Kenias Horonga vs Ternall Holdings and Grace T. Parakokwa N.O

### Preamble
THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/100/24
HARARE 15 NOVEMBER,2023
CASE NO. LC/H/399/21
AND 11 MARCH, 2024
---------


THE LABOUR COURT OF ZIMBABWE HARARE 15 NOVEMBER,2023

AND 11 MARCH, 2024

In the matter between: -

KENIAS HORONGA

Versus

TERNALL HOLDINGS

GRACE T. PARAKOKWA  N.O

Before the Honourable L. Hove, Judge:

For applicant :	Mr. C. Mavhondo For 1st respondent:	 Mr. S. Banda

For 2nd respondent:	No appearance

JUDGMENT NO. LC/H/100/24 CASE NO. LC/H/399/21

Applicant

1ST Respondent 2ND Respondent

This is an application for the quantification of terminal benefits due to the applicant following the termination of his fixed term contraction before its expiry.

The parties had entered into a five-year fixed term contract on 26 September 2014. The contract was however terminated on 29 September 2016 on 3 months’ notice.

It was decided in an earlier judgement of this Court that his initial salary of USD 12 800 per month was reduced with his consent to USD 9 600. Further, to this salary, he was entitled to utilities allowances which amounted to USD 480, as at the time of termination. His basic salary was therefore USD 10 080 per month.

In an earlier judgment of this Court, that is Judgement number LC/H/211/19, the Court held that the applicant was entitled to terminal benefits in terms of clause 31 of the contract. The Court will quantify those terminal benefits but before doing so, this Court must first decide a preliminary issue raised before considering the issues raised for considerations in these quantification proceedings.

Preliminary point

Whether the present application is prematurely before the Court

The 1st respondent argued in its papers that it intended to appeal against an earlier decision of this Court that is Judgement number LC/H/211/19. This was in 2021. However, when the matter was argued in 2023, the 1st respondent did not motivate this preliminary point. There was no appeal pending in 2023.

The preliminary issue was thus overtaken by events as there was no pending appeal when the matter was argued in November, 2023.

Mitigation

In considering damages due for unlawful dismissal the Courts have held that dismissed employees had a duty to mitigate their damages. In Ambali v Bata Shoe Company Limited 1999 (1) ZLR 417 the Supreme Court had this to say;

“I think it is important that this Court should make it clear, once and for all that an employee who considers, whether rightly or wrongly; that he has been unjustly dismissed, is not entitled to sit around and do nothing. He must look for alternative employment. If he does not, his damages will be reduced. He will be compensated only for the period between his wrongful dismissal and the date when he could reasonably have been expected to find alternative employment. The figure maybe adjusted upwards or downwards. If he could in the meanwhile have taken temporary or intermittent work, his compensation will be reduced.”

This is a trite principle of law and the respondent argued that the applicant, in terms of this principle ought to have mitigated his damages. He did not and must be penalized for it.

I am not convinced that this principle applies in casu. The Court in the Ambali case (supra) was talking of damages that an employee is entitled to for wrongful dismissal. In this case, we are not quantifying damages. The task is simply to state the terminal benefits the applicant is entitled to as per the contract of employment between the parties. For example, one terminal benefit is cash in lieu of leave for leave days which were not utilized or cash in lieu of notice. These are often statutory or contractual entitlements and cannot be reduced because the employee has not mitigated. We are not assessing damages for unlawful dismissal but assessing what are, in terms of the contract between the parties, the terminal benefits that are payable to the employee.

So, it is my considered view that the principle as outlined in the Ambali case is not applicable in this case.

Without prejudice correspondence

Another issue that arose between the parties was whether or not without prejudice correspondence could be produced in Court. The parties had previously tried to settle this issue of terminal benefits among themselves without success. They had however exchanged without prejudice correspondence as they attempted to settle. The applicant sought to place before the Court the without prejudice correspondence.

