Leonard Chibanda & 13 Others v Cottco Company of Zimbabwe

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/349/2016
HARARE, 4 NOVEMBER 2015 &
27 MAY 2016
CASE NO LC/H/636/2010
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IN THE LABOUR COURT OF ZIMBABWE	       JUDGMENT NO LC/H/349/2016

HARARE, 4 NOVEMBER 2015 &			                 CASE NO LC/H/636/2010

27 MAY 2016

In the matter between

LEONARD CHIBANDA & 13 OTHERS					APPELLANTS

Versus

COTTCO COMPANY OF ZIMBABWE 					RESPONDENT

Before the Honourable R F Manyangadze J

For the Appellants	 T J Mafongoya & T Marume (Legal Practitioners)

For the Respondent     Advocate T Mpofu & C Maunga (Legal Practitioners)

MANYANGADZE J:

This is an appeal against an arbitral award issued on 19 November 2010, in terms of which the retrenchment of the appellants was held to have been lawfully done.

The brief facts of the matter are as follows:

The appellants were employed by the respondent, in various capacities. In 2010, the respondent embarked on a retrenchment exercise. It gave notice of its intention to retrench sixty of its employees, who included the appellants.

Negotiations for a retrenchment package were held through the medium of the Works Council. An agreement was concluded on 8 June 2010, in terms of which the appellants and other affected employees were retrenched.

The money constituting the agreed retrenchment packages was deposited into the appellants’ bank accounts.

The appellants lodged a complaint with a labour officer, alleging that the retrenchment was done unprocedurally. In particular, they alleged that the agreement on which it was based was concluded without their participation. They alleged that the workers’ representatives who negotiated the agreement at the Works Council did not have their mandate to do so.

When conciliation failed, the matter went for arbitration, leading to the arbitral award in contention.

The grounds of appeal are stated as follows:

“1.	The Honourable Arbitrator grossly erred in that the retrenchment was founding (sic) legally done when in fact at law:

There was no participation of the appellants in the whole process as required by the law.

There was no legally mandated representative of the appellants.

The appellants who were being retrenched were barred from accessing the workplace during retrenchment negotiations and were never given the right to appoint their own representatives as required by the law.

The appellants from the onset clearly pointed out that they wanted to represent themselves.

2.	The Honourable Arbitrator grossly erred and wrongly interpreted the law, when he ruled that the workers’ committee was a proper representative of those the appellants in this case, despite the fact that they had not mandated the committee to represent them and furthermore that the committee never got nor sought any input on the issues of retrenchment until its conclusion.

3.	The Honourable Arbitrator grossly erred in accepting that there was an agreement, when the appellants alleged to be part of the agreement never received the purported agreement and in its written submission and oral submissions, the respondent never produced such an agreement from day of request until the arbitration hearing.

4.	The Honourable Arbitrator grossly erred in finding out that the retrenchment board has already approved the retrenchment when the same board after realizing the clear fraud, then requested the labour office to deal with the issue as a dispute. The purported approval by the act of the retrenchment board was rescinded.

5.	The Honourable Arbitrator grossly erred in holding that the appellants waived their rights on accepting the packages when evidence lead clearly showed that before they accessed the money deposited unilaterally into their accounts by the respondent they had already started challenging the retrenchment and further their salaries had had already been cut.”

The grounds of appeal are an elaboration of one basic issue. The issue is whether or not the retrenchment was procedurally executed. In particular, the question that needs to be resolved is whether or not the appellants were properly represented in the negotiations that led to the agreement in question.

The respondent raised a point in limine, to the effect that the matter is res judicata.

Reference was made to a review judgment by CHIVIZHE J, LC/REV/H/65/10, where the application for review was dismissed.

However, the parties did not assist the court with detailed and comprehensive arguments on the point raised. There was need for some detail on how the matter referred to was disposed of, what facts and issues were canvassed and how the court determined these. There was just a broad and general averment that it was on the same issue as in the present matter. After it reserved judgment, the court requested the parties’ counsel to furnish it with the review judgment in question, as it felt the point could not be properly dealt with without an examination of such judgment. The judgment was not availed. What was instead availed were some judgments in which the parties were involved in interlocutory applications, none of which was relevant to the subject matter of the point in limine.

Given the brevity of the submissions on the point, the court was left with the distinct impression that the parties were not keen to have the matter determined on the preliminary point. They focused more on the merits of the appeal, for which there were extensive submissions, both written and oral. In the circumstances, the court was unable to uphold the point in limine and proceeded to determine the matter on the merits.

On the merits, as already indicated, the aspect of the retrenchment procedure in contention is whether or not the appellants were properly represented in the retrenchment negotiations. There appears to be no challenge on other aspects of the retrenchment procedure, as outlined in section 12 C of the Labour Act [Chapter 28:01] (“the Act”). In view of this, what should be of concern is whether provisions of section 12 C (2) of the Act were adhered to. This section provides for the framework for the conduct of negotiations, after due notice of the intention to retrench.

What must therefore be resolved is whether the retrenchment agreement concluded was in compliance with the procedure set out in section 12 C (2), as to the manner in which such agreement was secured.

Section 12C (2) provides as follows:

“(2)	A works council or employment council to which notice has been given in terms of subsection (1) shall forthwith attempt to secure agreement between the employer and employees concerned or their representatives as to whether or not the employees should be retrenched and, if they are to be retrenched, the terms and conditions on which they may be retrenched, having regard to the considerations specified in subsection (11)”.

