GEORGE MAKINGS 2013 LABOUR LAW UPDATE

GEORGE MAKINGS
2013 LABOUR LAW UPDATE

TOPICAL ISSUES IN LABOUR LAW 

INTRODUCTION

The purpose of this presentation is just to give an overview of issues that we believe are topical at this time and to hopefully provide a little guidance as how best to address them if they arise in your Company.

The issues that we have chosen to address are:

        i.            Company invasions under the pretext of indigenisation.

      ii.            The issue of employee share ownership schemes.

    iii.            Critical issues regarding the amendments to the Labour Act.

    iv.            Application of Zimbabwe Labour Law to International NGO’s and Diplomatic Missions.

      v.            Use of lie detectors in Labour cases.

COMPANY INVASIONS UNDER THE PRETEXT OF INDIGENISATION

        i.            There have been some recent high profile invasions of businesses where the persons who are seeking to take over the business are arguing that they are doing so under the legislative provisions of the Indigenisation legislation.

      ii.            Clearly the Courts have spoken out very strongly against these illegal activities in the cases of both Renco Mine and more recently where a property company was taken over and demanded that tenants of the properties the company owned pay rents to them.

    iii.            The Courts made it very clear that the indigenisation legislation was not intended to see the transfer of shares in a business to an indigenous Zimbabwean, where there had been no payment for those shares. The Honourable High Court Judge, Happious Zhou, put it very succinctly when he said ‘This matter presents a very sordid picture of a culture of wanting to reap where persons did not sow”.

    iv.            It is critical for businesses to stand up against this illegal activity, not because they want to be seen to be against the indigenisation process per se, but it must be done in a manner that protects property rights, where persons coming into the business pay value for their share and are both willing and able to invest in the on-going growth and development of the business. Without this, all that will occur is asset striping, maximisation of drawings and the demise of the business that will not only affect the non-indigenous owner of the business, but the entirety of those employed by the business.

      v.            So what should businesses be doing to counter this? It is my belief that an attempt by anyone to force themselves into your business should be strongly resisted. I would have strong legal support available at short notice and I would brief my workforce as a whole on your support of the process of indigenization as a tool to foster local investment, but not as an instrument for persons in no way connected with the business to get a significant share of the business for nothing

    vi.            There does seem a trend emerging that Labour unrest is either created or taken advantage of as being a basis for the invasion of the business, but clearly this has no legal standing to it as mechanisms to address any forms of Labour unrest have been in place in this country for a considerable period of time and they have adequately resolved dispute in the past and will do so again in the future.

  vii.            Clear and sustainable Security procedures, to protect access to your business and their physical assets should be in a place that does not allow anyone off the street to march into your business and commandeer assets belonging to you. Persons in authority must be briefed as to what to do if someone suddenly pitches up at the company with the intention of taking it over, so that valuable assets are not released to this person merely on the basis of their intimidatory approach.   

 SHARE OWNERSHIP SCHEMES  

        i.            Another issue closely related to the Indigenisation Legislation is the provision of share ownership schemes for Workers and the local community

      ii.            Most schemes that have been entered into for Workers have involved the provision of a percentage of the shares, usually about 10%, into a Workers Trust where the Workers do not pay for those shares, but they are paid off over time through dividends being issued going against the purchase of the shares. Obviously not all share schemes are the same and various schemes seem to follow various options, but this would seem the most common arrangement. Shares are not divested into the hands of individual Workers and most schemes do not allow Workers, who leave their employment access to the shares that remain in trust for those who remain in employment

    iii.            The downside of these schemes is dealing with expectations of the Worker participant in the scheme, as the benefits are likely to be long term and dependent on the health of the business, as the declaration of a dividend is obviously dependent on the state of health of the business at any given time.

    iv.            I do not believe that schemes of this nature are suitable for external investors as the purpose of indigenisation schemes is to have local investors invest in a business to see it grow, not to get a share of a business at the expense of the current investor. Working and Investment capital is very scarce at present and most companies, whether indigenous or not, would welcome new investors.

      v.            Community Share Schemes have tended to relate to situations where the Community have given up some of their land to allow the business being established and at this time they mainly relate to Mining Companies, but again the same principles of participation through either paying for the shares or through the surrender of dividends apply.

    vi.            Most organisations partaking in the above schemes are looking for the shares to be paid for, before allowing direct board participation and one can see that this follows normal company practice.       

 

CRITICAL ISSUES REGARDING AMENDMENTS TO THE LABOUR ACT

        i.            Some years ago, the a Tripartite Committee of persons involved in Labour issues got together to look at amendments to the Labour Act and came up with a fairly detailed report where certain issues, it was agreed by all Parties, needed to be addressed, while with other issues Parties had different ideas  as to how they needed to be approached.

      ii.            Assuming that we are, as a country, looking to become a possible avenue for international investment and that is not that clear as the right hand does not seem to know what the left hand is doing in Government, there are a few critical labour law issues that will need to be addressed. The uncertainty over whether one can have employees on fixed term contracts, for how long and in respect of what type of work needs to be addressed, as recent judgments from the Labour Court are clearly in conflict with the Labour Act and this uncertainty is not healthy. With respect to the Labour Court, it is not their job to legislate, that is Parliaments job and they need to look at this.

