Ilford Services (Pvt) Ltd v Munyaradzi Chagumaira and Nicholas Maruza

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/641/2016
HARARE, 21 JUNE 2016 &
CASE NO LC/H/877/2014
21 OCTOBER 2016
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IN THE LABOUR COURT OF ZIMBABWE	         JUDGMENT NO LC/H/641/2016

HARARE, 21 JUNE 2016 &				        CASE NO LC/H/877/2014

21 OCTOBER 2016

ILFORD SERVICES (PVT) LTD					APPELLANT

Versus

MUNYARADZI CHAGUMAIRA					1ST RESPONDENT

and

NICHOLAS MARUZA						2ND RESPONDENT

Before the Honourable Manyangagze J

For the appellant	I Musimbe (Legal Practitioner)

For the respondent      G Nyikayaramba (Trade Unionist)

MANYANGADZE J:

This is an appeal from an arbitral award handed down on 16 September 2014, in terms of which the appellant was ordered to reinstate the respondents or pay them damages in lieu of reinstatement.

The facts forming the background to this matter are largely common cause.  The appellant is a company that carries on the business of quarry mining, and is based in Mutoko.  The respondents were employed by the appellant on fixed term contracts.  Chagumaira had worked for the appellant for three years, and Maruza for eight years.  Both had, within that period, their contracts repeatedly renewed.  It is not indicated how many times the contracts were renewed.  It is however an accepted fact that the contracts were fixed term contracts, which were renewed each time they expired.  Upon their expiry, sometime towards the end of 2013, the appellant terminated the respondents’ employment.  It decided not to renew the fixed term contracts.

The respondents lodged a complaint of unfair dismissal. Conciliation failed, and the matter ended up at arbitration.  The arbitrator ruled in the respondents’ favour, holding that they were unfairly dismissed.  This ruling prompted the present appeal.

This appeal is hinged on a resolution of one fundamental issue.  The issue is whether the termination of a fixed term contract of employment, upon its expiry, amounts to unfair dismissal.

The arbitrator held that in the respondent’s case, the non-renewal of the fixed term contracts amounted to unfair dismissal.  The reasoning of the arbitrator is expressed as follows:

“The employer hired other employees after the two had left – this is not disputed.

The employer gave the new recruits other duties and not as line-checkers.

There is suppression of Freedom of Association at the workplace as provided for in

the Constitution of Zimbabwe, Labour Act as well as ILO Convention 87.

Employees have the right to belong to unions, workers committees and to take part

in the lawful activities of such organisations. Section 4 of the Labour Act provides

for employees entitlement to membership of trade unions and workers committees.

Instead hiring new employees i.e. those engaged as DTH Operator and drillers, the

employer should have given these duties to these two claimants since they were

already employed by him and were most likely able to perform those duties. In my

view employees had a legitimate expectation of being re-engaged as provided for in

section 12B (3)(i((ii)”. (emphasis added)

The arbitrator held that the respondents had a legitimate expectation to be re-engaged by the appellant.  From his remarks, it appears the arbitrator was influenced mainly by the fact that the respondents had been in the employment of the appellant for a long time, in the course of which their fixed term contracts were being renewed.

The arbitrator also seemed to have been persuaded by the respondents’ assertion that they were victimised because of their trade union activities.  The respondents asserted that the non-renewal of their contracts was a suppression of their trade union activities.  This assertion was unsubstantiated.  It appears on the record as a bald averment.  The appeal therefore, turns on the question of whether the repeated renewal of the respondents’ fixed term contracts created legitimate expectation of their being engaged on a contract without limit of time.

The appellant referred the court to the case of Kundai Magodora & Others v Care International Zimbabwe SC 24-14, where the question of renewal of fixed term contracts and legitimate expectation was considered.  In that case, the remarks of PATEL JA are instructive.  The learned judge of appeal stated, at pages 6 – 7 of the cyclostyled judgement:

“My reading of s 12B (3)(b) of the Act does not give me any ground for departing from that decision. The plain meaning of that provision is that the employee on a contract of fixed duration must have had a legitimate expectation of being re-engaged upon its termination and that he was supplanted by another person who was engaged in his stead. These requirements are patently conjunctive and the mere existence of an expectation without the concomitant engagement of another employee does not suffice. I do not think that the courts are at large, in reliance upon principles derived from international custom or instruments, to strike down the clear and unambiguous language of an Act of Parliament. In any event, international conventions or treaties do not form part of our law unless they are specifically incorporated therein, while international customary law is not internally cognisable where it is inconsistent with an Act of Parliament. See s 111B of the former Constitution and ss 326 and 327 of the current Constitution.

