Petrotrade (Private) Limited v Joe Kumbirayi Karambakuma & Brenda Garudzo N.O.

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/29/25
HARARE, 2nd DECEMBER, 2024
CASE NO. LC/H/1012/24
AND 25TH JANUARY, 2025
---------


IN THE LABOUR COURT OF ZIMBABWE	JUDGMENT NO. LC/H/29/25 HARARE, 2nd DECEMBER, 2024	 CASE NO. LC/H/1012/24 AND 25TH JANUARY, 2025

PETROTRADE (PRIVATE) LIMITED	APPLICANT

AND

JOE KUMBIRAYI KARAMBAKUMA	1ST RESPONDENT

BRENDA GARUDZO N.O.	2ND RESPONDENT

Before the Honourable Chivizhe J;

For the Applicant	- Mr C.J. Mahara (Legal Practitioner) For the Respondents	- Mr B. Mudiwa (Legal Practitioner)

REASONS CHIVIZHE J:

On the 2nd of December 2024 after listening to submissions and having considered the record of proceedings this court issued an order under order number LCHORD1283/24 in the following terms;

The application for condonation for late noting of an appeal and extension of time within which to note the appeal be and is hereby dismissed with costs for lack of merit.

The matter was an application for condonation for late noting of an appeal and extension of time within which to file an appeal against a determination by Arbitrator B. Garudzo which

1

determination was handed down on the 29th of February 2024. The application which was premised on Rule 22 of this court’s rules was opposed.

The material background facts to the matter are as follows;

The 1st Respondent was engaged by the Applicant in July, 2016 as its Human Resources and Administration Manager. In April 2023 allegations of serious acts of misconduct were leveled against him.1st Respondent was suspended and charged under the Labour (National Employment Code of Conduct) Regulations, Statutory Instrument 15 of 2006. Pending the commencement of disciplinary proceedings, the 1st Respondent engaged his employer for an out of court settlement.

In June, 2023 the parties reached a mutual termination of employment agreement. A material term of the agreement was that a motor vehicle, a Mazda BT50 Double Cab, Registration Number AEN8441 would be disposed as part and parcel of the settlement package. Under Clause

the disposal was to be in terms of the Motor Vehicle Policy. The disposal was to be based on the depreciated book value. The mutual termination agreement itself was effective as at 31st May 2023.

On 22 September, 2023, the Applicant wrote to the 1st Respondent making an offer to him to purchase the vehicle at a value of USD 10 000, being the market value of the motor vehicle. The 1st Respondent responded on the 29th of September, 2023 requesting to purchase the motor- vehicle at a depreciated book-value. The request was not accepted. The 1st Respondent dissatisfied approached the Labour Officer with a complaint that the Applicant had breached the termination settlement. The matter was later referred to compulsory arbitration following the issuance of a Certificate of No Settlement.

The terms of reference before the 2nd Respondent were two;

Whether or not the Respondent (now Applicant) breached the mutual termination of employment agreement in particular Clause 1.2. regarding the disposal of the motor vehicle under Motor Vehicle Policy.

The remedy.

After considering the parties submissions and evidence, the 2nd Respondent handed down an award on the 29th of February, 2024 in which she came to the conclusion that the Applicant had

indeed breached Clause 1.2. of the mutual termination agreement. She further noted that the termination itself was effective on 31st May 2024. Because the Applicant had delayed by 4 months to communicate the actual purchase price to 1st Respondent, she concluded that Applicant had therefore breached Section 13 (1) of the Labour Act [Cap 28:01] which provides for payment of entitlements upon termination of contracts ‘as soon as reasonably practicable’ after termination.

On this basis therefore, she directed, in her award, for Applicant to offer the motor-vehicle to 1st Respondent at a depreciated book value as per its Motor Vehicle policy. The Applicant was dissatisfied. Its intention was to appeal against the award by the Arbitrator. Because the appeal was now out of time, the Applicant filed the application for condonation and extension of time within which to file an appeal which was duly placed before me. A previous application filed under reference LC/H/710/24 had been struck off by my brother, Murasi J on 26th August 2024 for failure to comply with Rule 22 of this Court Rules.