    iii.            A further critical issue that needs to be looked at and is closely related to the issues of contractual employment is the current retrenchment process. Contractual employment is always going to be attractive, where absurdly high packages have to be paid for a permanent employee who you are having to retrench after a year’s service and you are required to pay up to a year’s additional remuneration just to get rid of him. (3 months cash in lieu of notice, cash in lieu of leave, 3 month’s severance pay, 1 month service pay and up to 3 months relocation pay.) We need to address this issue by adopting an approach similar to what has been put into place in S A and elsewhere where a fixed manageable package of 1 or 2 weeks for each year of service is laid down as a fixed payment that you can make provision for as service accumulates. If this were addressed, one would find that the issue of contractual labour would also be more readily resolved.

    iv.            While it is appreciated that in the current environment, where the issues of the Constitution, the Referendum and the Elections are to the fore, there is no prospect of the above issues being addressed, it is something we need to look at seriously in the future as we do not want aspects of our Labour Legislation to deter investors.

APPLICATION OF ZIMBABWE LABOUR LAW TO INTERNATIONAL NGO’S
AND EMBASSY STAFF

        i.            While it is not an issue with all International NGO’s and Embassies,  local hire employees, whose terms of employment are clearly not expatriate and therefore subject to the home nations labour law, need to be protected by our Labour Law and the relevant CBA for the Welfare and Educational Institutions needs to be enforced against these Employers.

      ii.            There is no problem with differing conditions of employment for local hire and expatriates as one understands that expatriate employees need to be rewarded against their home country conditions of employment that they have a right to expect. One cannot enforce those conditions in favour of local hires who are often employed on fixed term contracts, but that does not mean that those Employees have no rights in law and fall between two stools. Persons employed in these circumstances need to be aware of their rights and need to enforce them, but equally they need to recognise that an employer has a right to enforce his rights in terms of the local Labour Law as clearly one cannot take the best of two alternative systems and look to enforce a combination of local and expat conditions.

    iii.            Many Employers in this Sector are not wilfully in default, but just do not appreciate the position of their local hire employees and often assume that their conditions of employment are a matter for the Employee and them as the Employer to sort out a stance that is not sustainable in our law.

USE OF LIE DETECTORS IN LABOUR CASES

        i.            Security Companies are increasingly looking to use polygraph machines in helping to establish a case against an errant employee and the question often raised is – “is this  legal ?”

      ii.            In the SA case of Sosibo & Others vs CTM, the Court expressed a reluctance to rely on a polygraph test because the person who conducted it was not a qualified and registered Psychiatrist, because the results were in any case only an indicator of deception and in any event the results of a test on its own, without corroborative evidence, was insufficient to warrant the discharge of the Employee. I am of the opinion that, although this is a South African case, our Labour Court would be likely to take a similar line.

    iii.            This does not mean that in all cases no value can be put on a polygraph test as clearly the above shortcomings are not insurmountable, but it does show one needs to tread carefully before placing too much reliance of polygraph tests

    iv.            Use of the test as a general indicator for further more thorough investigation, is clearly acceptable, but it is the result of this investigation, in terms of solid damaging evidence, that will determine the fate of an Employee highlighted as a possible candidate for a disciplinary charge by a polygraph test.

THE SETTLEMENT OF DISPUTES

(SI 217 OF 2003 AS AMENDED BY SI 43 of 2011)

AND THE

ARBITRATION REGULATIONS (SI 173 of 2012)

INTRODUCTION

        i.            These regulations and a commentary on them form part of the handout that you received when you came in this morning so I do not intend to just repeat all that is in this document. What I am going to do is to try and provide guidance to assist you in the use of the regulations to your best advantage as a H.R. Practitioner representing the interests of your Company.

      ii.            I am obviously not able to fully appreciate each and every concern each participant may have, but ample question time will be available throughout the seminar.

THE SETTLEMENT OF DISPUTE REGULATIONS

        i.            Some of my Clients are confused as to the role of a Labour Officer /DA in the conciliation process. Conciliation, as the word conveys, is a process of attempting to find common ground so that the parties to the dispute can find their own solution. A Conciliator can advise, to some extent persuade,  but he cannot direct or order, no matter how silly one party’s argument might be, so if this is what you are expecting, it will not happen .

      ii.            I have, on occasions at a conciliation hearing, had the other party argue that a Certificate of no settlement should not be signed and the matter should not be referred to Arbitration. This seems to be contrary to the Regulations if one looks at section 5(1). However, in terms of the Labour Act, which over-rides the regulations, where there is a dispute of interest and one party does not want the matter to go to Arbitration, the L.O. has no right to send the matter to Arbitration without the agreement of the parties, unless the dispute is in an essential services sector. This proviso does not apply to disputes of right.

    iii.            Rights of representation at a Conciliation Hearing are a contentious issue in that Consultants and persons from unregistered unions are demanding rights of appearance. I personally do not raise any objection to whoever someone wants to represent them, but in terms of these regulations, it is clear that the right of representation is not absolute, it has to be a fellow employee, an official of a registered Trade Union or an Employers Association or a Legal Practitioner. Effectively, this cuts out Consultants and it also cuts out persons who are not from a registered Trade Union and I do not read a registered trade union to encompass a Federation of Trade Unions, so ZCTU and ZFTU have no right of representation. What you chose to do about this is very subjective.

    iv.            I always insist with a Conciliator that costs be on a 50/50 basis and in most cases this lead is accepted but, the apportionment of costs is the prerogative of the Conciliator, so you cannot insist on a particular cost breakdown, but the criteria in terms of deciding is ‘equity’.

