Detergent, Edible Oils & Fats Industry Employers' Association v Detergent, Edible Oils & Fats Industry Trade Union

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/751/2014
HARARE, 09 OCTOBER 2014
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE	                 JUDGMENT NO. LC/H/751/2014

HARARE, 09 OCTOBER 2014		           	             CASE NO. LC/H/314/2014

AND 07 NOVEMBER 2014

In the matter between:-

DETERGENT, EDIBLE OILS & FATS INDUSTRY			Appellant

EMPLOYERS’ ASSOCIATION

And

DETERGENT, EDIBLE OILS & FATS INDUSTRY			Respondent

TRADE UNION

Before The Honourable F.C. Maxwell, Judge

For Appellant		Mr. R. Moyo (Legal Practitioner)

For Respondent		Mr. G. Mawoneka (DEOFWU)

MAXWELL, J:

Appellant and Respondent engaged in a collective bargaining process with a view to agree on wage, transport and housing allowance increments for January to December 2014.  Respondent advocated for an overall increment of 52.2% in wages, transport and housing allowances.  Appellant proposed an increment of 2.5% on wages only.  Housing and transport allowances were to remain unchanged on appellant’s proposal.  A deadlock was declared.  The matter was referred to conciliation but was not settled.  It was then referred to arbitration and the arbitrator awarded a 10% increment on the basic wages for the employees concerned on 17 March 2014.  Appellant was aggrieved and appealed to this Court on 11 April 2014.  The grounds of appeal are

The honourable Arbitrator misdirected herself in law in awarding an increment that is patently unsustainable and at variance with the facts that she accepted.  Her conclusion (award) is a gross misdirection in so far as there is a disconnect between the accepted facts and the award.  In the end her award is not based on the facts that were before her.

The honourable arbitrator erred in law in failing to understand and discharge her mandate.  She understood it as only to determine wages, housing and transport allowances for the Detergents, Edible Oils & Fats Industry for the period January to December 2014 when her mandate was to determine sustainable and realistic wages, housing and transport allowances for the said industry for the period January to December 2014.  That was the in inescapable qualification to her mandate.

In response Respondent averred that the arbitrator made a correct decision at law.  It further that the ground of appeal addresses questions of fact and there is no averment of gross misdirection on the part of the Arbitrator in the grounds of appeal. Respondent submitted that the ground of appeal was a general disgruntlement with the decision of the Arbitrator.  Respondent also submitted that the Arbitrator discharged her mandate in terms of the law and acted within it.

The arbitrator made the following pertinent findings of fact.

the  economy is not performing to the best of expectations.

the domestic production/manufacturing is going down.

there is an increase on the imports of products.

there is a liquidity crunch and Appellant is not able to access funding for their operations, for retooling.  They are experiencing capital challenges.

the minimum wage is below the poverty datum line.

Inflation was pegged at 0.32%.

Having made the above findings the arbitrator went on to state that salary increments should not totally ignore the fact that employees require a living wage.  She went on to compare the earnings of other employees in the Food Sector.  She concluded that the Detergents, Edible Oils and Fats Industry had the lowest minimum wage in 2013.   She concluded by awarding  a 10% increment on the basic wage.

Clearly the arbitrator did not disclose the basis upon which she arrived at 10% as appropriate.  The Court takes judicial notice of the fact that 2014 has seen an increase in company closures and alarming retrenchments.  Appellant brought to the attention of the court the Motion Roll for the High Court for the 8 October 2014 in support of the submission that every week seven to eight companies are closing.  As stated by HUNGWE J in Tel-One (Pvt) Ltd v Communication & Allied Services Workers Union of Zimbabwe 2007 (2) ZLR 262 an award that plunges the apple-cart over the cliff could not be said to be in the best interest of the general good of Zimbabwe.  Appellant has argued that the award is not sustainable and that has not been disputed.

Respondent argued that Appellant did not disclose financial incapacity.  In its view a fair wage was derived from comparison of minimum wage in the industry.  I align myself with the sentiments of MATANDA-MOYO J in Chamber of Mines v Associated Mine Workers Union of Zimbabwe LC/H/250/12 that it is not reasonable to remunerate employees at the expense of the sustainability of the companies which pay them.  In my view the arbitrator fell into error in comparing the minimum wage without considering affordability.  After comparing the minimum wage she went on to award a percentage that is not justified or explained.  Such an award cannot be supported.

In Zimbabwe Posts (Pvt) Ltd v Communication and Allied Services Workers Union of Zimbabwe HH-60-14 MUTEMA J upheld a position in which the applicant argued that it could not afford to pay any adjustment above what was being paid already.  The Respondent had been advocating for a minimum wage of $490,00 per month.  The honourable Judge was of the view that even if the awarded increments are not substantial, their effect would be to drive it into insolvency with the inevitable consequence of liquidation with massive loss of jobs for all its employees and mass suffering for their dependents.  He resultantly set aside the arbitral award.

It was submitted for the Appellants that at the time the award was rendered its members were struggling to strive and a good number were having to close.  Appellant offered an increment of 2.5% on the basic wage for the period January to December 2014.  I find that considerate in view of the fact that companies are closing due to viability challenges.  I am therefore inclined to interfere with the arbitral award.

Consequently I find merit in the appeal and it succeeds.

I therefore order as follows.

The appeal be and is hereby upheld.

The arbitral award be and is hereby set aside and substituted with the following:

“1. The employees in the Detergents, Edible Oils and Fats Industry be and are   hereby awarded a 2,5% increment to their basic wage for the period January to December 2014.

2. Salary differentials are to be adjusted accordingly for the rest of the grades.

3. The housing and transport allowances are to remain unchanged for this period.”

GILL, GODLONTON & GERRANS, Appellant’s legal practitioners