Perrens Dry Cleaners v L Ngoma & 4 Others

### Preamble
IN THE LABOURNCOURT OF ZIMBABWE
JUDGMENT NO LC/H/192/14
HELD AT HARARE 14TH MARCH 2014
CASE NO [CASE NUMBER]
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IN THE LABOURNCOURT OF ZIMBABWE	JUDGMENT NO LC/H/192/14

HELD AT HARARE 14TH MARCH 2014			CASE NO LC/MC/04/14

& 28TH MARCH 2014

In the matter between:-

PERRENS DRY CLEANERS					Appellant

And

L NGOMA & 4 OTHERS					Respondents

Before The Honourable L Kudya, Judge

For Appellant		H.B.R. Tanaya (Legal Practitioner)

For Respondents		P Muzondo (Trade Unionist)

KUDYA, J:

This is an application for the stay of an arbitral award which was made in the respondent employees favour following a complaint of unfair labour practice by the applicant company on the respondent employees.

Background to the matter is that the respondents who were in applicant’s  employ since 2002 approached the arbitrator following a labour dispute where they argued that the applicant company had treated them unfairly by continuously keeping them on short time working arrangement to avoid retrenchment beyond 12 months stipulated by the Labour Act.  Their contention was that since the further renewals beyond the first 12 months stint was not sanctioned by law they were thus entitled to be paid all the salaries in full which they should have gotten at the time that they worked in the “unlawful” short time arrangement .

The arbitrator ruled in their favour.  Aggrieved by the arbitral award the applicant appealed to the Labour Court and that appeal is still pending. Awaiting the set down of the appeal the applicant decided to approach the court on the application for stay of the arbitral award which application is the subject of this judgment.

The law relating to stay applications is settled; it being that the applicant has to satisfy the court that it has good prospects of success on the main appeal or application and that the balance of convenience in the case favours the grant rather than the dismissal of the application.

In the case at hand the major argument advanced by the applicant is that it has strong prospects on appeal because in its view the arbitrator wrongly interpreted section 12 D Labour Act which deals with short time measures.  It was its argument that the intention of the legislature was to allow for continued renewals of the 12 months stint so that at every stage the parties would be able to assess whether the situation of the employer would have improved or worsened thus dictating whether the measures continue, the company packs up or normalcy is returned to if the fortunes would have improved for the better.

It also argued that since the renewals were done with consent of the employees and sanctioned by the National Employment Council NEC the employees could not now renege on their consent and seek to be unjustifiably enriched by the applicant by their seeking to be paid for time which they did not work over the short time period.

Applicant also advanced a further argument that in its view the debts which the arbitrator said respondents had to be paid for had prescribed as according to its interpretation no debt can be continuing but becomes due on its date.  To that extent, the respondents efforts to seek to be paid what was way beyond the 2 year labour dispute period sanctioned by law it meant that the applicant had a strong case on appeal for the upsetting of the arbitral award.

Finally the applicant argued that the arbitral award was against public policy as it sought to unjustly enrich the respondents where they had no lawful entitlement to the money so awarded.

On a convenience plane the applicant argued that the applicant is the only dry cleaner with the kind of equipment meant to service big entities like Mutare General Hospital.

It also argued that some employees chose to remain with it and these depended on the applicant together with their families.  If stay is not granted all the above mentioned stake holders would stand to lose irreparably.   No prejudice would be suffered by the respondents if they are to wait for the appeal to be heard to finality which is likely to be soon taking into account the imposed set down set up in the appellate court.  In its view if the appeal finally fails the respondents would still be able to execute.

To the contrary if the stay  is denied and the respondents go ahead with execution it would mean that in the event that the appellant succeeds it would not be able to recover from the respondents given their limited means.  In the premises the applicant thus persisted in its prayer that the scales were more in favour of grant of the stay than denial of the same for the above stated reasons.

In response the respondents maintained that the applicant had no prospects of success at all.  This is so because in its view Section 12 D is so clear that it does not deserve any other interpretation than what was given to it by the arbitrator and also from the plain reading of the provisions in question.

The respondents maintained that since the short time arrangements which were done beyond the sanctioned 12 months period were not backed by law the applicant could not seek to benefit from that illegality by refusing to satisfy the arbitral award arguing that the respondents had consented to the “illegal” arrangement.

Respondents argued further that there was no public policy argument advanced by the applicant in that if indeed the applicant is such a critical player in the industry whoseshort stints would negatively impact on big stakeholders like Mutare General Hospital then more the reason why it should be operating viably and not resorting to the “illegal” short times which gave rise to the instant case.

To the contrary it is the respondents’ view that the repeated short time stints are indicative of an entity which has failed which should accept that it has seen its day and if need be have its operations wound off for the benefit of respondents and other creditors.  The respondents also argued that for the disputed period they received derisory salaries which is contrary to the public policy which the applicant is preaching about.

The respondents also maintained that the debt arose from a continuing illegal practice hence the applicant cannot shy away from meeting its dues.  In the result, the respondents argued that the application for stay had no good prospects and the balance of convenience favoured the dismissal of the same so that if the respondents are keen or executing it they can do so without any further hindrance.

As regards the prospects of success argument a reading of the Act Section 12 D is clear that it is couched in peremptory terms to the following effect “… recourse either or both of the following measures for a periodnot exceeding twelve months…”  A plain reading of this section does not demonstrate an ambiguity which might call into pay the enlisting of the various canons of interpretation.

That being the case it is clear that any arrangement that went outside the 12 months period with or without the consent of the employees or without the blessing of the NEC was indeed unlawful. In the result therefore the other argument about prescription or unjust enrichment thus fall away as it is patently clear that the agreement which the arbitrator ruled unenforceable was indeed so. This puts the prospects of success on the matter at a low level.

On the convenience argument the court needs to state that the essence behind resorting to short time measures is to avoid retrenchment.  The stipulation of 12 months in the courts view creates the impression that it is thus hoped that by the 12 months the entity would have shaped  up if not and the entity is failing to stand on its feet then the fate of liquidation etc would naturally follow suit.

Retrenchments or liquidations are indeed undesirable as they do not assist any one that is both the affected parties or society at large.  However, at the same time it would be grossly irregular for an employer to bury its head in the sand of reality when it is clear that nothing in its fortunes is changing for the better.  In the instant case if facts on record are anything to go by the parties agree that since as for back as before 2011 the short time measures were put in place and these have persisted.  It is a clear indication that there is no miracle which is going to happen to the applicant hence it would be irregular for the court to accept that public policy dictates that the respondents wait forever on the appeal which has already been stated above to be devoid of merit.

Notwithstanding the fact that respondents are of limited means, but if that is taken against the back drop of the weakness of the appeal merits the court is persuaded that no good case for stay has been made out.  It should accordingly fail.

IT IS ORDERED THAT

Application for stay of execution of the arbitral award being without merit it be and is hereby dismissed with costs.

L KUDYA

JUDGE – LABOUR COURT