      v.            The regulations were, for reasons best known to the Draftsman, amended to take out the “sub clause” in Section 6 that allowed an appeal on a question of law in respect of an Arbitral Award, but this has no force and effect as Section 98 (10) of the Labour Act still allows an Appeal on a question of law in a compulsory arbitration (Voluntary Arbitrations are dealt with in terms of the Arbitration Act and the Labour Act and Regulations do not apply).

    vi.            In terms of an Appeal against a compulsory arbitral award, I would suggest you keep to the 14 working days time limit, although I feel it could be argued that 21 working days, the general time limit for appeals to the Labour Court, could be applied here

  vii.             Arbitral awards can be registered and as such a writ of execution can be issued by the Court with which it is registered. If you are looking to resist this, it is a good idea to apply for a stay of execution of the award being appealed against at the time you appeal, so you have something to show the Deputy Sheriff if he is looking to attach property. It can be argued very strongly I believe that an application for a stay of execution is not necessary in an appeal  against a compulsory arbitration award as this is automatically suspended by the appeal in light of the High Court Judgment in the case of Dhlodhlo versus Deputy Sheriff of Marondera and Others HH 76/2011

viii.            Arbitrations can be conducted in the absence of one of the parties, but in my opinion that is only where the absence is without a reasonable excuse. I have seen some arbitrations where the absence of one of the parties is deliberately engineered and an award delivered. In this case I would fight this and apply to have the award set aside.

    ix.            Strikes in terms of the Labour Act (Section 104(e)) require a secret ballot to be held prior to a strike and for the majority of the employees threatening to go on strike to be supportive of the strike. Section 8 of these regulations details how this balloting will take place. The requirements here are clear but important to note is that the balloting must be overseen by a LO/DA, ballot papers must be provided and the process must be secret- a show of hands is not enough. Only those who voted shall be counted which seems a little daft as if 2% of the Workers vote and the majority of them are in favour, the strike can take place.

      x.            Attached to the Regulations are a number of forms which you should be familiar with and use for the purposes stated as if you just write a letter in pursuance of a right in terms of these regulations, you could find your case is found to be improperly founded and thrown out.

THE LABOUR ARBITRATION REGULATIONS (AS CONTAINED IN SI 173 of 2012)

        i.            These regulations apply to compulsory arbitrations only,  not to voluntary arbitrations terms of the Arbitration Act, even if the issue being arbitrated upon is a Labour issue .

      ii.            If a person wants to undertake compulsory arbitrations, there is a requirement for them to be registered in terms of these regulations and they should have Certificate of Registration to show this. To be honest I have not seen any Certificates of Registration as I tend just to accept the appointed Arbitrator in light of the 1 year deeming clause (Section 9 of the Regulations)

    iii.            Registration is now on a basis of qualifications and experience, but the problem is that the fees are so minimal that the more experienced Arbitrators will not be prepared to work for fees of this level.

    iv.            There is a process of record keeping introduced by the Regulations where all determinations must be forwarded to the Ministry of Labour and records of arbitrations done must be kept for 5 years. This is going to be of little value, unless the Ministry introduce some sort of quality control/review for each decision, but I do not think they have the capacity to do this.

      v.            The regulations have a code of ethics that Arbitrators are required to observe that address issues of confidentiality, impartiality, natural justice, exposure of prior relationships with parties appearing before an Arbitrator and the requirement to recuse ones self if requested to do so. I am not sure that is a good idea as it will be open to abuse to try and get rid of an Arbitrator one party is uncomfortable with. Disclose of an award must be to both parties simultaneously, rather than favouring one party. No canvassing for Clients is allowed.

    vi.            There is also provision for criminal sanction for failure to comply with the regulations.

HOW TO DEAL WITH THE INCREASINGLY COMMON ALLEGATIONS OF A “CONSTRUCTIVE DISMISSAL”

INTRODUCTION

        i.            Under this topic I intend to look at what constructive dismissal is and what it is not.

      ii.            I will also address what I believe is the way to handle allegations of constructive dismissal and what evidence you need to look for to counter these allegations.

WHAT IS CONSTRUCTIVE DISMISSAL

        i.            Section 12B(3) of the Labour Act reads ‘An Employer is deemed to have been unfairly dismissed (a) if the employee terminated his contract of employment with or without notice because the Employer deliberately made continued employment intolerable for the Employee.’ This is what is referred to as a constructive dismissal.

      ii.            If one looks at this definition, there are a number of critical elements that would need to be present for a successful claim of a constructive dismissal. Firstly, the Employee must have tendered their resignation. Secondly, that resignation must have come about because of intolerable conditions of employment and thirdly it must be shown that the conditions of employment were deliberately engineered to make the continued employment of the Employee intolerable. Each of these requirements needs to be addressed.

    iii.            It is my belief that an Employee alleging that they have been constructively dismissed should, at the time of their resignation, make reference to the fact that their continued employment has become intolerable and there should be a basis for coming to that conclusion that should be addressed in the resignation. I do not think it unreasonable for the Employee to be required to show that the concerns that he has/had, that in his opinion made his continued employment intolerable, should have been brought to the attention of his Employer to give the Employer an opportunity to address them and equally to show that given that opportunity the Employer did not do so, thereby steering the Authority towards concluding that the Employers action must have been deliberate.