APPLICATION FOR CONDONATION

The principles applicable in applications such as this one have been laid in a plethora of authorities in this jurisdiction. An Applicant is required to demonstrate to the court that the delay is not inordinate, that there is a reasonable explanation for the delay, that he has good prospects of success in the intended appeal. An applicant is also required to address where the balance of convenience lies, the importance of the case and lastly, the need for finality in litigation. See Mbatha vs Ncube, and others CCZ-07-23, Kodzwa vs Secretary for Health and Another 1991(1) ZLR 313(SC) which was aptly referred to by the 1st Respondent.

I turn to address the submission by parties in relation to these issues.

THE APPLICANT’S SUBMISSIONS

The Applicant submitted that the cumulative period of delay was 5 months. The period was said to be not inordinate. The explanation tendered was that the Applicant believed that the 1st Respondent would immediately proceed to register the award upon his receipt of the award. When it became apparent that there was no registration undertaken by 1st Respondent the Applicant then sought to explore the other options available to it. The delay was said to have also been occasioned in a bid to seek an interpretation of the award, as well as the Arbitration Act [Cap 7:15]. The Applicant also contended that the matter was further delayed as the issue of the intended appeal

had to be referred to the Board for a directive as to whether or not to appeal against the award by the Arbitrator. There was also no Board in existence at the material time. The Applicant also submitted that it did file an application on 23rd July 2023 which application was, however, struck off for non-compliance with the rules of court. The Applicant contended that the explanation rendered, was therefore reasonable. It clearly showed the delay was not willful on its part.

With regards the prospects of success the Applicant contended that the intended grounds of appeal as filed clearly showed it had good prospects of success.

The intended grounds of appeal demonstrated that the Arbitrator had misdirected herself on issues of law. In ground number 1 the allegation was made that the Arbitrator incorrectly interpreted the Motor Vehicle Policy when she found that the policy does not provide for disposal of the motor-vehicle based on market value. Whilst noting that Clause 5.2 of the Motor Vehicle Policy indeed provided for the purchase of motor-vehicle based on depreciated book value, it was Applicant’s contention that the Arbitrator had however overlooked a crucial provision in Clause 6 of the same policy. Clause 6 allows for the amendment of the policy by a Board Resolution from time to time taking into account any changed circumstances. In this case a Board Resolution had been made post facto the termination agreement on the 10th June, 2023, which resolution resolved that 1st Respondent’s motor vehicle should be disposed of at a value of USD $10 000. The Applicant contended that the Motor-Policy was amended by the same resolution. The resolution also addressed the issue of purchase price of motor vehicles for two other executive managers. The Applicant was therefore alleging a misdirection on the law on the part of the Arbitrator.

On ground number 2 which was similar to ground number 1the Applicant was contending that the 2nd Respondent erred in finding that it breached the termination agreement in circumstances where the motor vehicle policy clearly allowed for changes to be made from time to time. The proposed disposal value, contrary to the Arbitrator’s finding, was in accordance with the Motor Vehicle Policy as amended by the resolution. There was therefore no breach of the termination agreement.

In the third intended ground of appeal the Applicant was attacking the finding made by the Arbitrator that the resolution by the Board was made post facto the termination agreement. It was submitted that she failed to take into account that the process of valuation of the motor-vehicle commenced prior to the suspension of 1st Respondent. The valuation had been done in May 2023 and not 22 September 2023 as suggested by the 1st Respondent. A comprehensive report of the

valuation of all Applicants’ assets had actually been made on 15th of May 2023. The Applicant was alleging a gross factual misdirection by the Arbitrator on this point which clearly would result in the award being set aside should the court grant the condonation being sought. In the 4th and last intended ground of appeal, the Applicant intended to attack the finding made by the Arbitrator that it had violated Section 13 (1) of the Labour Act [Cap 28:01] by reason of its failure to pay out timeously the 1st Respondent’s terminal benefits.

