Edgars Stores v Violezanze

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGEMENT NO. LC/H/812/2016
HARARE, 02 DECEMBER, 2016
CASE NO. LC/H/812/2016
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IN THE LABOUR COURT OF ZIMBABWE    JUDGEMENT NO. LC/H/812/2016

HARARE, 02 DECEMBER, 2016                                   CASE NO. LC/H/348/16

AND 16 DECEMBER 2016

In the matter between:-

EDGARS  STORES                                                       APPELLANT

AND

VIOLEZANZE                                                             RESPONDENT

Before the Honourable B.T CHIVIZHE: Judge

For Appellant: Mr F. Mahere (Legal Practitioner)

For Respondent: Mr S.N. Muhambi (Trade Unionist)

CHIVIZHE, J:

This is an appeal against an award of the Arbitrator Honourable Viriri handed down on the 19th of May 2016. The appeal is brought in accordance with Section 98(10) of the Labour Act (Chapter 28:01).

The operative part of the award reads:

“On the basis of the foregoing findings the Respondent must reinstate the Appellant with full benefits and pay. If reinstatement is no longer tenable the Appellant shall be paid twelve months pay as damages in lieu of reinstatement.”

Background facts

The Respondent was engaged by the Appellant as a Customer Service Assistant. She was employed on the basis of a casual contract. The contract ran from the 4th of February to 30th of March 2013 a total of 8 weeks. Upon termination of the contract the Respondent referred a complaint of unfair labour practice (casualisation of labour) to the National Employment Council for the Commercial Sectors (NECCS). She was alleging that her status had been altered to that of a permanent employee because she had worked an extra two weeks beyond the permitted period for a casual contract. The Appellant could only terminate her through a retrenchment process.

At conciliation, the parties failed to settle and a deadlock was reached. The matter was consequently referred to compulsory arbitration. At conciliation the Respondent submitted that she had been engaged as a casual employee from the 19th of February 2013 to 30th of March 2013 a total period of 8 weeks, further on the basis of section 12(3) of the Labour Act (Chapter 28:01) her contract had altered from a casual contract to be a contract without limit of time. The contract had according to her been altered on the 8th of March, 2013. The Appellant whilst not disputing the position had offered to pay her three months salary as compensation for loss of employment which  she had refused on the basis that the offer was outrageous considering her status. She submitted that if the Appellant intended to terminate the contract could only do so through retrenchment process.

The Appellant position was that the Respondent had been engaged on a casual basis. Through inadvertence on the part of officials Respondent had worked for a total period of eight (8) consecutive weeks. Her status had however not converted to that of a permanent employee. There was also no casualisation of labour. The Appellant disputed that her status had altered by virtue of the provisions in section 12(3) of the Labour Act (Chapter 28:01). It was Appellant contention for such a conversion to take place there had to be something further done, seeing that the parties’ intention in entering the original contract was on a casual basis. There had to be communication by the Appellant to the Respondent that the relationship was going to be altered and Respondent was to be engaged on a permanent contract. The Appellant submitted that the tribunal could not afford to ignore the intention of the parties and elect to create a new contract for the parties. The tribunal needed instead to respect the doctrine of freedom of contract. The tribunal was referred to case authorities. i.e Scapelox Trading Pvt vs Mashagora, Family Trust and ors HH 91/14, Gazembe vs The Adult Literacy Education SC 173/14, Kurangari vs Commercial Bank of Zimbabwe HH 79/03. The Appellant also contested the sum of US 40721-00 claimed in damages in lieu of reinstatement by the Respondent on the basis that it was unjustified.

The Arbitrator after considering submissions by the parties came to the conclusion that by virtue of the provisions in section 12(3) of the Labour Act (Chapter 28:01) the Respondent had become a permanent employee by default. He thereafter drew up the award as reflected above. He directed Respondent’s reinstatement without loss of salary and benefits or in the alternative payment of damages in lieu of reinstatement amounting to twelve months salary which he said was in line with the Ambali vs Bata Shoe Company.

The appeal

The Appellant dissatisfied with the award noted the present appeal. The grounds of appeal are highlighted as follows:

The arbitrator grossly misdirected himself in his finding that simply because the Respondent had worked for a period of eight (8) consecutive weeks in a period of four months as a casual employee, she became a permanent employee “by default”.

The arbitrator grossly misdirected himself at law by awarding the Respondent damages in    lieu of reinstatement equivalent to twelve months ‘salary without conducting a proper quantification. Thereafter, quantifying damages in the absence of evidence amounted to an error at law.

There are two issues for determination before the Court. The first is whether the Arbitrator was correct in concluding that the casual contract between the parties was converted by default to a contract without limit of time by virtue of the provisions in Section 12(3) of the Labour Act (Chapter28:01). The second issue is whether the Arbitrator was correct in awarding Respondent damages equivalent to 12 months salary in the circumstances. I turn to address the two issues seriatim.