I agree with the respondent’s representative that at law, the applicant is barred from producing such correspondence, in the case of Kazingizi & anor v Equity Properties (pvt) Ltd HH 797/15 the Court held;

“As a general rule, statements that are made expressly or impliedly on a ‘without prejudice’ basis in the course of bona fide negotiations for the settlement of a dispute will not be allowed into evidence, Naidoo v Marine & Trade Insurance Co Ltd 1978 (3) SA 666. The resolution of a dispute with a genuine view to settlement appears to be the main consideration. If the settlement is thereafter reached, the negations leading up to it should be available to the court since the whole basis of the non-disclosure would have fallen away”

The without prejudice correspondence made in an attempt to settle this dispute must therefore not be disclosed to the Court since no settlement was reached. The correspondence is therefore expunged from the record.

Whether or not payment should be made in Unites States dollars

Generally, the 1st respondent did not seek to challenge the figures as claimed by the applicant. Instead, the 1st respondent sought to challenge the payment of the terminal benefits in United States Dollars. In the case of Knowledge Mahachi v Rio-Zim (Private) Limited SC 31/23.

The Supreme Court ordered that damages be payable in United States dollars as opposed to Zimbabwean dollars where the Labour Court had awarded damages in Zimbabwean dollars in similar circumstances. The Supreme Court ordered that the former employee be paid in United States dollars. As indicated earlier, most of the figures claimed are not disputed, the major point of difference being that the amounts should be payable in Zimbabwean Dollars and not United States dollars as per the authority in the Mahachi case (supra).

The amounts are only due and payable, not at the date of termination, but upon quantification. The terminal benefits will thus be paid in United States dollars.

Having decided the above issues, I now turn to what the applicant is entitled to as terminal benefits in terms of the contract of employment. The parties agreed in terms of Clause 31 that the applicant will be entitled to :-

A laptop or computer and printer at zero cost.

Allocated motor vehicle as per clause 31

6 months’ salary as gratuity that is, USD 60 480

Cash in lieu of leave

Medical aid for 12 months

School fees assistance for 12 months

Club fees for 12 months

Salary and benefits for the remaining period of the contract or two months’ salary for every year of continuous service worked or whichever is higher.

Restraint of trade

The parties also agreed in terms of Clause 30 that the company shall pay one-year basic salary to the applicant and the applicant would not be involved in any business within Zimbabwe that is in direct competition with the 1st respondent.

The applicant is thus entitled to the benefits outlined in terms of the contract of employment as listed above.

Arrear salaries

These are to be paid in the undisputed figure of USD $ 30 240. This being payable in United States Dollars.

Notice pays

Again, the figure of $30 240 has not been disputed. It is payable in United States dollars. Restraint of Trade

The figure is again not disputed and its USD 120 960. Gratuity

The respondent shall pay in United States Dollars the undisputed figure of USD $ 60 480. Cash in lieu of leave

Again, the figure of USD $ 13 287 is not disputed; it shall be payable in United States Dollars.

Medical aid for 32 months

The applicant had claimed for medical aid cover at the rate of USD $ 345 per month.

The respondent has indicated that it would rather pay directly to the service provider, Fidelity Life Medical Aid Society. It has however not disputed the figure of USD $ 345 per month. The 1st respondent shall therefore pay the applicant the figure of USD 11 040. In relation to the medical aid cover or alternatively pay Fidelity Life Medical Aid Society cover for 32 months in terms of the contract.

Since these are not damages suffered but what the parties agreed would be payable in terms of the contract the whole amount or benefit is payable in terms of the contract of employment which prescribes that upon termination in terms of Clause 31, the applicant shall be paid his salary and benefits for the unexpired portion of the contract.

