CFI Retail Limited t/a Farm & City Centre v Oscar Mbira

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/05/2016
HARARE, 29 SEPTEMBER 2015
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/05/2016

HARARE, 29 SEPTEMBER 2015	  		   CASE NO. LC/H/1107/14

AND 08 JANUARY 2016

In the matter between:-

CFI RETAIL LIMITED				Appellant

t/a FARM & CITY CENTRE

And

OSCAR MBIRA					Respondent

Before Honourable R. Manyangadze, J

For Appellant 		-	Mrs C.W. Mapfidza (Legal Practitioner)

For Respondent		-	Mr J. Koto (Legal Practitioner)

MANYANGADZE, J:

This is an appeal against a quantification award granted on 4 December 2014, in terms of which the respondent was awarded an amount of US$39 200,00 as damages in lieu of reinstatement.

The quantification emanates from an earlier award granted on 4 December 2013.  The record shows that an appeal against that award was dismissed by this court on 6 June 2014.  This paved the way to the quantification proceedings which resulted in the award in contention.

The award granted damages constituted as follows:

“Cash-in-lieu of leave days			=	$2 100,00

Back pay – 35 months				=     $24 500,00

18 months salary as damages		=     $12 600,00

for loss of employment

Total						=     $39 200,00”

My reading of the grounds of appeal discloses three basic issues for determination.

There are:

The arbitrator did not rule on a point in limine raised by the appellant.

The arbitrator erred by ruling that the appellant did not comply with the order to reinstate the respondent.

The arbitrator awarded damages based on figures not supported by evidence.

It is difficult to appreciate what the first ground of appeal seeks to achieve.  Is the appellant saying the arbitral award should be nullified, on the basis of failure to rule on the said point in limine?  Is appellant saying its appeal should be allowed, on the basis of this ground alone?. It is not clear, ex facie the ground of appeal, what its intended effect is.  It does not even state what it is all about.  It requires the court to go back to the submissions made before the arbitrator, to understand what the issue was all about.

Submissions made before the arbitrator, on quantification proceedings show that the appellant raised two points in limine.  It is the first point in limine that is the subject of the first ground of appeal.

In the point in limine, appellant refers to a letter addressed to the arbitrator, dated 6 March 2014, wherein it sought recusal of the arbitrator from the quantification proceedings.  The basis for this recusal is a letter dated 19 December 2013, again addressed to the arbitrator, wherein appellant refers to some “glaring  legal issues arising out of the Arbitral Award handed down by yourself.”

In his response to the appeal, the respondent indicated that the arbitrator dismissed the point in limine in an ex tempore ruling and proceeded to deal with the merits of the quantification.

The failure by the arbitrator to reduce to writing his ex tempore dismissal of the preliminary point should not be the basis for nullifying the quantification proceedings.

What I find mindboggling in this matter is that the preliminary point was persistent with after the initial arbitral award was upheld by this Court in its judgment of 6 June 2014.

The preliminary point related to issues emanating from that judgment.  It seems to me this is a matter that has been overtaken by events.  This ground of appeal is not serving any meaningful purpose and cannot be upheld.

In the second ground of appeal, the appellant contends that the respondent is not entitled to damages for loss of employment.  Its reason for so contending is  that it did not decline to reinstate the respondent.  The respondent did not present himself for work.  He cannot, in the circumstances, opt for damages.  The appellant articulated its position in paragraphs 11 (iii) – (iv) of its heads of argument, as follows:

“iii.	It is trite that in order for reinstatement to occur the formally dismissed employee has to present himself.  Surely the Respondent sat at home and did not come to work and now says he was not reinstated.

iv.	The prerogative to refuse reinstatement rests on the Appellant and the Appellant did not decline reinstatement.

See: see the Arbitral Award dated 4 December 2013

See also: section 12 (4) of the Labour Act (supra) which is ample proof of what the Respondent ought to have done should he not desire to be in the employ of the Applicant. “

On the other hand, the respondent averred that there was no communication from the appellant, on what election it had made, following the arbitral award of 4 December 2013.  The award stipulated a 7 day time line within which it was to be implemented.  There was no communication on what steps/measures appellant had taken to implement the award.

The letter calling upon the respondent to resume work was written on 10 June 2014.  The letter, inter alia, reads as follows;

“Please be advised that we have instructions that your client must present himself for work with immediate effect.

