Priscilla Mgazi N.O. v Zimbabwe International (Pvt) Limited and Josiah C. Muka

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/64/25
HARARE, 25th FEBRUARY, 2025
CASE NO LC/H/188/22
In the matter between:-
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IN THE LABOUR COURT OF ZIMBABWE

HARARE, 25th FEBRUARY, 2025

JUDGMENT NO. LC/H/64/25

CASE NO LC/H/188/22

In the matter between:-

PRISCILLA MGAZI N.O.	APPLICANT

AND

ZIMBABWE INTERNATIONAL (PVT)

JOSIAH C. MUKA

1ST RESPONDENT

2ND RESPONDENT

Before the Honourable Chivizhe, J:

For the Applicant:

For 1st Respondent:

For 2nd Respondent:

- no appearance

- Mr G. Ndhlovu (Legal Practitioner)

- Mr J. Muka in person

REASONS

CHIVIZHE, J:

The court on the 6th of September, 2022 handed down an order in the following terms;

1. The Application for confirmation of a draft ruling be and is hereby granted.

2. The draft ruling by Priscilla Mgazi, Labour Officer N.O. handed down on 6th March 2020 is hereby confirmed.

3. The 1st Respondent is directed to pay the 2nd Respondent $6 202.00 within 30 days of the date of this order.

4. Each party to bear its own costs.

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On 11 November 2024 the 2nd Respondent wrote a letter to the Registration requesting for the reason for the order granted by the court. There has been a delay in the hand down of the judgment. I express my sincere apologies to the parties. The matter was heard prior to the introduction of the IECMS platform. The record of proceedings had long been referred back to the Registry. Upon the request bythe litigant the Registrar was requested to furnish the physical record of proceeding which she duly did during the December 2024 vacation period. The following constitute the reasons for the order granted by the court.

The matter was placed before me on the 6th of September 2022 as an application for confirmation of a draft ruling by the Applicant (Labour Officer). The 1st Respondent was the employer party whilst the 2nd Respondent was a former employee of the 1st Respondent. The application had been filed in terms of S93 (5a) (a) and (b) of the Labour Act [CHAPTER 28:01]. The Applicant, in her Founding affidavit, averred that she had heard and determined a matter pitting the 2nd Respondent against the 1st Respondent. The 2nd Respondent had referred to her office a claim of unfair labour practice on 9th May 2017. The 1st Respondent had filed submissions in response to the claim on the 13th April 2018. The parties had also appeared before her for scheduled leadings. Having considered the parties submissions and the evidence she had recorded a draft ruling as attached to her papers. The 1st Respondent having failed to comply with the draft ruling she was now approaching the Labour court for confirmation of the draft ruling.

PROCEEDINGS BEFORE THE LABOUR OFFICER

A perusal of the record of proceedings indicated that the 2nd Respondent had referred a claim of unfair labour practice. His submission before the Labour Officer was that he had been engaged by the 1st Respondent on the 1st April 2009 as an Administrator Assistant. He was engaged on the basis of a contract without limit of time. He was promoted to salesman in 2009. His salary was at material time pegged at USD$886 until the 30th of June 2016 when he was served with a notice of intention to retrench. It was his further submission that through the notice of retrenchment the 1st Respondent had undertaken to continue to pay his salaries, he was to remain an employee as no negotiations had taken place on the retrenchment package. The 2nd Respondent placed reliance on Section 18 of the Labour Act [Cap 28:01] which provides as follows;

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"Any person whose employment contract is otherwise terminated shall be entitled to the wages and benefits due to him up to the time of said termination and the employer shall pay salary entitlement as soon as reasonably practible, failure of which to do so shall constitute an unfair labour practice."

The 2nd Respondent further submission was that from the time he was advised of the retrenchment he had not received anything from the 1st Respondent in terms of salaries. He was consequently claiming before the Labour Officer for the following;

(1) Salary arrears July 2020 - May 2017 - 886 × 12 (2) 3 months’ salary in notice pay

(3) Severance pay 1 month (4) Service pay 3 months

(5) Relocation allowance 1 month salary (6) Cash in lieu of leave 54 days

(7) Pension benefits deducted but not submitted $24.01 × 12 × 8 years Grand total due, $47 184.00