    iv.            There are numerous SA case authorities on this issue which I do not intend to quote in this paper, but aspects that have been addressed by the Courts in SA are: as it is an extraordinary form of dismissal, it is not easily accepted by the Courts: no reasonable alternative to resignation was available: the aspects that are allegedly what is making continued employment impossible must have been raised as a grievance with the employer and been ignored or not addressed: the Courts have determined that the onus of proof lies with the Employee alleging the constructive dismissal.

      v.            If an Employee resigns from his employment because he is not happy with the working environment for whatever reason, but he has not brought his concerns to the attention of his Employer and he makes no mention of them in his resignation, this cannot, in my opinion, constitute circumstances that constitute a constructive dismissal. I have on a number of occasions with my Clients had an Employee resign because some sort of conflict has arisen between that Employee and Management of the business. After the resignation and in my opinion as an afterthought, perhaps on the advice of a Lawyer/ Trade Union Official, suddenly and for the first time the allegation that this resignation was in a circumstance of a constructive dismissal is raised. I do not believe that this can be successfully prosecuted and it should be opposed in the strongest of terms.

 

    vi.            In many employment situations Employees are not happy with what their Employer may require of them, businesses are restructured- out with the old in with the new- Managers are required to embrace change and as is common with human nature do not like it and decide to move on. There is a tendency in Zimbabwe to believe when this happens, even though it is the Employee who wants to leave and the Employer is most certainly not embracing change to get him to leave, the Employee believes he should go with a package and to justify this he argues that his resignation is a constructive dismissal. In my opinion it is not. The essential element that the working conditions were deliberately engineered to make the working position of the Employee intolerable is not present. It can often be shown that this is not the position but getting those who embrace the change to give evidence of why they feel the new way of operating the business is a significant improvement on the old and it is only those not wanting to embrace the change, wanting to stay with the old, that are complaining and looking for relief.

WHAT IS NOT A CONSTRUCTIVE DISMISSAL

        i.            In my experience of late, every disengagement that is being contested the allegation of a constructive dismissal is raised.

      ii.            I have had experience of a person who has been dismissed by his Employer through a disciplinary process alleging the dismissal was a constructive dismissal. I can see no justification for this, as the fundamental element in a constructive dismissal is missing in that the Employee did not resign, he was fired. If the dismissal is being contested for procedural or substantive reasons that is obviously the Employee’s right but it does not make it a case of constructive dismissal.

    iii.            I have had instances where persons have resigned in that resignation they have made no mention of intolerable working conditions and no evidence to support a contention of constructive dismissal is led, but nevertheless a constructive dismissal, after the event, is now alleged once someone realises if they raise this as an issue some form of damages may have to be paid. Again in my opinion this is not a valid claim of constructive dismissal.

    iv.            I have seen cases where an Employee has been overlooked for a promotion, or not paid a bonus they feel is due to them, alleging a constructive dismissal while still employed. This cannot be a constructive dismissal, unless the Employee resigns and argues that his resignation was because his working environment had become intolerable. The difficulty here is that if an Employee is not successful in his claim, he has no basis on which to withdraw his  resignation so one wants to be a little careful in raising allegations of constructive dismissal where one’s case is not watertight.

  

WHAT SHOULD AN EMPLOYER DO WHEN FACED WITH AN ALLEGATION OF CONSTRUCTIVE DISMISSAL

        i.            Firstly, do not be intimidated into looking to pay out a package, just to avoid having to defend yourself against such an allegation.

      ii.            Often all that is alleged is that the dismissal arose out of a constructive dismissal and nothing further is received. In that case, I would go back to the Employee or his representative and ask for particulars as to why it is felt that the incident complained of amounts to a constructive dismissal.

    iii.            Once you receive particulars, treat them seriously and establish whether there is any basis to the allegations or not - do not just fob them off and go into a dispute poorly prepared. Look at the elements that need to be present to get an allegation seriously looked at and see if any are present. If they are, look to how they arose and see if an explanation is available that shows that although something has happened, it was neither deliberate or designed, to make the Employee’s working life intolerable. Look to how, if there are concerns, these could be addressed to allow the Employee to return to work, as invariably the Employee is not looking to come back but rather to get some additional payment out of his Employer and a willingness to address issues shows clearly that the actions were not deliberately designed to make life intolerable which is a primary requisite for a constructive dismissal case.

    iv.            If you are not sure, get advice, rather than being railroaded into a settlement on a constructive dismissal allegation that if contested will fall apart at the seams.  

2006  NATIONAL  CODE OF CONDUCT  REGULATIONS

AND

IMPLICATIONS OF A “TERMINATION BY MUTUAL AGREEMENT”

INTRODUCTION

i.            In this presentation I am not going to go through the National Code word for word as it has been around a long time and we have looked at it previously in other Seminars. What I intend to do is address areas that in my experience seem to cause people problems when using this Code in such areas as: its use against other codes: using it as an instrument to improve behaviour, not just to discharge: Hearing Authority against Committee: duration of warnings: rights of representation.

ii.            In addition I will look at use of a mutual agreement to terminate services,  look at current packages in terms of what is it reasonable to pay to get someone to leave your employment and the pitfalls to avoid.