In that regard may he kindly attend at our client’s Head Office (Human Resources Department) at No. 1 Wynne Street, Harare, wherein he will be assigned his duties at one of our client’s branches within the country.

Be advised that his contractual and statutory benefits will be calculated accordingly and paid out.  In addition a written warning will be handed down by the employer.”

Given this sequence of events, the respondent formed the distinct impression that the appellant eventually elected to reinstate him because it was cornered.  Reinstatement, belatedly communicated, was not its preferred course of action.

The respondent explained that he went for quantification in March 2014, upon realizing that the 7 day deadline for implementation of the order to reinstate had since passed.  It had passed with no indication from the appellant that it wanted to reinstate him.  In the circumstances, the respondent felt that the decision to reinstate was not bona fide. In this regard, he averred, in paragraph 16 of his heads of argument;

“16.	In any event, while it is a general rule that the employer makes an election to reinstate or not, there are situations when the employee can at law choose damages instead of reinstatement especially where it is clear to him that the decision to reinstate is not made bona fide and there are no prospects of the continuation of an employer employee relationship.”

In this regard, reference was made to the case of BHP Minerals Zimbabwe (Pvt) Ltd v Takawira 1999 (2) ZLR 77 (S), where it was held that if the employee can show that the offer to reinstate him is not bona fide, he may be entitled to damages in lieu of reinstatement.

In the circumstances, it seems to me the respondent was justified in instituting proceedings for quantification of damages.  The second ground of appeal, wherein it is averred that the respondent is not entitled to damages, cannot be upheld.

In the third ground of appeal, the appellant contends that the quantum of damages awarded was not supported by evidence.  This, it seems to me, is the gravamen of this appeal.  It is the averment that the arbitrator, when he arrived at the figure of US$39 200,00, did not properly apply the principles relating to quantification of damages. He awarded amounts not supported by evidence.

Each of the amounts awarded by the arbitrator must be looked at, and it be determined whether it was supported by evidence.  The award has 3 items viz;

Cash-in-lieu of leave.

Back pay.

Damages for loss of employment.

On cash-in-lieu of leave, the appellant averred that the correct amount is $1 175,00, and not the $2 100,00 that was awarded.  There is no averment to the contrary  from the respondent.  The Notice of Response, and the respondent’s Heads of Argument do not address this item.  In the circumstances, the appellant’s submission on this item will be taken as undisputed.

The award for backpay was US $24 500,00, covering a period of 35 months.  This is by far the biggest component of the award.  It was based on a monthly salary of US$700,00.

The appellant averred that the respondent was receiving a salary of US$400,00 at the time of his dismissal.  A payslip reflecting that amount is filed of record.  The payslip is dated 28 January 2011.  The respondent was suspended on 8 February 2011, and dismissed from employment on 17 March 2011.  Thus, at the time of dismissal, the respondent was on a salary of US$400,00.

It is significant this figure is not disputed by the respondent.  The respondent admits that that was his last payslip.  However, the respondent argued that that salary was not going to remain stagnant.  It was expected to rise, as US denominated salaries were gradually rising. This is what was submitted on behalf of the respondent during oral argument:

“His argument is that although his last payslip had $400,00, that amount was not to remain stagnant given that we were still coming from introduction of US dollars, where salaries started at a lower range but rose with time.  It was a gradual rise.  There is no justification for saying the rise stopped in February. If my subordinate, who was always earning far less than myself ... is earning $457,00, automatically I am entitled to a higher salary.  That was his reasoning.  He then stipulated names of other managers, all those people had been earning $700,00 per month, who were in the same grade and started work at more or less the same time.”

The respondent submitted a Collective Bargaining Agreement before the arbitrator, which had the figure of $457,00 mentioned in the above cited submissions.  The Collective Bargaining Agreement did not apply to him, but to non-managerial employees.

Basically, the respondent’s argument was that the admitted salary of $400,00 was not what he was supposed to earn.  He was supposed to earn a net salary in the region of $700,00 per month.  This is what he would eventually have earned had he remained in employment.

This was, in my view, a seriously misplaced argument.  Undisputed proof of his earnings at the time of dismissal, was produced in the form of the January 2011 payslip.  The figure of $700,00 is what he expected to earn subsequent to February 2011.  It cannot constitute proof of earnings for purposes of calculating, and awarding backpay.

The appellant correctly made reference to the case of First Mutual Life v Muzivi 2007 (1) ZLR 325. In that case, the Supreme Court made it clear the onus was on the employee to prove his claim.

