Doves Holdings (Pvt) Ltd v Zimbabwe Funeral Services & Assurance Workers Union

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/397/2014
HARARE, 21 MAY 2014
CASE NO. LC/H/397/2014
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/397/2014

HARARE, 21 MAY 2014	    		  	            CASE NO. LC/H/959/13

AND 04 JULY 2014

In the matter between:-

DOVES HOLDINGS (PVT) LTD					Appellant

And

ZIMBABWE FUNERAL SERVICES & 				Respondent

ASSURANCE WORKERS UNION

Before Honourable E Muchawa, Judge

For Appellant		-	I. Ndudzo (Legal Practitioner)

For Respondent		-	S. Chirinda (Trade Unionist)

MUCHAWA, J:

The background facts are that there is no specific National Employment Council for the Funeral Sector.  To date appellant and its employees have been regulated by the National Employment Council for the Commercial Sectors of Zimbabwe SI 45/93.  Respondent was registered as a trade union in 2005 in respect to the interests in the funeral services and assurance undertakings.  Attempts by respondent to negotiate on the formation of an N.E.C. for the Funeral Sector and thereafter negotiate conditions of employment, were unsuccessful due to non cooperation from the Zimbabwe Association of Funeral Assurers (ZAFA).  Respondent brought a complaint before the Labour Office resulting in an arbitral award which confirmed that the ZAFA was committing an unfair labour practice in refusing to negotiate.  ZAFA was ordered to negotiate with respondent.

Faced with the non cooperation thereafter, respondent, who had come up with proposed salaries and a grading system, lodged another complaint with the Labour Officer.  The matter was subsequently referred to arbitration.  The arbitrators found that they had jurisdiction to entertain the matter, declined to approve or register the proposed CBA but ordered the parties to negotiate the terms and conditions of the CBA.  Pending such negotiations, the minimum wage inclusive of transport and accommodation allowances was pegged at USD530,00 effective from September 2013.  In addition a minimum increase of 5% between one grade and another was set.

That arbitral award is the subject of this appeal.  The grounds of appeal are;

The arbitrators erred at law by making a finding that they had jurisdiction to set terms and conditions of employment in the industry when appellant and its employees are members of the statutory National Employment Council Commercial SectorS Collective Bargaining Agreement.

The arbitrators grossly misdirected themselves at law by erroneously making a finding that Respondent had locus standii to institute proceedings for the setting of terms and conditions of employment outside the collective bargaining process set out in SI 45/93.

The arbitrators grossly erred at law by misinterpreting Section 65 of the Constitution of Zimbabwe resulting in them making an erroneous finding that Appellant infringed respondent’s constitutional light.

The award by the arbitrators is bad at law as it arbitrarily set a minimum wage binding upon the appellant without due consideration of all the relevant and material factors.

The award by the arbitrators is erroneous at law in its finding that the appellant committed an unfair labour practice.

The learned arbitrators erred at law by arbitrarily setting the minimum wage on the basis of the Collective Bargaining Agreement for the National Employment Council Insurance Industry  to which Appellant and its employees are not members.

Appellant prays for the setting aside of the arbitral award.

Respondent opposes this appeal.  I proceed hereunder to deal with each ground of appeal.

1.Did the arbitrators have jurisdiction?

Appellant’s argument is that the labour officer and the arbitrators in turn, had no jurisdiction to deal with a dispute of interest rather than a dispute of right.  Secondly, it is argued that the Labour Act does not provide for referral of such a “dispute” for arbitration.  Resultantly the arbitrators are said to have had no jurisdiction to deal with this matter.

Respondent’s position is that the matter was brought before the Labour Officer as an unfair labour practice in terms of section 8 (c) and (f) and it was then referred to the  arbitrators in terms of section 93 of the Labour Act after failing to reach a settlement.  In addition the point is made that both parties agreed to refer the matter to arbitration and jointly agreed on the terms of reference.

The reference to arbitration clearly lays out the issue referred as “alleged unfair labour practice – refusal to offer salary increments and grading systems”.  Listed as one of the matters for arbitration is the question of jurisdiction of the labour officer and consequently the arbitrators.

From the above it is clear that there is no merit in respondent’s argument that appellant did agree to the arbitration and should not raise the question of jurisdiction.  Jurisdiction was raised as an issue all the way through.