THE NATIONAL CODE

        i.            I have always said the National Code is a disappointing document and I still hold that opinion. This could so easily have been a very well constructed code to encompassing in its content all aspects of the disciplinary process that so many of the better registered codes do. With a sample base of over 150 registered codes one would have thought the Ministry could have come up with a better document.

      ii.            The National Code comes into play when you are seeking to discipline someone not covered by a registered code. It is not an alternative option when someone does not like the code registered for his sector/company and you cannot bounce between codes. It is not unusual for Unions to try and argue that an NEC code applies to Managerial Employees particularly where the wording in the code  refers to ‘all employees including managerial employees’ but I believe there is a strong argument that says an NEC code cannot bind people not falling within the scope of the NEC . Managerial Employees do not fall within the scope of an NEC.  

    iii.            The contents of the National Code are very light on substance, leaving a lot of questions unanswered. I do not believe that it is unreasonable for an Employer using the National Code to fill in the gaps. If you have a code that is registered, that applies to your Workers, use that Code to fill in the gaps. The sort of gap I am referring to is, if you are not going to discharge, but want to give a warning what types of warnings should you use and what would be an appropriate duration- most code make provision for a written warning, a second written warning and a final written warning before discharge and the duration respectively would normally be 3 months 6 months and 12 months. There is no reason why you cannot adopt this as an approach to fill that gap in the National Code.

    iv.            Representation at a hearing is often a sticky issue both from a point of view of who should be the Representative and what rights that person has regarding the holding of the hearing. The provisions of Section 6(4) (b) are fairly wide in that it refers to a  right to be represented by a fellow Employee, a Workers Committee Member, a Trade Union Official/Officer or a Legal Practitioner. There is a tendency of late for persons to arrive at a hearing demanding the right of representation where they do not fall in any of the above ( e.g. a Consultant or a Union Official of an unregistered Union or an Office Bearer of a Federation of Trade Unions) I believe you have a right to oppose this representation, but whether you do or not is a very subjective decision. I would strongly advise you do not allow a representative to by his delaying tactics to take you beyond time frames within the Code without a waiver of time limits being obtained from the representative in writing before agreeing to the delay, even if that means the hearing takes place in the absence of the Employee being charged and his Representative.

      v.            In light of what I have said above, it probably goes without saying that SI 15 can be used to give a formal warning at the close of a hearing if it is felt more appropriate than a discharge. Do not be concerned in taking this route as it makes a lot more sense than discharging when it is not warranted just because you are using an instrument that is centred around discharge

    vi.             As I read SI 15, I am of the opinion that the disciplinary process can be conducted before either a Disciplinary Committee, or a Disciplinary Authority. I read disciplinary authority to be a single person (see section 3(b) where the reference there is clearly singular) while the Committee is made up of Representatives from the Employer and the Employee, but it does not refer to any particular numbers or even that the numbers must be equal on both sides. It would seem to me to make sense to use this to best advantage by using a single managerial employee as the disciplinary authority, or if you are going to use a committee by having a committee of equal numbers from both sides with an additional managerial employee as Chairman with a casting vote or equal numbers from both sides but with an Employer Chairman having both a deliberative and if required a casting vote. I feel that where the definitions are so loose that it makes sense to interpret them to best advantage until this is either corrected by way of an amendment or there is judicial authority on the interpretation.

MUTUAL AGREEMENT TO TERMINATE SERVICES

        i.            Section 5 (c) of SI 15 makes provision for services to be terminated by a mutual agreement in writing. Two obvious elements to this process are you must show there has been a mutual agreement to terminate services and secondly that it has been reduced to writing.

      ii.            At times I think there is confusion between the unilateral decision to terminate services that occurs when an employee tenders an unconditional resignation and a mutual agreement to terminate. Resignations do not require mutual acceptance and are effective when tendered and cannot be withdrawn unilaterally by an Employee. There is no basis on which to argue that after a resignation an employee can demand that a package be negotiated to reward him for services rendered after his lawful terminal benefits have been paid. The time, if there is one to negotiate a package, is prior to the resignation and it is at this time an agreement may be entered into as opposed to a resignation on its own.

    iii.            There is no basis to argue that upon an agreement being reached a package being paid in terms of that agreement for there to be another ‘bite at the cherry,’ where the Employee, or a newly appointed representative, arrives and seeks to argue that the package paid was ‘not enough’. As long as the legal terminal benefits have been paid (cash in lieu of notice, cash in lieu of leave and a gratuity if applicable) any amount over and above that is discretionary and as such there is no figure that can be described as ‘not enough’.  I would strongly recommend that once you have settled a matter by a mutual agreement in writing, payment has been made in terms of that agreement, that you indicate the matter is closed and we will see the person complaining in ‘Court’ if they have a problem.

    iv.            iv. Slight adjustments to a package are often seen as less of a problem than fighting a claim, but inappropriate behaviour that is rewarded will be repeated so make a stance from day one.

      v.             How do you determine what is a suitable package to pay someone to leave? How long is a piece of string- it is impossible to give an accurate figure to fit every circumstance ,but I feel you should look at things like: do you have a sound basis to take disciplinary action leading to a discharge you can defend, if so the package does not need to be as high as if you don’t : Can you live with the offender for the period it will take to develop a strong disciplinary case against him and if so are you prepared to put in the necessary time and energy to do this? If the answer is “yes” to both, don’t pay a package, if it is “no” to either, pay and probably look at a sum similar to a retrenchment package          (3 month’s severance pay. 1 month for each year of service 1 to 3 months relocation pay): I would not refer to this form of disengagement as retrenchment as it is not just use the package as a guide as to what to pay. 