Club fees – professional and Social

In terms of clause 32 of the contract between the parties, the applicant shall be paid for unexpired portion of the contract his salaries and benefits. These are not damages suffered but a contractual obligation. The sums claimed for these benefits are USD 39 040. These are made up as follows, for social club membership the rate at Chapman Golf Club is USD $720 per annum. For social membership the subscription fee is USD $ 500 per annum. For both social and professional clubs the subscription fee per annum is a total of USD $1 220. This amount paid over 32 months being the unexpired portion of the fixed term contract gives USD $ 39 040. Again, the 1st respondent has not disputed the USD $ 720 and the USD $ 500 but has indicated that it is willing to pay the amounts to the service provider but it is only wishing to reimburse what has been paid already. This is however not in terms of the contract of employment between the parties where parties agreed that the 1st respondent would pay both salaries and benefits for the unexpired portion of the contract. USD $ 39 040 is therefore allowed as being due and payable.

School fees

The respondent is obliged to pay this contractual benefit. It is not a damage but arises out of an agreement between the parties that the applicant shall be assisted with school fees for the unexpired period of the contract in the sum of USD $ 38 933. See in this regard the case of E. Underwood & Son Ltd v Barker (1899) ICH 300 (A) at 305 the Court held that;

‘To allow a person of mature age, and not imposed upon, to enter into a contract to obtain the benefit of it and then to repudiate it and the obligations which he has undertaken is prima facie at all events contrary to the interests of any and every country. Of course, I am not speaking of contracts induced by the fraud, duress, and undue influence or impeachable or any other recognized ground of invalidity’.”

When the company freely accepted to bind itself to the contract of employment, it cannot repudiate it without breaching the principles of the contract enunciated in the above quote. The terms of the contract as agreed between the parties must be enforced.

Fuel and Cell phone allowances

These claims are payable to the applicant as benefits which the parties agreed are payable in the event that the contract is terminated prematurely. 200 Litres of fuel are thus payable for the 32 remaining months giving a total of 6400 litres of fuel.

There is nothing in the contract that states that these benefits are only payable when the applicant is discharging his duties. The respondent’s prevented him from discharging those duties and further agree to pay salaries and benefits for the unexpired period of the contract. This also applies to a cell

phone claim of USD $ 250 per month for 32 months. The respondent shall therefore pay a total of USD $ 8000.

Holiday Allowances

In terms of clause 31 of the contract the applicant is entitled to the benefits for the remaining period of the contract. The benefits included air ticket travel. The applicant has shown that the tickets cost USD

$ 45 880. The amounts are therefore payable to the respondent or to the providers of the air tickets. Security allowance

The applicant was entitled to a security benefit in terms of the contract of employment. This benefit is payable in terms of benefits as per clause 31 of the contract of employment for a period of 32 months at the rate of USD $ 822 per month, the total amount payable is USD $ 44 735.

Loan deduction

The respondent raises no issue in respect of the loan amount in the sum of USD $ 116 340.04.

It has not sought to argue that what is owed in respect of the loan is $ 116 340.04 Zimbabwean dollars. The respondent is blowing both hot and cold in stating that the loan shall be deducted in United States dollars while insisting that the salaries and benefits be paid in Zimbabwean dollars.

In the result, the applicant’s claims are with merit and are upheld. See in this regard the case of

Hlatshwayo v Kaduya SC 34/06. Order:

The first respondent shall pay the applicant US $ 591 373 or the equivalent at the bank rate applicable at the date of payment.

The 1st respondent shall pay amount of US $ 224 848 to the applicant or the equivalent at the bank rate applicable at the date of payment or pay the service providers for;

Air tickets allowances for the years 2016, 2017, 2018 and 2019 USD $ 45 880

Fuel allowance 6400 litres, USD $ 10 884

Cell phone allowance USD $ 8 000

Security allowance USD $ 44 734

Education assistance allowance USD $ 38 933

Club subscription allowance-social and professional USD $ 39 040

the 1st respondent shall pay the applicant interest on all amounts due to him at the prescribed rate calculated from the date the contract was terminated to the date of payment in full.

the 1st respondent shall deduct from all amounts due to the applicant the amount of USD $ 116

340.04 or its equivalent at the bank rate applicable at the date of payment in respect of the loan.

the 1st respondent shall pay the applicant’s costs on the ordinary scale.