Monaken Marketing (Pvt) Ltd v T Ruzvidzo & 18 Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT
NO LC/H/249/13
HELD AT HARARE 13TH JUNE 2013
CASE NO
JUDGMENT NO LC/H/249/13
---------




IN THE LABOUR COURT OF ZIMBABWE	     JUDGMENT NO LC/H/249/13

HELD AT HARARE 13TH JUNE 2013		     CASE NO LC/H/222/12

In the matter between:-

MONAKEN MARKETING (PVT) LTD				Appellant

And

T RUZVIDZO & 18 OTHERS					Respondents

Before The Honourable P Muzofa, President

For Appellant		N Kandira (Human Resources Manager)

For Respondents		J Denhere (Trade Unionist - ZIMBABWE FOOD

BEVERAGES AND ALLIED WORKERS UNION)

MUZOFA, P:

This is an appeal against the Arbitrator’s award which reinstated the Respondents and ordered the Appellant to restart the termination/ retrenchment exercise.

The background facts are as follows.  The Respondents were employed by the Appellant Company (the company).  On the 11th day of July 2011 the company sent a memorandum to all the employees informing them that the company was closing down for reasons the employees were aware of.  The closing date was given as the 12th July 2011 which was the following day.  The company claimed it had two options which were couched as follows:

“Option 1 – it will liquidate, but management feels that this will not benefit employees

Option 2 - the company will close its doors on the 12th of July 2011 and pay each employee as follows

A:	Salary up to 15th July 2011

B:	3 months cash in lieu of notice in terms of the Labour Act.

C:	Cash in lieu of leave days accrued

D:	Gratuity in terms of the Labour Act

If all employees agree to accept option 2, the management will make all efforts for payment to be made on or before Friday 15th July 2011.”

On the 15th July 2011 a memorandum to the company was written and signed by two Workers’ Committee Representatives and two trade union officials written

“subject:  Acceptance of one off payment for statutory entitlement

We hereby accept the offer by the employer as last full and final statutory entitlement as Monaken Marketing has closed down.  There will be no further claims thereafter from either party.”

Thereafter a memorandum agreement was prepared wherein all the employees were expected to sign, couched in the following terms

“Acknowledgement of full and final statutory entitlement payment agreement

Whereas Monaken Marketing is immediately closing down, that I accept and agree to the payment of full and final statutory entitlement and no further claims thereafter.  I, hereby acknowledge receipt of payment of the agreed (amount) by appending my signature hereto.”

The amount inserted was different depending on the employees’ different circumstances.  Out of the nineteen employees seventeen signed the memoranda and the same Trade Union officials who accepted the offer on behalf of the employees  signed as witnesses.  Two of the employees refused to sign but later accepted the offer they made affidavits to acknowledge receipt.  All the documents were signed on the 19th of July 2011.  The  affidavits were signed in August 2011.  Up to this stage the facts are agreed.  The Respondents claim the company had promised that it will negotiate the retrenchment package separately.  However later it changed to claim the offer was the full payment.  The company denied making this promise and insisted that the Respondents were aware of what had transpired all the time the negotiations were taking place.  It seems though there where no negotiations in terms of payments since the company made a unilateral offer and declaration that it was closing down.  There are documents filed of record that show that meetings were held discussing the company’s vialibility problems.

The Respondents’ representatives approached a Labour Officer to assist the parties on the 19th of July 2011.  This is the day the majority of the Respondent’s received their payments.  Finally the matter was sent for arbitration, whose order is being appealed against.  The Appellant company’s main grounds of appeal are that

The Respondents got their monies, agreed and signed no further claims thereafter (see attached copy)

Monaken Marketing (Pvt) Ltd had since closed and it is no longer there.

I will deal with each of the grounds separately.  It is not in dispute that the Respondents received some monies.  The deciding factor in this case is whether this was a retrenchment exercise or not.  Invariably this will illuminate if indeed the payments made and received heralded an amicable settlement.  The Respondents submitted that this was a retrenchment exercise and the Appellant company did not follow the proper procedures.  The payments made were understood to be for statutory entitlements, the retrenchment package was to be negotiated separately.  The Labour Act, Chapter 28:01 defines retrench in section 2 thereof:-

“in relation to an employee, means terminate the employee’s employment for the purpose of reducing expenditure or costs, … and includes the termination of employment on account of the closure of the enterprise in which the employee is employed.”

Applying this definition to the facts of this case, that the company wanted to close down since it had operational and financial challenges clearly the Company’s actions fell within the ambit of a retrenchment exercise.  Having made such a finding it is also clear from the documents filed of record and the submissions made on behalf of both parties that the Appellant did not follow the proper retrenchment procedures in terms of Section 12 (c) and 12 D of the Act.

The next issue to decide in this case is whether the memorandum signed by the Respondents accepting the statutory payments brought the matter to finality as submitted by the Appellant Company.  The parties in this case were engaged in a retrenchment exercise and this did not preclude statutory payments to be made, Section 13 (1) of the Act provides:-

Subject to this Act or any Regulations made in terms of this Act whether any person-

is dismissed from his employment or his employment is otherwise terminated or

resigns from his employment or

…

…

... shall be entitled to the wages and benefits due to him up to the time of such dismissal, termination… including benefits with respect to any outstanding vacation and notice period…” and subsection (1a) thereof provides

“wages and benefits payable to any person or… in terms of this section shall not form part of or be construed as a retrenchment package which an employee is entitled to where he or her employment has been terminated as a result of retrenchment in terms of section 12 C”

Since the Appellant Company was supposed to follow the retrenchment procedures it was still obliged to make the payments it made to the Respondents termed “statutory entitlements”.  This case is distinguishable from the case of Retrenched Employees of National Breweries Limited v National Breweries SC121/62 that was relied upon.  In that case the employees accepted voluntary Retrenchment package offered by the company and tendered their resignation.  In this case the Respondents accepted the part payments hoping the retrenchment package would be discussed.  In the Natbrew case supra, the court noted that:

“In fact where there is retrenchment, the consent of the employee or employees is not the controlling factor. What is important is to follow the procedure laid down and obtain the necessary authority, because while an attempt to reach agreement with the employees concerned should be made, the retrenchment does not depend on their consent or refusal.”

Similarly in this case the Appellant Company was mandated to follow the laid down procedure.  It cannot circumvent that procedure by resorting to some other device, in this case making the Respondents sign the document accepting the final ‘statutory payments’.

For that reason therefore the first ground of appeal cannot stand.

The second ground of appeal is that the Appellant Company has since closed down.  There was no evidence before the Arbitrator nor before this Court to show that the Company has closed.  Instead a representative whose title is Human Resources Manager represented the Appellant Company.

The appeal has no merit it is accordingly ordered that;

The appeal be and is hereby dismissed

There is no order as to costs.

Zimbabwe Food Beverages and Allied Workers Union – Respondents’ Representative