Mashonaland Tobacco Company (Pvt) Ltd v Farai Nyatanga

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT
NO LC/H/64/14
HELD AT HARARE 21TH OCTOBER 2013
CASE NO
JUDGMENT NO LC/H/64/14
---------




IN THE LABOUR COURT OF ZIMBABWE		JUDGMENT NO LC/H/64/14

HELD AT HARARE 21TH OCTOBER 2013		CASE NO LC/H/454/13

& 14TH FEBRUARY 2014

In the matter between:-

MASHONALAND TOBACCO COMPANY (PVT) LTD		Appellant

And

FARAI NYATANGA							Respondent

Before The Honourable R.F. Manyangadze, Judge

For Appellant		D Mhonda (Senior Human Resources Officer)

For Respondent		Mr D.C. Ngwarume (Legal Practitioner)

MANYANGADZE, J:

This is an appeal against an arbitral award dated the 30th of April 2013, which ordered Applicant to pay the Respondent an amount of $1200.00 to cover underpayment of incentives.

The Respondent was employed by the Appellant company as a Leaf Technician.  He worked for the company from 5 September 2011 to

14August 2012, a period of 11 months.

After he left employment, he claimed he was entitled to $4 200.00 in incentives payment.  The incentives are in the form of a bonus(es) paid to employees of the Appellant, in particular Leaf Technicians.

The papers on record show that he was paid an amount of $2 900.00 in respect of the said incentives.

The Appellant asserts that the amount paid i.e. $2900.00 constituted the full payment due to the Respondent.  The Respondent, on the other hand insists there is a shortfall of $1200.00.

The Appellant in its grounds of appeal, avers that the Arbitrator failed to

distinguish a contractual bonus from a discretionary bonus.  It further avers that the Arbitrator erroneously applied the provisions of section 12 of the Labour Act [Chapter 28:01] (the Act).  Appellant also contends that the Arbitrator unjustifiably rejected Appellant’s incentives formula, which was approved company policy, in preference for Respondent’s formula.

The law governing the whole question of remuneration and benefits is captured in Section 12 of the Act.  Of particular relevance to this matter is section 12 (2), which inter alia, provides as follows:

“An employer shall, upon engagement of an employee, inform the employee in writing of the following particulars-

………………………..

……………………….

………………………

……………………..

Particulars of the employee’s remuneration, its manner of calculation and the intervals at which it will be paid

…………………..

………………….

Particulars of any bonus or incentive production scheme

……………………

Particulars of any other benefits provided under the contract of employment.

These provisions are clear and unambiguous.  Anything affecting an employee’s remuneration, including bonuses or incentives to increase production, forms an integral part of the employment contract and should be specified therein, in writing.  I do not see any other way these clear provisions should be read or interpreted.

Now, the issue between the parties in this case is that of alleged underpayment of incentives.  Underpayment presumes an agreed level of payment was or is in existence.  The employee would have been paid less than what was agreed.  Under normal circumstances, this should be a simple, straight forward factual issue.  Something one expects to be resolved at the conciliation stage of a dispute.  It should be a question of the parties saying – this is the amount that was agreed upon – this is the amount actually paid – and this is the shortfall that is due and payable.

However, in this case, the issue has not turned out to be that clear and straight forward.  It is muddled up in formulae and computations over which there is no agreement.  The result has been protracted litigation between employer and employee over an alleged shortfall of  $1200.00

First and foremost, in a case of such a nature, it is important to establish what it is that was agreed upon.  This is the crux of the matter.  It is only after that it can then be determined what shortfall, if any, has arisen.  It is the Respondent who is alleging or asserting he was underpaid.  He must substantiate his assertion.

The Respondent bears the burden, on a balance of probabilities, of proving the amount that was agreed upon, which would then show how far the Appellant underpaid him.  Put differently, Respondent must discharge the onus of proving the underpayment that he is alleging.