What is clear from a reading of this provision is that the Works Council facilitates the negotiations. It “attempts to secure agreement”, such agreement being between the employer and employees concerned or their representatives. It expedites the negotiations between the employer and employees representatives.

The pertinent question is whether the employees in question, the appellants, mandated representatives to negotiate on their behalf. The facts of this matter show that they did. In this regard, the arbitrator found, at pages 5 and 7 of his award:

“The evidence submitted by the respondent clearly shows that a retrenchment committee was established in May 2010 by the Works Council …

Further, as stated above, it is noted that a sub-committee to deliberate on the retrenchment package was appointed on the Works Council meeting of 17 May 2010 which had the six members from the Workers Committee, and a final agreement on the Terms and Conditions of Retrenchment was secured by the Works Council on 8 June 2010.”

A look at the appellant’s heads of argument shows that at some stage, representatives were mandated to negotiate on behalf of the appellants.  It appears the appellants later on sought to withdraw their mandate.

Paragraphs 4, 5.8, 5.10 of the appellant’s heads of argument are instructive. They read:

“4.	The pertinent issue that arises in the present matter is whether or not an employee, who no longer wants to be represented by a workers committee, should still be represented by the same in matters that affects his or her interests.” (underlining added)

“5.8	When a workers committee ceases to represent the interest of the employees it loses its mandate and it cannot purport to represent the employee who would have declared their interest not to continue being represented by the same workers committee”. (underlining added)

“5.9	In this particular case the appellants exercised the discretion afforded to workers by section 23 (1) of the Labour Act. They informed the first respondent in writing, with a letter dated 7 June 2010, that they did not want to be represented by the workers’ committee members. The legal effect of this letter was to strip away the workers’ committee’s power to represent the interest of the employees. As such the retrenchment committee, upon receipt of this letter on 8 June 2010, was in no position to approve a retrenchment package as the employees had no one present legally and legitimately representing their interest.”

A reading of these paragraphs clearly shows that the “retrenchment committee” involved in the negotiations had the mandate of the employees. The appellants only decided to withdraw their mandate later.

The facts of the matter indicate that communication of this withdrawal was only received after the retrenchment package was concluded. There is no evidence that the retrenchment committee, or the works council which was facilitating the negotiations was informed of the withdrawal of the mandate before conclusion of the negotiations. In this regard, Mr T Mpofu, for the respondent contended, during oral submissions:

“In paragraph 4 of the appellant’s heads of argument, there is clear acceptance that these employees were properly represented, but at a certain stage decided not to be represented. But that was not communicated to their representatives until after the decision/agreement was made.

They had confidence in their representatives, but at a certain stage the confidence was eroded. It is common cause they had the authority to represent the appellants. A day before conclusion of the agreement, that is when they wrote a letter which did not get to their representatives ….

To say the agreement was procured fraudulently is an act of fraud on its own. Withdrawal of mandate was ex post facto conclusion of the matter. It was after the agreement. Where was the fraud?”

A reading of the arbitrator’s award shows that the arbitrator made the same observation i.e. of the ex post facto withdrawal of mandate from the representatives on the retrenchment committee. He cannot be faulted for holding that the appellants were properly represented, and were thus bound by the resultant agreement.

It must be borne in mind that fundamentally, the arbitrator made findings of fact. There is nothing to show that such findings were grossly unreasonable, irrational or outrageous. His decision can only be interfered with on that basis i.e. gross unreasonableness or irrationality. See Barros Anor v Chimphonda 1999 (1) ZLR 58 (S), Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S).

Further to that, the facts show that the appellants accepted payment of the agreed retrenchment package. Significantly, they do not dispute such acceptance. What however, they attempt to do is to explain it away as not being acceptance of a retrenchment package, but advance salaries or loans. Infact, their explanation is that they decided to treat the payment as advance salaries. It is not that the payments were made with an accompanying explanation or communication from the respondent, that such payments were advance salaries. On this aspect, the arbitrator’s reasoning was as follows:

“It is difficult to understand the basis on which the claimants used to conceive the retrenchment packages as advance salaries or loans. Neither did they substantiate their claim by giving evidence to the effect that the ‘retrenchment package’ was now treated as advanced salary and that this was agreed upon by the employer, they did not even provide evidence to show that the deposited packages were still in the claimants’ accounts from the date such deposits were made up to now nor did they make an effort to return the funds to the employer. They knew that the money deposited in their accounts was deposited as retrenchment packages but they continued to keep the money in their accounts.

By receiving and making use of the money paid directly as a retrenchment package, the claimants had indeed waived their legal rights against the respondent and that in consideration of all issues raised the retrenchment cannot therefore be set aside.”

The conclusion by the arbitrator is consistent with the facts of the matter. Indeed, anyone faced with such facts would also find it difficult to comprehend the basis on which the appellants regarded the retrenchment packages as advance salaries or loans.

The arbitrator cannot, given the facts looked at, be faulted for holding that the appellants waived any rights they had by accepting the retrenchment packages in question. See Chidziva & Ors v Zimbabwe Iron & Steel 1997 (2) ZLR 368 (SC).

In the circumstances, it is the court’s considered view that the appeal lacks merit and cannot be upheld.

It is accordingly ordered that:

The appeal be and is hereby dismissed.

The appellants shall bear the respondent’s costs.

Matsikidze & Mucheche, appellant’s legal practitioners

Maunga Maanda, respondent’s legal practitioners