Applicant contended that the Arbitrator clearly erred in arriving at the finding as the 1st Respondent was set to receive his settlement package in terms of the mutual termination agreement. The Applicant further contended that the Arbitrator failed to appreciate that the evaluation process had itself been initiated in May 2023. The issue of evaluation was not an afterthought as suggested by 1st Respondent. Evaluation started well before the termination agreement. The Applicant also contended that a favourable finding on the 1st, 2nd and 3rd grounds would also result in ground 4 succeeding. The submission was made that at some point in time there was no Board of Directors in place at the entity.

Lastly, the Applicant contended that the case was of grave importance to it. It was firstly, a right of every litigant to be able to test the correctness of a decision taken against it. Secondly, justice and equity in this case demanded that the appeal ought to be heard. Reference was made to Zimbabwe Mining Development Corporation vs African Consolidated Resources PLC and others SC-01-10. Applicant also contended that the balance of convenience favored it as clearly the 1st Respondent had not shown any prejudice he stood to suffer if condonation for late filing of an appeal were to be granted. He had not taken any steps to have the award registered for enforcement purposes even though that option was available to him. There was also need for finality in litigation.

THE 1ST RESPONDENT’S SUBMISSIONS

The 1st Respondent, per contra, submitted that the period of delay being 5 months was inordinate. The Applicant was also said to have made inconsistent submissions on the reasons for the delay in filing the application that was before the court and the previous application filed under reference LC/H/710/24 which was struck off in July 2024.

The 1st Respondent contended that the difference in the explanations tendered clearly showed that they were based on falsehoods and this court was urged to dismiss the explanation

that was before the court. The court was urged to invoke the ‘falsis ini uno falus in omnibus’ (false in one false in everything) principle. On the issue of prospects of success, the 1st Respondent submitted that the Arbitrator was correct in the conclusion reached that the disposal of the motor vehicle had to be on the basis of the Motor Vehicle Policy. That policy in Clause 5.2 clearly provided for the purchase of the motor-vehicle at the depreciated book value.

The facts also showed that the 1st Respondent had been allocated and utilized the motor- vehicle for a period of 5 years and 2 months a period that even exceeded the economic life of the vehicle in terms of the motor vehicle policy. The Applicant was therefore precluded from relying on the market value to assess the value as the Motor Vehicle Policy did not provide for it. The 1st Respondent’s Counsel further contended that the Arbitrator was correct in finding that the Board Resolution had been raised in September 2023, well after the termination agreement had been entered into. The 1st Respondent’s position was that the Applicant’s actions clearly amounted to an Unfair Labour Practice.

It was common cause the parties entered into an agreement in which they agreed that the value of the motor vehicle would be based on the Motor Vehicle Policy. Clause 6 of the Motor Vehicle Policy that the Applicant was seeking to rely on clearly did not apply as there was effectively no board resolution to amend the Motor Vehicle Policy which still remained as it was on 31st May 2024 (the date of effective termination of the employment contract).

The 1st Respondent’s Counsel also referred the court to Clause 6.2 of the mutual termination agreement as providing that “there shall be no alteration, cancellation, variation to the agreement unless it is reduced to writing”. In this case there had been no such variation to the agreement as reached by the parties. 1st Respondent referred to Agricultural Bank of Zimbabwe Limited t/a Agribank Celemio Machingauta (2) Chenjerai Mutambisi SC 61/07. The Applicant was precluded from relying on the variation argument. It was also the position that Applicant could not unilaterally seek to alter terms of the agreement reached. The Honourable Arbitrator therefore could not be faulted for the conclusions reached.

1st Respondent also also relied on the caveat subscriptor principle. 1st Respondent contended that once the Applicant had put its signature to the termination agreement it became bound by the terms and conditions provided therein. 1st Respondent contended that the caveat subscriptor rule clearly formed part of our law. The 1st Respondent also submitted that the Applicant violated the principle of sanctity of contract. Reference was made to Brooke vs

Davidson (1988) ZLR 365 (S). The 1st Respondent lastly contended that the granting of the application was potentially prejudicial to him. He had been unnecessarily dragged to court incurring legal bills in circumstances where the Applicant ought to have just honoured the termination agreement entered into as parties. He also had been deprived of a motor vehicle which was rightfully his. The balance of convenience therefore stood in his favour. There was also need for finality to litigation. Reference was made to Martin Jongwe vs National Foods HH2606/07. The 1st Respondent prayed for the dismissal of the application.

