George Mundembe v Pungwe Breweries & Marketing (Pvt) Ltd

### Preamble
THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO.LC/MC/12/13
HELD AT HARARE ON 7TH May, 2013
CASE NO.LC/MC/14/09
In the matter between:
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THE LABOUR COURT OF ZIMBABWE	         JUDGMENT NO.LC/MC/12/13

HELD AT HARARE ON 7TH May, 2013	      CASE NO.LC/MC/14/09

In the matter between:

GEORGE MUNDEMBE							Applicant

And

PUNGWE BREWERIES & MARKETING (PVT) LTD.	Respondent

Before The Honourables G. Mhuri, Senior President

E. Muchawa, President

For Applicant : Mr P.G. Takaidza (Legal Practitioner)

For Respondent: Mr T. Mukwindidza (Legal Practitioner)

MUCHAWA P,:

This is an application for quantification of damages pursuant to an earlier order of this Honourable Court which ordered Applicant’s reinstatement to his position of General Manager with Respondent. In the event that reinstatement was no longer possible, Respondent was ordered to pay damages in lieu of reinstatement. Parties could not agree on the quantum and have referred back the issue to this  Court. This is now the matter before us.

The brief facts of the matter are that Applicant was employed by the Respondent as its General Manager from February 2007 to the 9th February 2009 when he was suspended pending dismissal. The dispute relating to the unlawfulness of Applicant’s dismissal was finalised on the 6th March 2012 when the Supreme Court dismissed Respondent’s appeal against the decision of this Court.

In his claim for damages, Applicant applies for the following;

Arrear salary for February and March 2009 at the rate of $2 517.00 per month. Applicant was already paid at the rate of $800.00 per month and therefore claims the balance of $1 716.00 per month.

Cash in lieu of use of own vehicle at the rate of 27c/km x 500km per month being $135.00 per month for 36 months.

Rentals in lieu of company accommodation at US150.00 per month for February and March 2009                                                              =	                     $300

April to December 2009 @ $190		          =	       $1 710

January 2010 to July 2010 @$200		          =	       $1 400

August 2010 to date @$350			          =	     $11 900

Fuel at 120litres per week @ $1.44 per litre = $691.00 per month.

School fees for 2 minor children for July 2009 to March 2012 totalling $1 958 (being $143.00 per month)

Claim for motor vehicle at $12 000.00

Cash in lieu of leave balance of $21.00.  Cash in lieu of leave is calculated by Applicant as a total of 70 days accumulated at the rate of 4 days per month at a salary of $2 517 per month making it $109.39 per working day.

Damages at the rate of $2 517 per month over 36 months

Cell phone allowance

Entertainment allowance

Medical aid expenses

Damages in lieu of reinstatement

The principles applicable in damages for unlawful dismissal are settled law and were laid out in Ambali v Bata Shoe Company LTD 1999(1) ZLR 417 (s) at page 417D

“Where a person has been wrongfully dismissed (rather than wrongfully suspended) from his employment, and seeks damages rather than reinstatement, he is entitled to be awarded the amount of wages or salary he would have earned had his contract not been prematurely terminated. He may also be compensated for the loss of any benefits to which he was deprived as a result of the wrongful termination”

The starting point is therefore to ascertain what Applicant’s salary would have been had he not been prematurely terminated and the benefits he was entitled to. These damages are contractual hence the need to establish the terms of Applicant’s contract.

I now proceed to consider each of the claimed items as I am alive to the settled law that the quantification of damages is an issue of evidence. In First Mutual Life Limited v Jackson Muzivi SC 9/07 it was held that the Applicant in casu ought to have led evidence to establish his entitlement to each of the amounts claimed.

Applicant’s salary

At the hearing, both Applicant and Respondent did not produce any contract of employment outlining salary and benefits that were due to Applicant. The evidence before the Court is

a summarised machine printed payroll admitted as Exhibit 1 which shows Applicant salary for January/February 2009 as $1 498

an illegible payslip for January 2009 marked Annexure B

an affidavit by one Elias Chidembo, former Human Resources Officer of the Respondent (now dismissed too) who alleges that Applicant’s salary at the time of his dismissal was $2 511 per month. He claims that the difference between the $1 498 and this figure arises out of the NEC February 2009 increment of 68%.

Board Minutes of the 5th May 2009 which sets Applicant’s dollarized salary at $800.00 per month including that of the incoming General Manager amongst other management salaries

an internal memo of the 29th April 2009 from the Human Resources Officer/Manager to a Board Member which sets Applicant’s salary at $1 498 for January 2009.

All the above documents establish the following relevant facts:

That Applicant’s salary was set by the Board. After dollarization, in February 2009, the Respondent’s Board met on the 5th of May 2009 and set salaries for all senior staff and these were effective from 1st March 2009.