    vi.             The secret to successful disengagements, by way of a written mutual agreement to terminate, is I feel in the paper work. I would always recommend that your agreement reflects the background to the event that led to the agreement arising (e.g.outline the options discipline or an agreed package and show the package was taken as a chosen preference). Include in the paperwork a reference to the fact that the agreement is entered into freely and voluntarily, after the options have been explained, understood and the disengagement has been taken as the preferred option. Put in a clause that it is in full and final settlement and that no further action in any forum by the Employee, or any third party on his behalf, will be taken to recover further monies arising out of his employment with you. Let the employee write it out himself under your guidance.

  vii.            Remember expediency and the payment of money to solve a problem is not always the right option. There are times where the process needs to go the whole way if, for no other reason, that it sends a message to your Workforce that you will stand firm and to give you the satisfaction of being able to be chuffed with a job well done, as opposed to rewarding someone who does not deserve a reward at all.

“LESSONS FROM
 SELECTED COURT JUDGEMENTS”

INTRODUCTION

In this presentation I will go through a number of cases that address issues that I feel may be useful to Practitioners who are looking for cases to support arguments that they may be raising, particularly at the level of the Labour Court that is, unfortunately in my opinion getting very legalistic in its approach to labour disputes, probably because more and more of those persons appearing in front of the Labour Court are being represented by Lawyers.

The cases referred to here have the case heading and reference included, then a brief summary of any relevant facts and then a brief explanation as to the legal point being made by the judgment.

I hope Participants will find them useful

CASE  1

PRETORIA SOCIETY FOR THE CARE OF THE RETARDED VERSUS LOOTS (1997) 18ILJ 981 LAC

This Case very clearly lays out what the enquiry will be where a Court is faced with an allegation of a constructive dismissal and it states the following ‘The enquiry is whether the appellant (in this case the Employer) without reasonable and proper cause, conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. It is not necessary to show that the employer intended any repudiation of the contract; the courts function is to look at the employers conduct as a whole and determine whether … its effect judged reasonably and sensibly is such that the employee cannot be expected to put up with it.

The judgement goes on to say  “When an employee resigns, or terminates the contract as a result of constructive dismissal, such an employee is in fact indicating that the situation has become so unbearable that the employee cannot fulfil what is the employees most important function, namely to work.” The employee is in effect saying that he would have carried on working indefinitely had the unbearable situation not been created .  He does so on the basis that he does not believe that the employer will ever reform or abandon the pattern of creating an unbearable work environment. If he is wrong in this assumption and the employer proves that the fears were unfounded, then he has not been constructively dismissed and his conduct proves that he has in fact resigned

The above passage shows fairly clearly that constructive dismissal is an extraordinary form of dismissal and will not be readily accepted by the Courts.(see Murray v Minister of Defence 2006 ILJ 1607 C ) There must be evidence that there was no reasonable alternative to the resignation and it was done as a matter of last resort ( see Coetzer and the Citizen Newspaper 2003 ILJ 622 CCMA)  after failing to resolve the matter through the lodging of a grievance (see Foschini v CCMA 2008 ILJ 1515 (LC) ) and it can only come about where there has been a resignation (see Nsabo v Real Security 2003 ILJ (LC) ).  The onus of proving constructive dismissal lies on the employee, as he is the one claiming it (Fourie v J L Booysens  t/a  Makelaars 1995 4 LCD 407 (IC) ).

CASE 2

CHAMBER OF MINES vs ASSOCIATED MINE WORKERS UNION OF ZIMBABWE LC/H/250/12

This case dealt with an application for the review of a Compulsory Arbitration, where the Arbitrator awarded an increase of 20% for the Mining Industry and the Employer’s Association, the Chamber of Mines called for a review of the Arbitrators decision on the basis that he had failed to give proper attention to the facts in a number of areas.

The Labour Court, in a very sound judgment, found that awarding an increase of 20%, where that figure was plucked out of the air, could not be sustained and using inflation of 5% as a guide reduced the award to that figure

This case is useful as it serves to focus the minds of those involved in Arbitrations on wages, on what the basis is for their award, instead of just find a suitable compromise figure somewhere between the positions adopted by the two parties.

 CASE 3

PHIRI & OTHERS vs INDUSTRIAL STEEL AND PIPE (Pvt) Ltd 1996 (1) ZLR 45 (S)

The facts of this case are not relevant but the point made here is that the Courts will abide by the common law, unless it is clear that Parliament has expressly, with irresistible clearness, changed that common law position. It is this reasoning that led the High Court in the case of DHLODHLO versus DEPUTY SHERIFF OF MARONDERA and OTHERS HH 76/2011 to come to the conclusion that where an appeal is made against a compulsory arbitration award, that appeal automatically suspends the award as the Labour Act does not, in appeals of this type, as against other appeals, expressly override the common law principle, that an appeal suspends the decision appealed against . It should also be noted that the Judgment in the High Court case of GAYLORD  BAUDI versus KENMARK BUILDERS HH/4/12 does not override the judgment in the DHLODHLO case as one High Court Judge cannot over-rule another. 