In the instant case, the figure of $700,00 was unsubstantiated.  The arbitral award does not explain why this figure was accepted.  All that is stated in the award is:

“I concur with the claimant that this makes the period of 35 months at a salary of USD$700,00 amounting to USD$24 500,00.”

There is no attempt by the arbitrator to explain why  he accepted this as a basis for his award of backpay.  He awarded what he felt was a proper salary for the respondent.  In this regard, it was submitted during oral argument, on behalf of the respondent:

”The salary of $700,00 was not supported by evidence.  It is absurd because it means the respondent assumed the right to earn $700,00 when dismissed, yet his payslip shows a salary of $400,00.”

Clearly, the arbitrator misdirected himself when he disregarded the undisputed salary of $400,00, and based his award on a salary of $700,00, not shown to be what the respondent earned when he was dismissed.

The award will therefore have to be adjusted, taking into account the proven salary of $400,00 per month.  Taking into account the date of suspension without pay, 8 February 2011, and the date of arbitral award, 4 December 2011, that amounts to 33 months 25 days backpay at the rate of $400,00 per month.  That yields a figure of $13 584,62.

The last item is damages for loss of employment.  The respondent was awarded an amount of $12 600,00, covering a period of 18 months.

On this item, all the arbitrator stated was;

“the claimant is no longer employed and considering his position and the harsh economic environment, damages to the tune of 18 months would suffice for loss of employment.”

The arbitrator did not explain why he settled for 18 months.  He simply referred to the harsh economic environment, without further clarification or analysis.

The record shows no evidence substantiating respondent’s damages.  The record also shows no evidence of any attempt to mitigate the damages sought.  The respondent concedes he did not look for alternative employment.  He explained that he was on remand at the Magistrates Court.  He reasoned that no employer would be prepared to accept someone who had to attend a criminal court from time to time, as he was on remand.

The respondent was on remand out of custody. He simply sat at home, with no attempt made at securing alternative employment.  It is the court’s considered view there should have been evidence of such an attempt.  If he was turned down by reason of his being on remand, that would then be a factor the court will duly consider, among other factors, on what quantum of damages to offer.  That sort of evidence is not before the court.  The respondent turned himself down before even making any job application.

The need for evidence to substantiate damages was emphasized in First Mutual Life Assurance vs Muzivizi 2007 (1) ZLR 325, and Heywood Investment v Zakeyo SC 32/13.

Further to that, the need for mitigating one’s damages was emphasized in Ambali vs Bata Shoe Company 1999 (1) ZLR 417.  As already indicated, it is an undisputed fact that the respondent made no effort at all to look for alternative employment.

The appellant, on the other hand, placed before the arbitrator some new paper cuttings of job advertisements in the sales and marketing sector.  It also attached respondent’s curriculum vitae, showing respondent’s track record in the sales and marketing field.  The appellant then averred that the respondent was in a position to secure suitable alternative employment within 3 months.

What was before the court was appellant’s information on prospects of securing alternative employment.  There was no information to the contrary from the respondent, save for the bald averment that the economic environment was harsh.  Under the circumstances, it is difficult to uphold the 18 months compensation awarded to the respondent.  The court is therefore inclined to proceed on the basis of the appellant’s submissions.

The only concern the court has is that the 3 month period, proposed by the appellant, appears too optimistic.  Even though job advertisements were flighted around the time of dismissal, it is unlikely a job applicant will be offered a job and commence working within the 3 months. Processes and logistics involved in submitting applications, waiting for responses, attending interviews, may go beyond such a period.  The period can, in the circumstances be reasonably stretched a little further to 6 months.  The damages payable would resultantly be $400 x 6, yielding an amount of $2 400,00

The appeal, in the circumstances, succeeds to the extent to which the amounts awarded in the arbitral award have been varied.

In the result, it is ordered that:

The appeal be and is hereby allowed.

The arbitral award granted on 4 December 2014 be and is hereby set aside and is substituted by the following:

“The appellant shall pay damages to the respondent constituted as follows:

Cash-in-lieu of leave			=	$  1 175,00

Back pay				=	$13 584,62

Loss of employment			=	$  2 400,00

Total					=	$17 159,62”

Each party shall bear its own costs.

Dzoro & Partners, appellant’s legal practitioners

Koto & Company, respondent’s legal practitioners