Elvis Machikiti (Designated Agent) v Lyons Zimbabwe & Chain Ruzvidzo

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/783/2016
HARARE, 30 SEPTMBER 2016
CASE NO.
JUDGMENT NO. LC/H/783/2012
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IN THE LABOUR COURT OF ZIMBABWE	                 JUDGMENT NO. LC/H/783/2016

HARARE, 30 SEPTMBER 2016			            CASE NO. LC/H/LRA/48/16

AND 9 DECEMBER 2016

In the matter between:-

ELVIS MACHIKITI (DESIGNATED AGENT)			Applicant

And

LYONS ZIMBABWE						1st Respondent

And

CHAIN RUZVIDZO						2nd Respondent

Before The Honourable F.C. Maxwell, Judge

Applicant			In person

For 1st Respondent	Mr T. Marume (Legal Practitioner)

2nd Respondent		In default

MAXWELL, J:

This is an application for the confirmation of a draft ruling by the applicant in the matter between the first and second respondents.

2nd Respondent was employed by 1st Respondent for a period in excess of 40 years.  He retired from employment due to age and received his pension.  He then requested for gratuity from 1st Respondent.  His request was not responded to and he took the matter to conciliation.  The 1st Respondent disputed the 2nd Respondent’s entitlement to gratuity.  1st Respondent argued that 2nd Respondent was entitled to a pension only and cannot claim gratuity over and above the pension that was paid to him.  Upon his retirement.  It further argued that once a pension scheme exists, an employer cannot be compelled to pay gratuity as that is contrary to public policy.

2nd Respondent based his claim on section 26 of SI 34 of 2012. The Section 26 (4) states;

“Where the pension is less than the gratuity, the employer shall pay the pension plus the difference between the pension and the gratuity.”

SI 34 of 2012 gives the formula for calculating the gratuity based on the length of service.  The third schedule thereto outlines the percentage of monthly wage on termination of employment that is to be used depending on the length of service. 1st Respondent contended that Section 26 of SI 34 of 2012 is contrary to public policy and violates section 65 (1) of the Constitution of Zimbabwe as well as the provisions of the Pension and Provident Act.

Applicant ruled that gratuity is a statutory right of employees which cannot be denied to them on the ground that they are being given pension benefits.  Applicant states in his ruling that the express provisions of the collective bargaining agreement (SI 34 of 2012) whose provisions form part of the contract between Claimants and Respondent indisputably undermined and rendered untenable Respondent’s Contention of negating to pay the difference between pension and gratuity.  Applicant ordered the 1st Respondent to pay 2nd Respondent $4 069,67 being the difference between the pension and the gratuity.

I am of the view that Applicant’s reasoning cannot be faulted.  In heads of argument, 1st Respondent’s counsel refers to the Pension and Other Benefits Act [Chapter 16:01] and states that it is prohibited to receive double benefits as in the present case.  The Court was referred to Section 10 of the said Act. The section prohibits “a contributor who is paid any pension or commutation thereof in terms of this Part” from receiving any pension in terms of the Pensions Regulations. “This Part” is Part II of the Pensions and other Benefits Act [Chapter 16:01]. It is entitled “Benefits for members of Public Service and Others”. Section 2 of the Act in question defines a contributor as a person who contributes to the Consolidated Revenue Fund. “Pension Regulations” are defined as the State Service (Pensions) (Public Service) Regulations 1976.  The provisions of the Pensions and Other Benefits are, in my view, not applicable to this case.

Counsel for 1st Respondent also argued that the provisions of S26 of SI 34 of 2012 are a nullity as they are contrary to the dictates of the law.  Further that the Collective Bargaining Agreement is not legally supported and also seeks to emphasize payment of monies which 2nd Respondent did not contribute to 1st Respondent or to any fund.  Counsel argued that the dictum in Macfoy v United Africa Co Ltd [1961] 3 ALLRL 1169 applies with full force and effect that a void act is a nullity and is incurably bad.  Applicant placed reliance on the case of Delta Beverages v Origen Corporation (Pvt) Ltd SC 86/06 in which it was stated that public policy requires that contracts entered into freely and voluntarily be held sacred. He also relied on the case of Kundai Magodora & Others v Care International Zimbabwe SC 24/14 in which it is stated that it is not open to courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they freely and voluntarily accepted, even if they are seen to be onerous or oppressive.  Applicant stated that what the parties agreed upon at the employment council is stated in SI 34 of 2012, a product of collective bargaining between the employers and employees of the food processing sector.

1st Respondent paid a pension which is less favourable than gratuity and Applicant was of the view that nothing militated against the award of paying the different between the pension and the gratuity to the 2nd Respondent.  I agree.  The provisions of Section 26 (4) of SI 34 of 2012 are clear and unambiguous. 1st Respondent has an obligation to comply with those provisions.

Counsel for 1st Respondent also argued that the provisions of Section 26 of SI 34 of 2012 are contrary to public policy.  I do not agree.  In Delta Operations (Pvt) Ltd v Origen Corperation (Pvt) Ltd (supra) it is stated that one of the most important tenets of public policy is the sanctity of contracts.  In that case it was held that it was contrary to public policy for the arbitrator to grant remedies which were not available in terms of the contract. In casu, the Applicant awarded simply what is stated in the collective bargaining agreement.  In my view it would be contrary to public policy to consider the economic realities of the nation at the expense of an agreement between parties. The sanctity of contract must be upheld.

It is for the above reasons that I am persuaded to confirm the ruling by Applicant. Consequently the following order is appropriate.

The ruling by the applicant be and is hereby confirmed.

1st Respondent be and is hereby ordered to pay $4 069,67 to 2nd Respondent within 30 days of this order, being the difference between pension and gratuity.

Matsikidze and Mucheche, 1st respondent’s legal practitioners