CASE 4

 COLCOM FOODS LIMITED Versus HENRY KAHARI &40 OTHER SC34/09

The facts of this case were that employees went on an illegal strike in support of a stay away called for by the ZCTU. The Company then looked to discipline them, but this became impossible as the Workers Committee, one party to the disciplinary committee, refused to take part in the hearings. After 30 days lapsed, the Company referred the matter to Labour for conciliation and after this it was referred by Labour to Arbitration where the Arbitrator allowed the dismissal. The Labour Court supported this when an appeal came to them. The matter was appealed to the Supreme Court on two grounds, one of which was that the case should not have been referred to Arbitration there being a code in place. The Supreme Court held this was perfectly acceptable as it complied with section 101(6) of the Labour Act

The value of this case lies in providing an alternative avenue to an employer when Worker Representatives seek to prevent the normal operation of a code by withdrawing their participation in the disciplinary process.

CASE 5

 MUROWA DIAMONDS VERSUS UNION MAKUMBE SC /16/09

The facts of this case are not relevant to the legal point being addressed.

In this case, the Appellant sought to ignore the appeal procedures laid down in the Code applicable to him and to proceed directly to the Labour Court. The Supreme Court held that where a person looks to come directly to the Labour Court, without following the laid down appeal channels, the case should not be heard and should be returned to the correct jurisdiction (although in this case the Supreme Court did determine the matter and threw it out).

CASE 6

BARCLAYS BANK OF ZIMBABWE LIMITED Versus SHEPHERD NDIRAYA  SC 72/05

In this case, the Employee was charged with an offence, but was incorrectly found guilty of an offence that he was not charged with. This lead to him being reinstated and charged once again with the same offence. It was argued on his behalf , through an urgent application to the Labour Court, that his employer should be barred from charging him again and the Labour Court granted that application which was appealed to the Supreme Court. The Supreme Court found that as he had not had a verdict on the charge initially raised, but had incorrectly been found guilty of a charge not raised, it was perfectly legitimate to charge him again ( in other words, this was not a case of double jeopardy, as he had not had a verdict on the charge he was originally charged with). 

 

CASE 7

ATHOL EVANS HOSPITAL HOME Versus MONICA MARUTA  SC/66/05

In this case, the Employee a member of a pension fund that had a retirement age of 60 was retired upon reaching the age of retirement. The Employee tried to argue that she was forced to retire and that as NSSA allowed for retirement at any age between 60 and 65, she should have been allowed to continue to the age of 65. It was found that she was not forced to retire, as the retirement age of 60 was part of the rules that she committed herself to when joining the pension scheme and as such the retirement age of up to 65 under NSSA was not relevant.

 In my experience, there are more and more persons arguing that they cannot be retired, but must be retrenched when the employer no longer requires their service at retirement age(whatever that age is and it should be specified as a condition of service) but clearly from the above case, it is permissible to retire an employee at the age specified by your Pension Scheme or the 65 age laid down by NSSA.

CASE 8

REDSTAR WHOLESALERS Versus EDMORE MABIKA  SC 52/05

This case revolves around the determination of damages and deals with an appeal by the employer against the determination of damages and back pay of nearly 6 years pay, the argument being that this is grossly excessive. Looking at the determination made by the Labour Court, the Supreme Court stated ‘The Labour Court’s approach was wrong and its consequent ruling was grossly unreasonable. The Court is not entitled to pluck a figure out of a hat because it is of the view that this figure ‘meets the justice of the case. ’ Instead the court is required to hear evidence as to how long it would reasonably take a person in the position of the dismissed employee to find alternative employment. The fact that the parties have led insufficient evidence to enable the court to arrive at an informed conclusion does not absolve the court from its duty to utilize its powers in terms of section 89(2) (a) (i) of the Labour Act by calling evidence in order to resolve the issue. 

 In this case, it was clear that the employee had, within a year, received two offers of employment, that fell away because of the pending case, but nevertheless the Supreme Court were prepared to take that 12 month period as a reasonable period and over turned the 2 year payment of damages award. The Supreme Court also worked that 1 year period back to the date that he was initially ordered to be reinstated and that the pay applicable be the rate that pertained at the time he was ordered to be reinstated and not from the date of the Labour Court judgment  four years later.

This case does not introduce any new concepts, but it reinforces the concept that damages must be mitigated from the date of dismissal and that the salary damages are worked out on are those applicable at the time of the initial discharge, not the time of the Labour Court hearing. This confirms the principle laid down in AMBALI versus BATA SHOE COMPANY  SC 56/99

CASE 9

NOREST TARUVINGA Versus CIMAS MEDICAL AID SOCIETY  SC/19/05

Norest was a lab technician at CIMAS on duty at night. While on duty he left his place of work and was away without authorisation for 4 hours during which time urgent work arose which could not be attended to until another lab technician was called in to do it. Norest was charged and dismissed and amongst various issues that arose was whether his actions correctly fell within the offence of sabotage within the NEC Commercial code. Of interest here was that arguments were raised that the normal meaning of the word “sabotage” did not fit what Norest had done, but the Supreme Court said it is not the normal meaning that you need to look at, but in what way did the code define sabotage and when that was looked at what Norest had done did fit the definition and as such his dismissal was upheld.

The point here is that the Code and its contents are to be interpreted against the wording used in the code not to what words or phrases might be taken to mean in the normal use of the word /phrase.

