Letwin Sigauke N.O. v Champions Insurance (Private) Limited and Maureen Mhembere

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/115/21
HELD AT HARARE ON 14TH JUNE, 2021
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE	       JUDGMENT NO. LC/H/115/21

HELD AT HARARE ON 14TH JUNE, 2021               CASE NO. LC/H/LRA/252/19

AND 30TH JULY, 2021

In the matter between:-

LETWIN SIGAUKE N.O.							Applicant

Vs

CHAMPIONS INSURANCE (PRIVATE) LIMITED			1ST Respondent

And

MAUREEN MHEMBERE							2nd Respondent

Before the Honourable Mhuri, J.

For Applicant		:	No Appearance

For 1st Respondent 	:	Ms M. Moyo (Legal Practitioner)

For 2nd Respondent 	:	Mr. T. Matonhodze (Legal Practitioner)

MHURI J.

On the 28th May 2019 applicant issued a ruling to the effect that:-

the retrenchment procedure was properly adhered to;

there was variation of provisions of the contract of employment;

the respondent be ordered to pay a total amount of $63 621 within 30 days of receipt of the ruling;

the respondent remit an amount of $7 653.56 to the Pension Authority within 90 days of receipt of the ruling.

It is this ruling which is subject of this application for confirmation pursuant to Section 93(5a) and (5b) of the Labour Act [Chapter 28:01] as amended.

First respondent is not averse to the ruling being confirmed as it has since made payment in full in the amount of $63 621.30 as ordered by applicant.

The 2nd respondent is also not averse to the ruling being confirmed but with amendments to the effect that 2nd respondent was unlawfully terminated and must be paid damages in lieu of reinstatement.

In summary, 2nd respondent’s arguments against applicant’s findings that the retrenchment procedure was properly adhered to, are based on the letter by 1st respondent dated the 1st December, 2016 addressed to 2nd respondent.  The letter reads:-

“RE: NOTICE OF TERMINATION OF EMPLOYMENT AS PROVIDED FOR IN TERMS OF SCTION 12(4a), (d) AND 12C OF THE LABOUR ACT [CHATER 28:01] (AS AMENDED BY THE LABOUR AMENDMENT ACT NO.5 OF 2015)

This letter serves to give you notice of the employer’s decision to terminate your contract of employment in terms of section 12(4a), (d) and 12C of the Labour Act [Chapter 28:01]

The employer will pay you the minimum package of one month’s salary for every two (2) years served as provided for in terms of Section12C (2) of the Labour Act in full and final settlement of the compensation for your loss of employment.  You will also be paid any accrued vacation leave days you may have.

Please be advised that you shall no longer be required to report for duty with effect from the date of receipt of this letter.

You must immediately surrender all the employer’s assets in your custody upon being served with this letter,”

The 2nd respondent’s position was that this letter shows that 1st respondent unlawfully and summarily terminated her contract of employment.  It was her submission that applicant erred when she relied on documents that 1st respondent filed after the complaint had been raised and referred to the applicant’s offices, i.e. (Ministry of Labour).  She submitted that the procedures enumerated under Section 12 (4a) of the Act were not properly followed hence her contract was not properly terminated in terms of the said section.

Section 12(4a) reads:-

“No employer shall terminate a contract of employment on notice unless –

the termination is in terms of an employment code or, in the absence of an employment code, in terms of the model code made under section 101(9); or

the employer and employee mutually agree in writing to the termination of the contract; or

the employee was engaged for a period of fixed duration or for the performance of some specific service; or

pursuant to retrenchment, in accordance with Section 12C."

2nd respondent’s submission was that 1st respondent did not follow the procedures stipulated under Section 12C.  Section 12 C provides the procedure as follows:-

“12C Retrenchment and compensation for loss of employment on retrenchment or in terms of Section 12(4a)

An employer who wishes to retrench any one or more employees shall –

give written notice of his or her intention –

to the works council established for the undertaking; or

if there is no works council established for the undertaking or if a majority of the employees concerned agree to such a course, to the employment council established for the undertaking or industry; or

if there is no works council or employment council for the undertaking concerned to the Retrenchment Board and ………………………………

provide the works council, employment council or the Retrenchment Board, as the case may be, with details of every employee whom the employer wishes to retrench and of the reasons for the proposed retrenchment; and

send a copy of the notice to the Retrenchment Board.

Unless better terms are agreed between the employer and employees concerned or their representatives , a package (……..) of not less than one month’s salary or wages for every two years of service as an employee (…………………………….) shall be paid by the employer as compensation for loss of employment ……………………………”

2nd respondent submitted, none of the above was done by 1st respondent hence the termination of her contract by 1st respondent, 1st respondent was unlawful and applicant ought to have ruled as such.  1st respondent’s letter was clearly worded as a dismissal letter and not intention to retrench.

It was also 2nd respondent’s submission that 1st respondent only approached the Retrenchment Board after it realised that it had unlawfully dismissed the 2nd respondent and its ensuing process of referring the matter to the Retrenchment Board was aimed at sanitizing the unlawful dismissal.  In this regard, 2nd respondent submitted, that applicant failed to appreciate this fact and as such her ruling ought to be amended accordingly.