The facts in the matter which are largely common cause disclose that the Respondent was employed by the Appellant as a Customer Service Assistant. She was engaged on a casual basis. The Respondent was engaged for a period from February to March 2013. The Appellant does not dispute that the Respondent was only released on 30 March 2013.

Section 12(3) of the Labour Act(Chapter 28:01) provides that a person engaged as a casual worker shall be deemed to have become a permanent employee on the day the period of engagement exceeds a total of six weeks in any four consecutive months. The section reads as follows:

12 Duration, particulars and termination of employment contract

(1)...........................

(2)...........................

(3) Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his engagement with a particular employer exceeds a total of six weeks in any four consecutive months.

The facts in casu disclose that the Respondent was engaged as a casual worker for a period exceeding six weeks between February and March 2013. The Appellant has not contested that position. On the basis of the deeming provisions in section 12(3) of the Labour Act (Chapter 28:01) the Respondent as found by the Arbitrator automatically became a permanent employee.

The Appellant has sought to argue however that the Arbitrator erred as he ignored the basic principle of privity of contract. The Arbitrator also could not rewrite a contract entered into between the parties which were basically a casual employment.

The argument by Appellant is a porous argument. Section 12(3) of the Labour Act (Chapter 28:01) is very clear and unambiguous. An employee engaged on a casual basis assumes the status of a permanent employee the day the period of engagement exceeds six weeks in any four consecutive months. The Arbitrator could not have been persuaded by the argument based on the common law principles of privity contract against clear and express statutory provision in section 12(3) of the Labour Act (Chapter 28:01). The Arbitrator was therefore clearly correct when he found that the Respondent had become a permanent employee “by default.” He was further correct in finding that the Respondent having assumed status of a permanent employee the Appellant could only terminate her employment on the basis of provisions in the Act.

Having determined that the Arbitrator correctly found that the Respondent’s status had altered to that of a permanent employee and that she was unlawfully terminated I turn to address the second issue.

The second issue relates to the award of damages equivalent to 12 months salary. The Appellant has taken issue with the award on the basis that firstly no proper quantification proceedings were undertaken. Secondly that Arbitrator in arriving at the award failed to apply the principles applicable in quantification proceedings as enunciated in cases such as Ambali vs Bata Shoe Company 1999(1) ZLR 417(J), more particularly the Arbitrator came to award without having received any evidence from the Respondent. On this basis the Appellant submits that the arbitral award cannot be allowed to stand.

The Respondent’s position in counter is that Arbitrator did not misdirect himself at law. He arrived at award after properly weighing submissions made by both parties before him. The Respondent’s prayer is that the appeal be dismissed with costs as it is without merit.

Evaluation

The second ground of appeal is clearly meritorious. There can be no doubt that the Arbitrator fell into error in addressing the second stage of his enquiry. Having reached the conclusion that the Respondent was unlawfully terminated he then sought to conduct a second enquiry as to the quantum of damages in lieu of reinstatement. It is a trite position at law that quantification of damages is a trial cause. The Respondent was therefore required to place before the Arbitrator such evidence as to justify or prove each claim made before the arbitrator. The Arbitrator in conducting the enquiry would also apply general principles in quantification proceedings such as assessing  the Respondent’s age, skills, qualifications, position occupied, prevailing economic conditions, e.t.c. in order for him to arrive at a decision as to what period the Respondent would be expected to have obtained alternative employment. The Arbitrator would also have heard evidence on what steps if any, Respondent reasonably have had taken to mitigate her loss.

It is clear that the Arbitrator did misdirect himself in arriving at his award. Firstly he reached the award without having applied the proper quantification principles. The Respondent submits that submissions were made by both parties to the Arbitrator. However the record does not disclose any submissions made by the Respondent to justify each claim. Whilst the record shows Respondent’s initial claim had been +$ 40.000-00 the Arbitrator finally awarded her $12.000-00. There is no explanation as to which claims he had accepted or rejected and the reasons why. The period twelve months arrived at is also not explained by the Arbitrator as to how and why he arrived at 12 months. The figure was simply plucked out of a hat as no evidence had been placed before him to justify the claims made.

The Respondent also failed to place before the Arbitrator evidence of the effort taken to mitigate her loss. The Arbitrator whilst acknowledging that the Respondent failed to place such evidence of mitigation however proceeded to award her 12 months’ salary. On what basis she was awarded the 12 months salary is again not clear.

The fact that there was no evidence of mitigation on the part of the Respondent presented before the Arbitrator justifies this Court’s interference with the award. The award simply cannot be allowed to stand on that basis.

In the result it is ordered as follows;

The appeal partially succeeds.

The arbitral award handed down is hereby set aside; and

The matter be and is hereby remitted to the Arbitrator for a proper quantification of the quantum of damages payable in lieu of reinstatement.

Gill, Godlonton Gerrans, appellant’s legal practitioners