The General Manager’s salary was set at $800 per month

Management had however proceeded to publish salaries without Board approval and these were processed in the January and February payroll. These unapproved salaries set Applicant’s salary at $1 498.00 This position was subsequently reviewed by the Board at its 5th May 2009 meeting and became the subject of disciplinary proceedings against the Human Resources Manager.

Applicant seeks to rely on a Board resolution of the 29th April 2005 which stated;

“The Board further resolved that management and senior staff would have their salaries adjusted by a similar percentage awarded to NEC employees for the time being”

in claiming a 68% increment on his purported salary of $1 498 making his salary $2 511. It is clear that the Board in its meeting of the 5th of May 2009 did not consider this resolution to be applicable thus limiting “the time being” to that before dollarization of salaries.

In the circumstances, I find that management had no authority to determine their own salaries and the Applicant’s salary, that is, the salary he would have earned had his contract not been prematurely terminated was $800.00

Applicant was therefore paid the full amount for February and March 2009. His claim for a balance of $1 716 therefore falls away.

Cash in lieu of use of own vehicle

The Board Minutes of the 5th of May 2009 confirm that Applicant was paid cash in lieu of use of personal vehicle which was pegged at 1000 km per month. At this meeting the Board reduced this benefit to 200 km per month. In his supporting affidavit, Applicant concedes that this benefit was received by him but was for the mutual benefit of both Respondent and himself. The divergence is on the allocation of such between the parties. Whilst Respondent has offered 200 km as the benefit accruing to Applicant, Applicant himself claims 500 km as accruing to himself. Applicant has calculated this benefit at the rate of 27c/km whilst Respondent has calculated this at 24c/km

I find that Applicant has not proved his allocation at the rate of 50/50. It is an acceptable principle of our law that he who alleges must prove. In the absence of such proof I am inclined to find that the allowance for personal use of the vehicle is for 200 km per month at 27c/km. Respondent offered payment upto May 2009 when company vehicle was available. In this respect Applicant’s claim succeeds in the amount of $54.00 per month for four months.

Rentals in lieu of company accommodation

At the hearing the parties agreed that the rentals payable by Applicant as at March 2009 were $150 per month. It was Respondent’s evidence that the company subsequently resolved to give the General Manager company accommodation. Respondent proposes to pay for accommodation at the rate of $150.00 from 1st February to 31st May 2009. They argue that if Applicant had been reinstated he would then have been in a company house.

The essence of damages is to compensate a party for the loss of any benefits to which an Applicant was entitled to and of which he was deprived as a result of the wrongful termination (per Ambali V. Bata Shoe Company Ltd (supra).

Respondent elected not to reinstate Applicant. If he had been reinstated he would have been in company accommodation. I find that Respondent should pay for Applicant’s accommodation at the rate of $150 for the period of 4 months only.

Fuel at 120litres per week

The suspension letter confirms Applicant had been entitled to 120 litres per week. Respondent argues that the fuel allocation of 120 litres per week was for Respondent’s benefits and was not for Applicant’s personal gain and benefit. The Board Chairperson consequently reduced the accrual to Applicant for his personal gain to 20 litres per week during his suspension. The reasoning in First Mutual Life Limited v Jackson Muzivi (supra) regarding how a car benefit or facilitation of movement is for the benefit of the employer is instructive. “Once he was suspended the benefit of the use of a car would under normal circumstances fall away. Applicant would have been entitled to use of a car in the performance of his duties”.

Under such circumstances I find that Applicant’s claim for 120 litres of fuel per week is unjustified. His claim succeeds to the level offered by Respondent being 20 litres per week.

School fees for two minor children for July 2009 to March 2012 totalling $1 958 (being $143.00 per month)

Applicant has put in receipts for school fees to support his claim for school fees. Respondent has conceded that they were part of Applicant’s benefits and have been proved. However he is prepared to pay for 18 months only upto September 2010.

It is my finding therefore that the benefit for school fees is payable for a period to be set hereunder by this judgment.

Claim for a motor vehicle valued at $12 000

Applicant has not put before the Court any evidence to prove his contractual entitlement to a motor vehicle. Even the affidavit by Elias Chidembo and the Board Minutes do not include this. The suspension letter of the 9th February 2009 instructs him to hand over a Mazda Cronos vehicle in his possession that belongs to Pungwe Breweries. In his evidence Applicant makes reference to a company policy that if someone has a vehicle he will be given the vehicle after three years. No evidence to support this policy was provided and in any event Applicant had only worked for Respondent for two years only (from February 2007 to February 2009).

No evidence is provided as to how he arrives at the figure of $12 000. Applicant is not clear about his actual entitlement. I am not clear of the make and model of the car, or whether it is a new or used car. I am guided in this regard by the considerations in First Mutual Life Limited v Jackson Muzivi (supra) at page 7.