It was contended on behalf of the Respondent, quite rightly, that an employer cannot unilaterally alter terms and conditions of a contract of employment, including those pertaining to bonuses and other employment benefits.  In this regard, reference was made to the case of Agribank v Clemio Machingauta and Others SC 61/07, where it was stated that terms and conditions of a contract cannot be changed unilaterally.

Having correctly stated the law, it was expected of the Respondent to show how the law was transgressed.  It was important to show what bonus or production incentives payment was agreed with the Appellant, which was subsequently altered to his prejudice.

This is where the Respondent’s case suffers.  The record does not show the agreement upon which he bases the occurrence of the

underpayment.

A perusal of the record shows some email communication between the Respondent and Appellant’s officials, in November 2012, regarding the bonus payment.  In particular, in an email to one Mr Balance, Respondent claims a bonus of $3 800.  The pertinent portion reads.

“I want my bonus money in full, that is $3800.00 united states dollars (three thousand eight hundred dollars)”

In his written submissions before the Arbitrator, Respondent claims an amount of $4200.00.  He asserts the claim as follows:

“What I have been fighting for since October is proper payment of a bonus that was promised to me based on my output.  My claim of $4200.00 still stands.  May this be known to Mashonaland Tobacco Company that I shall only REST my case when justice has been served…

Prayer

MTC to pay the following:

$4 200.00

2915.60

$1284.40

Balance of $1284.40”

It is not clear how the figure moved from $3800.00 to $4200.00.

Appellant in its submissions, gave the following breakdown:

$2505.98 – December 2012

729.43 – August 2012

394.02 – October 2012

$ 3629.43

It must however be noted that in its submissions, Appellant indicated that the amount of $729.43 was the full salary for August 2012, the month in which Respondent resigned.  This payment, being Respondent’s regular salary, cannot be treated as part of the bonus payment.  Minus this figure the bonus payment the Appellant paid is $2900.00.  Appellant is asserting that this constitutes the full and final settlement of Respondent’s bonus entitlement.  There is no shortfall.

As already indicated, there is no evidence showing when and how the figure of $4200.00 was agreed upon.  Apart from merely saying so, Respondent has not been able to show when and how the contractual agreement to pay him the $4200.00 he is claiming was concluded.  What is on record is a baldassertion that he was verbally advised on what he was entitled to.

In the absence of evidence substantiating the $4200.00, what the Respondent was paid i.e. $2900.00, must presumably be based on the bonus payment policy Appellant said governed such payments.

In her findings, the Arbitrator indicated that the tobacco weight of $1092 kg and average price of $3.48 was agreed between the parties.  The Arbitrator then went on to conclude that the evidence and submissions “corroborate the claimant’s incentives”.

It is not clear how she found that the shortfall of $1200.00 has been substantiated.  Her analysis is silent on that crucial aspect.

The Respondent, in his submissions before the Arbitrator, showed that the application of Appellant’s formula resulted in a bonus amount of $3721.67.  It appears this was not rebutted by the Appellant.  Thus, going by its own formula, the amount it paid the Respondent still has a shortfall:

$3721.00

- 2900.00

821.00

In the absence of evidence substantiating the shortfall Respondent is claiming, the shortfall arising from an application of Appellant’s documented policy is the one that should be regarded as due and payable.  With respect, the Arbitrator’s award was based on an unsubstantiated shortfall, and warrants interference, albeit to a limited extent.  This should result in some variation of the award, reducing it from $1200.00 to $821.00.  The appeal therefore will partially be allowed to the extent of the variation.

In the result, it is ordered that:

The appeal be and is hereby partially allowed.

2   The arbitral award granted on the 30th of April 2013 be and is hereby

varied by the setting aside of the amount of  “US$1200.00” and its substitution with the amount of “US$821.00”.  The Appellant is therefore ordered to pay a balance of US$821 to the Respondent.

Each party shall pay its own costs.

MANYANGADZE

JUDGE