Banking Employers Association of Zimbabwe v Zimbabwe Bank & Allied Workers Union

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/86/14
HELD AT HARARE 3RD FEBRUARY 2014
CASE NO
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IN THE LABOUR COURT OF ZIMBABWE		JUDGMENT NO LC/H/86/14

HELD AT HARARE 3RDFEBRUARY 2014		CASE NO LC/H/552/12

& 14TH FEBRUARY 2014

BANKING EMPLOYERS ASSOCIATION			Appellant

OF ZIMBABWE

ZIMBABWE BANK & ALLIED				Respondent

WORKERS UNION

Before The Honourable G Musariri, Judge

For Appellant		Mr A Moyo, Attorney

For Respondent		Mr E Matinenga, Advocate

MUSARIRI, G:

On 5July 2012 the Honourable P Shawatu made an arbitration award.  The operative part ruled that,

“1. 	 The parties i.e. Zibawu and Beaz, are hereby ordered that clause 6 of the July

2010 to December 2011 Collective Bargaining Agreement meant that the year

on year inflation figure for every Collective Bargaining Cycle was to be used as the starting point in negotiating salary increases in each and every Collective Bargaining Cycle.

2.	The parties are further ordered that the appropriate percentage is 10% which should be used to adjust the salaries for the period 1 January 2012 to 31 December 2012.”

Appellant was aggrieved by the ruling.  It then appealed to this Court against the award.  Respondent opposed the appeal.  Appellant’s attorney summarised their case thus,

The arbitrator acted ultra vires his mandate by conducting a salary review instead of setting a Cost-Of-Living-Adjustment (COLA).

Alternatively the arbitrator awarded a salary increment which had no legal or factual basis.

Ultra vires argument

The terms of reference were captured in the arbitration award as follows,

“ Interpretation and application of the July 2010 up to December 2011 agreement for the purposes of negotiating COLA for the period January 2012 up to December 2012.

In the result, Arbitrator to determine the appropriate percentage figure for the Cost of Living Adjustments (COLA) for the Banking undertaking for the period

1January 2012 to 31 December 2012 taking into account the deadlocked positions between the negotiating parties i.e. BEAZ 4.9%, ZIBAWU 23.5%”

The parties Collective Bargaining Agreement (CBA) is encapsulated in a Statutory Instrument  i.e. the Collective Bargaining Agreement - National Employment Council Banking Industry S.I. 150/13.  Its section 6 provides that,

“Furthermore, the parties have agreed to basesalaryreviewson year-on-year inflation figures prevailing at the relevant time and the sources of the inflation figures shall be the Ministry of Finance Economic Development, Central Statistical Office and IMF”

It is common cause that the relevant inflation figure was 4.9%.

Appellant argued that once that figure was ascertained, the Arbitrator’s task was to simply apply it in setting wage increments.  Respondent argued that the figure was a starting point for negotiations for wage increments.  A proper reading of the CBA showed that the parties agreed to base salary reviews on inflation figures.  I consider that the word “base” was used advisedly.  It contemplated a foundation or starting point.  It was not the structure or end-point.  It was to be used for salaryreviews.  In other words the arbitrator in casu was not obliged to set increments tallying with the inflation figure.  He would naturally consider it as a base-line.  I therefore find that he did not stray beyond his mandate.  I agree with the arbitrator that though the parties bandied about the term COLA they were really taking about salary reviews as provided by their CBA.  The CBA set the terms of engagement between the parties.  It is significant to note that it does not use the term COLA but salary adjustment reviews.  Thus I consider that the arbitrator acted intra vires his mandate.

Factual or legal basis argument:

The arbitrator gave reasons for his award.  I will quote his award in extenso,

“In determining the appropriate percentage increase to be awarded the following principles should be examined that is (1) cost of living (2) the living wages (3) the prevailing wage (4) the reduction in the amount of take-home pay and the national interest (5) productivity and (6) ability to pay.

In light of the above, the Banking sector minimum wages for the least paid employees is almost at par with the Poverty Datum Line (PDL).  The Poverty Datum Line according to the Consumer Council of Zimbabwe oscillates around USD540 to USD570.  Furthermore, the Banking Sector is the one leading or setting the pace since July 2010 with the least paid employee earning USD575.90.

On the other hand employees should not suffer because other sectors are not performing well.  The employees should be remunerated in (sic) commensurate with the performance of the sector.  A fair and equitable remuneration befitting the productivity and the sector’s ability to pay taking into consideration the inflation figure should be awarded.”

Having taken note of the above factors, the arbitrator concluded

thus,

“Basing on the previous agreement, the starting point is 4.9%.  The sector is currently realising positive growth and profitability and the employees deserve an increase that commensurate with the positive growth and profitability.  A 10% increase is applicable under these circumstances.”

It is apparent from the foregoing that the arbitrator took into account

the relevant factors.  These include,

Current wages;

Inflation figures;

Poverty datum line; and

Sector growth & profitability.

That he did not match the increment to a specific factor in terms of

figures is neither here nor there.  Once he correctly found that he was not bound by the inflation figures, the arbitrator was obliged to determine the appropriate salary increment.The exercise largely entailed a value judgment.  It arrived at a figure between two extremes.  It produced a figure which cannot be said to be shocking or unreasonably high.  It does not stray to the realm of a “thumb-suck”. In the circumstances  I am satisfied that the arbitrator’s reasoning provided both the factual and legal basis for his award.

Wherefore it is ordered that,

The appeal is hereby dismissed; and

Each party shall bear its own costs.

G MUSARIRI

J U D G E