement to promotion nor
does it inhibit the promotion of any employee over him. While the Finance Manager may
have been his junior prior to the implementation of the HALA system of administration, he
ceased to be his junior and became his senior with effect from 28 September 2011 when the
HALA system was implemented. From henceforth onwards the respondent was obliged to
take instructions from the Finance Manager.
The respondent’s refusal to obey the Finance Manager’s orders on account that he
was previously his subordinate has no basis in law because promotion is at the discretion of
the employer. In the absence of an express or implied term in his contract of employment
entitling him to promotion, the respondent had no right to promotion or to block other
employees from promotion.
His contract of employment does not also entitle him to any particular office or
laptop. An employee given the employer’s property for use in the course of employment does
not acquire ownership or exclusive dominion over that property. It remains the employer’s
property with full rights of ownership.
Judgment No. SC 68/18 11
Civil Appeal No. SC 86/15
It is trite that the appellant as the owner of the office and laptop in question had
dominion over them and absolute right to determine how they were to be used without let or
hindrance. The mere fact that the property had been previously allocated to the respondent for
his exclusive use did not constitute a lawful encumbrance to the appellant to re-allocate the
benefit to someone else other than the respondent. Despite having allocated its property to the
respondent, the appellant retained the residual rights of ownership to reallocate and control
the property.
The employee’s obligation to obey all his employer’s lawful orders is well known
and has been the subject of a plethora of decided cases in our jurisdiction and beyond. In the
recent case of National Employment Council for the Catering Industry v Kundeya & Ors
2018 (2) ZLR 2016 189 at 191, this Court had occasion to restate and elaborate on the
fundamentals of the need for employees to obey their employers’ lawful orders as the
bedrock of the contract of employment. In that case the court had this to say:
“Both at common law and statute an employer/employee relationship can only subsist
in an environment where the employee is ready and willing to submit to the
employer’s lawful authority.
Submission to the employer’s authority is a fundamental ingredient of the contract of
employment without which it cannot exist”.
The facts in this case clearly show that the respondent deliberately defied his
employer’s lawful orders not once but on numerous occasions. His conduct in this respect
undoubtedly amounted to a wilful repudiation of his contract of employment as the contract
could no longer exist in circumstances of persistent wilful insubordination to his employer. In
the circumstances the court a quo erred and misdirected itself in coming to the incorrect
conclusion that the employer’s orders were unlawful. As the respondent’s disobedience was
Judgment No. SC 68/18 12
Civil Appeal No. SC 86/15
so serious as to go to the root of the contract of employment, dismissal was unavoidable. It is
accordingly ordered:
1. That the appeal succeeds.
2. That the judgment of the Labour Court reversing the judgment of the appellant’s
Internal Appeals Committee be and is hereby set aside with costs and replaced by
the following order:
“The appeal be and is hereby dismissed with costs “.
GARWE JA: I agree
GUVAVA JA: I agree
Matsikidze & Mucheche Commercial and Labour Law Chambers, appellant’s legal
practitioners
Makoni Legal Practice, respondent’s legal practitioners