EVALUATION

The application before the court was for condonation for late noting of an appeal. The criteria laid down for consideration by the court, in order for it to exercise its discretion, has been laid in numerous authorities. Among these are, the extent of the delay, the reasonableness of the explanation therefore, the prospects of success on appeal, the interest of the court in the finality of judgments and the prejudice to the other party. The list however is not exhaustive.

The arbitral award that Applicant was seeking to impugn was dated 29th February, 2024. The appeal should have therefore been filed by 8th April, 2024. It was not in dispute that the cumulative period of delay was 5 months. In regards the explanation tendered, the court’s view was that the explanation tendered was not convincing. It was correct as contended by 1st Respondent that the Applicant had actually presented two inconsistent positions in regards the explanation for the delay.

. It was clear that in the previous application under reference LC/H/710/24, the Applicant had submitted as its explanation, that the delay was occasioned through a misinterpretation of this courts’ rules. In the application before me the Applicant submitted that the delay was occasioned by , firstly, the fact that it believed 1st Respondent would proceed to register the award immediately after receipt of the award. That explanation was clearly a very flimsy one. The second reason also tendered before me was that the Applicant needed time to interpret the award, as well as the Arbitration Act in order to determine its way forward. That reason was equally a flimsy reason when it is considered that the Applicant was legally represented at the hearing a quo and was still represented before me. There is no reason as to why, an entity which is manned by competent legal personnel, would take that long a period to interpret the award or the Arbitration Act for that matter. The third reason which was also not convincing was that there was a need to place the

matter before the Board in order for the Board to determine the way forward. The allegation by Applicant’s Counsel was that there was no Board in existence which fact was challenged by 1st Respondent’s Counsel in the hearing. The Applicant’s Counsel did not counter the assertion by the 1st Respondent Counsel that there was in existence a Board as at the time of the handing down of the award. Even if there had been no board in existence the approach that had been taken by the Supreme Court in a recent judgment in Tichahleyi Mpofu vs Zimbabwe Development Fund SC 33/24 was that there is still a need for public entities to ensure that provisions of the law are complied with and that the Boards that are constituted by them must function as they ought to and wherever there is a vacuum that vacuum must sufficiently be addressed.

In this case however it stood as an uncontested point that there was indeed a Board in existence. There was therefore no justifiable reason why the Board was not engaged earlier in order to obtain their views as to whether to proceed with an appeal or not. That was the ultimate responsibility of the legal personnel at the entity. The fact that the Applicant also filed a defective application before this court which was struck off was equally unconvincing. Faced with an application in which the period of delay was inordinate, the explanation tendered was also not convincing, the application could only therefore succeed if the prospects of success were good. The prospects however in this case were also very poor. The Applicant intended to raise four grounds in the intended appeal. The first ground was attacking the interpretation by the Arbitrator of the Motor Vehicle Policy with regards Clause 6. The 2nd Respondent in her award came to the following conclusion;

“From the analysis above, I hereby order that:

Respondent offers the motor vehicle Mazda BT50 (AEN8441) to the Claimant at depreciated book value as per the Respondent’s Motor Vehicle Policy.

I award accordingly.

This order is to be complied with within 21 days of receipt of the award.”

It was apparent from the award that the Arbitrator came to the conclusion that the parties had agreed that the disposal of the motor vehicle was to be based upon the Motor Vehicle Policy; that the board resolution tendered by the Applicant could not operate in retrospect as to affect the termination agreement reached by the parties; that in terms of the Motor Vehicle Policy the value was based on depreciated book value and not on a market value. The Arbitrator also found that the reference to the market value of the motor vehicle was not part of the termination agreement and

that the Applicant therefore breached the termination agreement regarding the disposal of the motor vehicle. The Applicant’s intended argument was that the Arbitrator ought to have found in its favour in view of the provision in Clause 6 of the Motor Vehicle Policy. Clause 6 provides as follows;

“6. Amendment of Policy

This Policy is subject to amendment by Board Resolution from time to time to  take into account changed circumstances.”