The issue of whether the referred issue is a dispute of interest or a dispute of right is important in deciding on jurisdiction.  This is because section 93 of the Labour Act which lays out the powers of labour officers distinguishes between disputes of right and disputes of interest in providing for compulsory arbitration.  In section 93 (5) (a) a dispute of interest shall be referred for compulsory arbitration if the parties are engaged in an essential service and in terms of section 93 (5) (c) may refer a dispute of right to compulsory arbitration.  This means that only where the parties are engaged in an essential service shall a dispute of interest be referred to compulsory arbitration.  Only where parties agree can a dispute be referred to compulsory arbitration without regard to whether it is a dispute of interest or right in terms of section 93 (5) (b).

In casu appellant who was questioning the jurisdiction of the labour officer and arbitrator cannot be said to have agreed to arbitration.

The case of Zimbabwe Graphical Workers’ Union v Federation of Master Printers of Zimbabwe and Anor 2007 (2) ZLR 103 (5) clearly articulates the difference between a dispute of interest and a dispute of right over and above the definitions in the Labour Act;

“Thus, a dispute of right would be a dispute concerning , for example the infringement of  an existing legal right embodied in a statute or contract of employment.  On the other hand, a dispute of interest would be a dispute concerning, for example, the creation of new legal rights for the workers, such as higher salaries and allowances.”

In the circumstances there is no doubt that the issue of salary increments and a new grading system, wich involved the creation of fresh legal rights in the form of higher salaries and allowances was a dispute of interest.

I find therefore that the arbitrators had no jurisdiction to deal with this matter in the manner they did.

The appeal succeeds on this ground alone.  In the event that I may be wrong I propose to address the other aspect on jurisdiction and the rest of the grounds of appeal.

The arbitral award states that the claim was brought before them in terms of section 29 and not section 75 of the Labour Act.  Section 29 (4) (a) provides that a registered trade union is entitled to be assisted by a labour officer or designated agent in its dealings with employers.  The question is whether such assistance includes a referral to arbitration.

Appellant argues that such assistance does not empower the labour officers to refer matters of collective bargaining for conciliation and arbitration and that if the legislature intended to make such a provision, then it would have clearly provided for the same.

I am not convinced by respondent’s argument that the matter was never referred in terms of section 29 of the Act when the award itself says so.

I have to find that since section 29 deals with the privileges that accrue to a registered trade union, such assistance does not include conciliation and arbitration, which are specifically set out under powers of labour officers.  If the legislature so intended, it would have specifically said so.

This aspect of the ground of appeal succeeds too.

The Other Grounds of Appeal

There is no legal basis on which I should proceed to the other grounds of appeal.  I however wish to point out that appellant still makes a strong case on the other grounds.

Ground 2.

It is my considered opinion that the arbitrators erred in proceeding to alter the terms and conditions of the SI 45/93 CBA which is in existence and is binding on the parties as it provides for occupations in the funeral industry such as morticians, funeral assistants and consultants (funeral parlours).

Ground 4 and 6

Respondents put on record sentiments that the salaries pegged by the arbitrators are “too exorbitant for the industry to sustain.”  Clearly this buttresses the fact that the minimum wage was set in error as it was not based on any evidence relevant to the funeral sector.

Grounds 3 and 5

Respondents are not left without a remedy.  It is true that section 65 of the Constitution of Zimbabwe provides for labour rights and in particular the right to engage in collective bargaining.  This is in line with the ILO Convention No. 98 of 1949 which deals with the right to organize and collective bargaining.  The question that exercises one’s mind is how such a right is translated into a practical reality where an employer refuses to engage in collective bargaining on the pretext that a CBA already exists that is binding on them.  In casu respondent is a trade union that is more specific to the funeral industry.  The Labour Act in sections 56 and 57 provides the machinery for this.  It is clear that the parties have failed to form a voluntary employment council in terms of section 56 of the Act.  In my opinion, this is where respondent should seek the assistance of a labour officer in terms of section 29 to facilitate the formation of a statutory employment Council.  In that way respondents will be able to enjoy the right to engage in collective bargaining without violating existing legal obligations arising out of SI 45/93.

Conclusion

This appeal succeeds primarily on the basis that the arbitrators had no jurisdiction to deal with this matter.

Consequently I order as follows

The appeal being with merit, succeeds with costs.

The arbitral award of L. Sigauke and J Likwesa (arbitrators) of 15 November 2013 be and is hereby set aside in its entirety.

MUTAMANGIRA & ASSOCIATES,	Appellant’s legal practitioners