Apart from the clear wording of s 12 B(3)(b), we cannot avoid the explicit provisions of the contracts in casu. The opening paragraph of each of the contracts stipulates that “This contract shall in no way whatsoever lead to a legitimate expectation of further employment beyond the contract’s date of termination.” This in itself, as was recognised by ZIYAMBI JA in Shamuyarira’s case, indisputably undermines and renders untenable the appellants ‘contention of having been unfairly dismissed. They are surely bound by the express terms that they have agreed to and cannot then complain, notwithstanding those terms, that they had a legitimate expectation of being re-engaged.

In principle, it is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted, even if they are shown to be onerous or oppressive. This is so as a matter of public policy. See Wells v South African Alumenite Company 1927 AD 69 at 73; Christie: The Law of Contract in South Africa (3rd ed.) at pp 14-15. Nor is it generally permissible to read into the contract some implied or tacit term that is in direct conflict with its express terms. See South African Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A) at 615D; First National Bank of SA Ltd v Transvaal Rugby Union & Anor 1997 (3) SA 851 (W) at 864 E – H.”

This case clearly stated the Supreme Court’s position on fixed term contracts.  Their repeated renewal does not create legitimate expectation of permanent employment.

Another important feature of this case, pointed out by the appellant, was that the respondents’ contracts contained a clause that places no obligation on the appellant to renew the contracts. The copies of the contracts filed of record are not those of the respondents.  However, it is not in dispute that all the fixed term contracts, including those of the respondents, contained this clause.  The clause reads:

“The employer however has no legal obligation to renew this contract and any such subsequent renewals shall not give rise to any legitimate expectation of the continued employment by the employer”.

Thus, the contract entered into by the respondents’ explicitly ousted legitimate expectation of renewal.  As held in the Magodora case, supra, the court cannot make a contract for the parties.  It cannot amend or vary the express provisions of a contract concluded by the parties. Holding that the appellant is bound to renew its fixed term contracts with the respondents, would be tantamount to such impermissible amendment or variation.

This position was reinforced in the case of Simbi Steel Makers (Pvt) Ltd v M Shamu & Ors SC 71/15.  PATEL JA stated, at page 10 of the cyclostyled judgement:

“In my view, s 12 (3) does not, whether explicitly or by necessary implication, prevent an employer from engaging employees for successive fixed terms, provided that they continue to enjoy the full rights and benefits that are accorded under Part IV of the Act and to which they are entitled as fixed term employees. By the same token, employers cannot be burdened or penalised by having fixed term employees foisted upon them on a permanent basis. In this regard, the Labour Court cannot invoke its equitable jurisdiction, on the basis of advancing social justice in the workplace, to insinuate into s 12 (3) an interpretation that is simply not supported by its unambiguous language. To do so involves the double sin of doing violence to what Parliament itself has enacted as well as rewriting the terms of a contract that has been freely and voluntarily entered into, by altering something so fundamental as its agreed and intended duration.”

Mr Nyikayaramba, the Trade Union official who represented the respondents, further argued along the lines of the unequal bargaining power between employers and employees.  He submitted:

“Even if they submit that their contracts were not to be renewed, employees just sign because of the economic situation.  The company is exploiting the employees, the job is there but they terminate the contracts”.

PATEL JA, in Simbi Steel Makers (Pvt) Ltd, supra adverted to this issue in the following terms:

“In arriving at this conclusion, I am not oblivious to the basic socio-economic reality that pervades the labour market, not only in this country but also almost everywhere else. The markedly unequal bargaining power of prospective employers on the one hand and aspirant employees on the other more often than not entails the latter having to succumb to the dictates of the latter insofar as concerns the material terms and conditions, including the duration, of their contracts of employment. But this is an evil that the legislature is best placed and empowered to combat through the enactment of legislation clearly designed to achieve that purpose.”

In casu, the arbitrator’s remarks reflect some indignation over what he saw as an exploitative situation.  As much as he sympathised with the respondents’ vulnerability, he could not tamper with the terms and conditions of their fixed term contracts.  He imposed a burden on the appellant, of renewing a contract it was not obliged to renew.  He therefore misdirected himself, and this warrants interference with his award.  The appeal has merit and must succeed in the circumstances.

It is accordingly ordered that:

The appeal be and is hereby allowed.

The arbitral award granted in favour of the respondents on 16 September 2014 be and is hereby set aside.

Each party bears its own cost.

I E G Musimbe & Partners, appellant’s legal practitioners