On the other hand 1st respondent submitted that the retrenchment process was procedurally done as evidenced by the letter of the 1st December 2016.  Further 1st respondent submitted that 2nd respondent declined to attend the retrenchment negotiation discussions, as such 2nd respondent cannot fault the lawful retrenchment process.  It was also submitted that by accepting the payment, 2nd respondent had waived her right to challenge the process and applicant’s ruling.

Two issues arise that need consideration, and these are:-

was the applicant correct in holding that the retrenchment was properly adhered to.

by accepting the payments did 2nd respondent waive her right to challenge the ruling.

From the title and the first 2 paragraphs of the letter of the 1st December 2016 addressed to the 2nd Respondent it can be understood that 2nd respondent’s termination of contract was a retrenchment in terms of Section 12 (4a)(d) and 12C of the Act.  However the subsequent 2 paragraphs completely change the whole complexion of the termination.  1st respondent missed two processes, one being notice to retrench and the other being summarily dismissing the 2nd respondent from employment.  The retrenchment procedures outlined in Section 12C do not provide for what is captured in the last 2 paragraphs of the letter.  This explains why the applicant had to state that the letter was not very clear as to whether it is a notice of intention to terminate or a letter of termination.  With this ambiguity, therefore it was not safe or proper for the applicant to find that the retrenchment procedure was adhered to.

Further, paragraph (2) of Section 12C presupposes a discussion by the parties of a package.  In casu, the letter of the 1st December 2016 to 2nd respondent does not show that this was done.  Paragraph 2 thereof just states what package will be paid.  It was only on the 29th December that 1st respondent called 2nd respondent to participate in negotiations of her retrenchment package.

By the 5th December 2016, 2nd respondent challenged 1st respondent’s letter of the 1st December 2016.  She referred the matter to the Labour Officer, Ministry of Public Service, Labour and Social Welfare.  Filed of record pages 101 and 104 are two letters dated 1st December 2016 addressed to the Chairman Retrenchment Board one being a notice of termination of 2nd respondent’s contract of employment on the basis of retrenchment in terms of Section 12 (4a) (d) and 12C of the Labour Act, and the other being Annexure 1 and Annexure 2 giving the details of the 2nd respondent and her legal practitioner and the reason for the retrenchment.

It is noted that in 2nd respondent‘s letter, the reason for the retrenchment was not stated.  It is noted, as submitted by 2nd respondent that by the 1st December, 2016 2nd respondent had not yet engaged her legal practitioners, so one wonders how 1st respondent included the legal practitioners in its notice to the Retrenchment Board.  The submission by 2nd respondent that the letters to the Retrenchment Board were back dated so as to cure the mistake done through the letter to 2nd respondent, sounds credible.  All the processes that were subsequently done by 1st respondent were of no legal effect as 2nd respondent had been unlawfully terminated with immediate effect through the letter of the 1st December 2016.  For it to follow the correct procedure for retrenchment, 1st respondent ought to have first revoked its letter of the 1st December, 2016.

All having been said, I find that applicant erred when she ruled that the retrenchment procedures were adhered to.  In view of the anomalies pointed out, applicant ought to have found that 2nd respondent’s contract was unlawfully terminated.

As regards the issue of waiver, I am not persuaded by 1st respondent’s submission that by accepting payment, 2nd respondent had waived her right to challenge the ruling.  Acceptance of the retrenchment package does not automatically translate to waiver in my view.  In casu, 2nd respondent made it very clear to 1st respondent through correspondence date 1st March, 2017 that any payment made towards her is not an acceptance of the lawfulness of the purported retrenchment and/or termination of her contract.  It was not disputed that the payments were made well after the above position was relayed to 1st respondent.  Further, I tend to agree with 2nd respondent’s submission that she declined to attend the retrenchment package negotiations called by 1st respondent as from the 20th December, 2016 as she had been summarily dismissed from her employ.  She was no longer an employee and did not want to sanitise the illegal process which 1st respondent was then embarking on.  This therefore cannot be taken as waiver.

As both respondents are not averse to the ruling being confirmed, 1st respondent on the basis that since the total amount of $63 621,30 as ordered by applicant has been paid, 2nd respondent on the basis that the ruling on unilateral variation of contract of employment is correct but with amendment to the 1st paragraph that reads,

“the retrenchment procedure was properly adhered to” to read

“2nd respondent was unlawfully terminated and must be paid damages in lieu of reinstatement.”  I will confirm the ruling with amendments.

Since I have found in favour of 2nd respondent, I will confirm the ruling with amendments as prayed for by 2nd respondent.

Accordingly it is ordered that:-

the ruling dated 28th May, 2019 by applicant in the matter between Maureen Mhembere (2nd respondent) and Champion Insurance (Private) Limited (1st respondent)be and is hereby confirmed with an amendment to paragraph (i) to read

“the contract of employment was unlawfully terminated, Maureen Mhembere to be paid damages in lieu of reinstatement which damages are to be negotiated between the Parties upon failure of which either party approaches the Labour Court for quantification.  The amount already paid by 1st respondent to be considered in the negotiation for damages.”

there was variation of the provisions of the contract of employment.

1st respondent remits an amount of $7 653,06 to the authority responsible for 2nd respondent’s pensions within 30 days, from this Court’s Order.

CALEB MUCHECHE & PARTNERS – 1ST Respondent’s practitioners

MATIZANADZO & WARHURST – 2nd Respondent’s legal practitioners