I find therefore that there is no legal basis for the claim of cash in place of a motor vehicle.

Cash in lieu of leave

Applicant claims that he had accrued 70 leave days as at the date of his dismissal, these having been accrued at the rate of 4 days per month. Respondent on the other had claims that Applicant’s entitlement was 2.5 days per month. The evidence before the Court is the payroll analysis for January and February and payslips which show an accrual of 4 days. In addition a job card was produced by Respondent which shows accruals of leave days at 4 per month from 31st January 2008. Respondent argued that Applicant unilaterally altered his conditions of service and increased his days to 4 instead of 2.5 per month. Respondent conceded that they will pay for the 70 days claimed after a concession that the documentary evidence shows accruals at 4 days per month though this was a mistake.

Consequently Applicant’s claim for cash in lieu of leave for 70 days is allowed at the rate of $800 per month.

Cell phone allowance and entertainment allowance

Applicant concedes in his Heads of Arguments that these benefits were for Respondent’s benefit and related to fulfilling his employment duties.

The claim in respect of these is therefore dismissed.

Medical aid

The Respondent Board Minutes of the 5th of May 2009 note that, Applicant was entitled to medical aid cover before dismissal. A confirmation letter from CIMAS does show that Applicant was a member from 1st March 1989 to 31st July 2009. It was agreed at the hearing that Applicant had to prove medical expenses incurred after his dismissal in order to prove a direct entitlement to medical aid as claimed. No such evidence was put before the Court. I find that Applicant has no legal basis to claim this and it is accordingly dismissed.

Mitigation

In Gauntlet Security Services (Pvt) Ltd. V Leonard 1997 (1) ZLR 583 and subsequently in Ambali v Bata Shoe Company Ltd (supra) it was settled that an employee must mitigate his loss. He  must look for and accept any reasonable offer of alternative employment. He cannot just do nothing. If he fails to take employment when it would have been reasonable for him to do so, a deduction will be made in respect of the remuneration he would have earned from substituted employment.

In his own evidence Applicant did not show that he looked for alternative employment immediately upon learning that reinstatement was not an option in July 2009. He assumed, mistakenly that the reinstatement order meant he could sit and earn from Respondent. The e-mail addresses provided as proof of applications made were admitted to have been sent to Applicant’s associates even where no vacancy had been advertised. On their own, I do not find them as sufficient proof of having sought alternative employment.

In Nyaguse v Mkwasine SC 34/2000 McNally J.A. stated;

“The onus is on the employer to show that the employee has or should have earned an income from some other source”

I am satisfied that Respondent has discharged this onus. Respondent established that Applicant is a qualified Secondary School teacher. He is a holder of a Diploma in Marketing. He however did not apply for any teaching position and did not provide evidence of having extensively sought marketing posts within the insurance and funeral assurance fields. Instead of the eight listed positions he claims to have applied for, four were for Project Officer positions within Non Governmental Organisations. Applicant has not shown what relevant experience or qualifications he had for these posts.

Applicant has rejoined his former employers Zimnat with effect from October 2011.

I therefore find that Applicant did not do enough, quickly enough, to mitigate his loss.

Period for which damages are to be awarded

In Chiriseri v Plan International SC 56/2002 it was held that damages are calculated on the basis of the length of time (calculated from the date of dismissal, which it would reasonably take the dismissed employee to find alternative employment).

In casu the evidence before the Court on behalf of Applicant was that he would need 36 months to reasonably find alternative employment. Respondent has offered to pay damages over an 18 month period.

Due to Applicant’s qualifications (teaching and marketing), his experience as a teacher and manager in particular in the insurance industry which has been reviving products following dollarization including the growing funeral assurance products, coupled with Applicant’s maturity at age 51, I find that, if Applicant had seriously gone about looking for alternative employment, he should have been able to get alternative employment within 18 months.

In the circumstances I find that Applicant is entitled to damages to be calculated on the basis of an 18 month period.

Applicant is therefore entitled to the following;-

Cash in lieu of use of own vehicle at $54 x 4 months 								 $  216.00

Rentals in lieu of company accommodation

$150.00 x 4 months					 $  600.00

Fuel allowance at 80 litres per month

@ $1.44 per litre for 18 months		 $2 073.00

School fees in the total amount of $1 090

being upto September 2010 for the two

minor children						 $  850.00

Cash in lieu of leave at the rate of

$800 per month for 70 days 			 $1 866.60

Damages at the rate of $800 for 18

Months								$14 400.00

Total amount							$20 005.60

Less amounts already paid				$ 7 636.00

Balance remaining 					$12 369.60

………………………………………..

G. Mhuri

…………………………………………

E. Muchawa

Takaidza & Mubata  - Applicant’s Legal Practitioners

Bere Brothers – Respondent’s Legal Practitioners