CASE 10

MUTARE BOARD AND PAPER Versus JAMES HOWARD MUTSAKA  SC 2/05

The employee in this matter was a clerk at the Company and was transferred from one clerical duty to another within the same department, but was moved from being a Stores Issuing Clerk to being a Yard Clerk. He was not happy with the move as he saw it as a demotion and a job that would require that he be out of the company premises doing truck deliveries. He tried to argue that this was a unilateral change in his conditions of employment and the Supreme Court looked at this issue. They made a finding that the positions were in the same department, the conditions of employment were exactly the same and as such this was not a change to his conditions of employment, but just a change to his position /job description and was well within the authority of the employer.

The point here is that one does not guarantee, when you employ someone, that this is the same job he will be doing for ever and lateral transfers, where basic conditions of employment remain the same, are perfectly legitimate. 

ROUNDUP OF SELECTED REGULATIONS

LABOUR RELATIONS (GENERAL) REGULATIONS AS CONTAINED IN SI 31/1993 AND AS AMENDED BY SI 154/2

        i.            These general regulations deal with the process of registering Trade Unions, Employers Associations and National Employment councils. Individual Employers need only be concerned that the body they are dealing with has been formerly registered as in terms of the Labour Act, as rights that exist in the hands of registered bodies and those not registered, are different and not nearly as wide for unregistered unions and employers association (see section 29 and 30 of the Act)

      ii.            Section 6 of the regulations makes provision for the registration of collective bargaining agreements that come out of an NEC. The agreements must be both registered with the Ministry and promulgated as a statutory instrument for the agreement to have a date of operation and to cover the full sector as opposed to binding just the parties who negotiated the agreement (see section 80 and 82 of the Act )

    iii.            Councils may, in terms of section 8 of these regulations, appoint Designated Agents to police the agreement. In terms of the amendment to these regulations, both DA’s and Labour Officers have extensive powers to carry out an inspection of your business, to check on compliance with the Labour Act, CBA, Health and Safety and to gather evidence of any possible contraventions of the applicable legislation. This right of inspection is, in my opinion, not one where it has to be by appointment , as the purpose would be defeated if an Employer had an opportunity to cover up any possible infringements.

    iv.            These regulations also deal with the issue of collective job action and detail how an Employer needs to make application for a show cause hearing. It allows for the Minister to authorise an authority to serve any disposal order on the Parties to the dispute. There are references in the relevant subsections of section 12 to sections 122 and 123 of the Act, but by the 2003 amendment, these incorrect references have been corrected to refer to sections 106 and 107 respectively.  In practice ,what happens if you make an application for a show cause hearing, the application is usually dealt with by the Labour Court as an urgent application. If this happens, the amendment allowing for an appeal from the decision of the Minister to be made to the Labour Court will fall away, but an appeal on a question of law will be available to the Supreme Court.

LABOUR RELATIONS (TERMINAL BENEFITS & ENTITLEMENTS OF AGRICULTURAL EMPLOYEESA FFECTED BY COMPULSORY ACQUISITION) REGULATIONS SI 6 OF 2002

i)                   These regulations are obviously very confined in their scope as the heading conveys , but we thought it worth mentioning them as they are sometimes quoted as authority for the proposition that retrenchment packages should be three month’s severance pay,  two months wages per year worked and one month’s relocation allowance, but this is not correct.

ii)                 These regulations clearly only apply to situations where retrenchment is arising out of the acquisition of a farm. They do not apply in any other situation,  including retrenchments in agriculture brought about by a downsizing in operations that have  nothing to do with compulsory acquisition.

iii)               At present, retrenchment packages are slowly reducing and are around 3 month’s severance, 1 month service per year worked and 1 month relocation, but these figures can be further reduced where the plight of the employer is clear and supported by good financial documentation

LABOUR (DECLARATION OF ESSENTIAL SERVICES) NOTICE SI 137 OF 2003

i)                   These regulations list all the sectors that have been declared essential services. The list contained in the regulations is fairly self explanatory, so I will not regurgitate it here. If one looks at the list, it has a clear public service bias, but a number of the services are provided by both public servants and those in private practice/service, so it would be useful to establish whether your sector is in the scope of one of the definitions of what constitute essential services  (If you are an essential service, there is no way a lawful strike can take place in your sector)

ii)                 If there is a prolonged strike, the Minister has a right to declare a sector an essential service which makes no sense to me at all, but it is premised on their having to be a danger to lives personal safety or health.

LABOUR COURT RULES
SI 59 OF 2006

        i.            We have a full guide to the Labour Court rules published by Howard Dean in the booklet on the Labour Court, so I will not be going through the entirety of the rules, but there is one area I feel worth addressing in this presentation .

      ii.            Up until recently the Labour Court Administrative Staff have been fairly relaxed concerning the lodging of appeals. As long as you were within the 21 working days you could lodge an appeal with your grounds of appeal attached and the Respondent would respond to your Grounds of Appeal without any significant concerns regarding delays in that response. If the Respondent responded to the Grounds of Appeal, these were taken as your heads of argument and the matter proceeded on this basis.

    iii.            This is no longer the position. You are required to lodge with your initial appeal your grounds of appeal and once these are lodged, you are required, within 14 working days, to submit your more detailed Heads of Argument and upon receipt of these, the Respondent must be served with a copy and he must respond to those Heads within 14 working days of receipt of those Heads. If these time frames are not adhered to, you will be required to apply for a condonation of non compliance, to allow you to continue in the Appeal/Response process. Relevant rules here are rule 15, 19 and 26.