It was clear from award that Applicant did place the issue of Clause 6 before the Arbitrator. In her award the Arbitrator did not specifically address Clause 6. She however dealt with the issue of the board resolutions that were purportedly drawn after the termination agreement. Her view was that the resolutions could not be read to have retrospective effect as to affect the termination agreement. In other words, whilst she accepted that Clause 6 permitted an alteration of the Motor Vehicle Policy, her view was that such alteration could not be made post facto an agreement reached on the basis of the Motor Vehicle Policy as at the 31st May 2023. She also highlighted that the parties were bound to the agreement reached which had effectively terminated on 31st May 2024. She questioned how the agreement could then be altered after the effective date of termination. The Arbitrator was clearly correct in her interpretation of the termination agreement. There is no reason for faulting her decision on this point. The intended second ground of appeal was similar to the first ground of appeal. My views in respect of ground number 1 also applied to the second ground.

In regards the third ground of appeal, the Applicant intended to attack the award on the basis of her finding that the resolutions were made post facto the termination agreement. That finding was clearly correct based on the factual circumstances of this case. It was not denied by the Applicant that the mutual termination agreement was effective 31 May 2023. The Resolutions drawn by Applicant Board of Directors that were purportedly amending the Motor Vehicle Policy were drawn on 22 September 2023, a date that is clearly post facto the termination date. The submission that the evaluation process of the Applicant’s assets, including the 1st Respondent’s motor vehicle, had commenced in May 2023, was clearly neither here nor there. The bottom line was the parties in the termination agreement had agreed to have the motor vehicle value based on the Motor Vehicle Policy.

The policy as at the effective date of termination indicated disposal would be based on the depreciated value. It surely boggled my mind if indeed the Applicant intended to amend the Motor Vehicle Policy, why had it not done so before the signing of termination agreement? It was also correct as submitted by the 1st Respondent that the Applicant in this case was bound by the caveat subscriptor principle. The principle was discussed in the case of Engen Petroleum Zimbabwe Private Limited v Costxam Investments Private Limited t/a Makoni Service Station HC 1198/16. The principle of sanctity of contract which also forms part of our law certainly applied in this instance. The principle was discussed In Brooke v Davidson (1988) ZLR 365 (S) wherein the court stated that;

“…..If there is one thing which more than another public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice. Therefore you have this paramount public policy to consider that you are not lightly to interfere with this freedom of contract   to allow a person of mature age, and not imposed upon, to enter into a

contract, to obtain the benefit of it, and then to repudiate it and the obligations which he has undertaken is, prima facie at all events, contrary to the interests of any and every country”

Clause 6.3 of the termination agreement entered into between the parties also clearly safeguarded the interest of the parties. It read as follows;

“6.3 No alteration, cancellation, variation of or addition to this agreement shall be of any force or effect unless reduced to writing and signed by the employer and Employee or their duly authorized signatories.”

It was also clear that Clause 6 that Applicant sought to enforce would not apply in the factual circumstances of this matter. The parties having appended their signatures to an agreement for the disposal of the motor vehicle based on the depreciated value it was not open to the Applicant to then seek to amend the Motor Vehicle Policy after the agreement had been reached. That action on the Applicant’s part amounted to an Unfair Labour Practice. The fact that the purported board resolution also addressed the plight of two other executive managers was also neither here nor there. Two or three wrongs clearly did not make it a right. The finding by Arbitrator that Applicant breached Section 13 of the Labour Act [Cap 28:01] also could not be faulted. Section 13

provides for the timeous payment of wages and benefits of employees upon termination of employment.

Based on these findings it was clear to me that this court was unlikely to come to a different position to the position as taken by the Arbitrator in this case. The parties clearly entered into an agreement the terms of which were known and agreed to at the time of conclusion of the contract. There was an offer and acceptance that the motor vehicle would be disposed in terms of Motor Vehicle Policy. Clause 5.2 of the policy clearly provided for right to purchase based on a depreciated book value. It was clearly not open to the Applicant to therefore seek to resile from the terms of contract after the contract had been signed and sealed. The application for condonation simply stood to be dismissed as it carried poor prospects on the intended appeal.

These are the reasons for the order handed down dismissing the application.