The 1st Respondent submission was that 2nd Respondent had been notified of its intention to retrench him by a letter dated 30th June, 2016. The letter was said to have indicated that the notice would run up to the end of September, 2016. The negotiations between the parties wereto takeplace within the same period. It was the 1st Respondent’s furthersubmission that due to the lack of agreement between the parties on the retrenchment package the 2nd Respondent had proceeded to refer the matter to the Retrenchment board. Theboard had written to the 1st Respondent confirming the payment of the minimum retrenchment package which translated to one month salary for every 2 years of service as provided in law at the time. It was 1st Respondent position that it was not obligated to pay anything more. The notice period was also said to have expired on the 30th Sept, 2016 as indicated in the letter to 2nd Respondent. The 2nd Respondent had therefore ceased to be an employee of the 1st Respondent as at that date. There was therefore no basis for claiming salaries and benefits up to the date of the draft ruling by the Labour Office. The Labour Officer in the Findings and Analysis part of the draft ruling, noted that it was not disputed that the 2nd Respondent had been served with a notice to retrench him on the 30th June 2016 which notice he had duly signed acknowledging receipt of on the 1st July 2016.

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She also noted that the same letter had also indicated that 2nd Respondent was supposed to stop reporting for duty on 4th July 2016 pending finalization of the negotiations. 2nd Respondent was however supposed to receive his salary during the period. The Labour Office also observed that the negotiations period had no fixed timeframe. 1st Respondent had also not placed before her a copy of the letter referred to the Ministry of Labour. 1st Respondent had however attached the outcome from the Retirement Board which was dated 6th April 2017 and in which the Board confirmed the retrenchment. The Board had given the terms and conditions of the retrenchment as per the new law in the Labour Amendment Act No 5 of 2015. The Labour Officer noted that whereas the claim by the 2nd Respondent had been based on the old formula, this formula had been repealed and replaced under the new Labour Amendment Act No 5 of 2015. The Labour Officer further observed that as from the date of receipt of confirmation from the Retrenchment Board, the 1st Respondent had not paid a single cent to 2nd Respondent and it was now over a year. In her concluding remarks, the Labour Officer noted that the 1st Respondent had in that respect not acted in good faith. Under Clause 7 of the letterof the 30th June, 2016 1st Respondent had indicated it would pay2nd Respondent his salary during the notice period. 1st Respondent however had not paid the same. As such the 2nd Respondent was entitled to be paid his salaries during the notice period. She also endorsed the retirement package as quantified and assessed by the Retrenchment Board.

In the result, having considered the parties’ submissions and the evidence in the record she had drawn a draft ruling in which 1st Respondent was directed to pay2nd Respondent the grand total of $6 202.00 which covered 3 months’ notice at $886= $2 658.00 plus compensation for loss of employment = $3 544.00. Although her award did not indicate the currency the award was clearly sounding in USD Dollars. This was clear as in his claim before her the 2nd Respondent had referred to a salary in USD dollars.

PROCEEDINGS BEFORE LABOUR COURT

The 1st Respondent, in response to the application, took a point in limine that the application was improperly before the court as the application had been filed seven (7) months after an order issued by this court on 15 September 2021 in which Applicant was directed to file the application for confirmation within seven days of the date of the order. The 1st Respondent

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position was that the application was therefore improperlybefore the court and had to be struck off the roll.

On the merits, the 1st Respondent submitted that it was in support of the draft ruling. It was contended that the 2nd Respondent had been requested soon after receipt of the confirmation notice from the Retrenchment Board on 6th April, 2017, to furnish his banking details. He had however refused to do so on the basis that he was still intent on challenging the retrenchment. After the draft ruling had been issued 1st Respondent had complied by transferring the full amount of $6 202.00 into Respondent’s Ecocash account on 19th of November 2020. Proof was tendered in the form of Annexure “B” its papers. 2nd Respondent had however rejected the amount and returned it to 1st Respondent. 2nd Respondent’s representative had thereafter called 1st Respondent to ask why payment was in Zimbabwean dollars and not in USD dollars. The 1st Respondent position before the court was that it had fully complied with the draft ruling, 2nd Respondent had however rejected the amount. He had therefore waived his right to be paid. 1st Respondent was however still tendering the same amount to the 2nd Respondent.

The 2nd Respondent in response to the application submitted that the 1st Respondent

was approaching the court with dirty hands as it had dishonored the binding retrenchment agreement between the parties. The 1st Respondent had also chosen to pay the ‘minimum retrenchment package’ without the parties’ agreement on that. The 2nd Respondent also contended that the 1st Respondent had also changed his salaryto include benefits on an existing salaryinstead of adding the benefits in 2011. The employer was also alleged to have committed several unfair labour practices against him like failing to pay the yearly bonus, by trying to dismiss him in February 2011, by dismissing 2nd Respondent in 2011. The 2nd Respondent also alleged that 1st Respondent had violated his rights after penning the retrenchment letterin 2016. No further particulars were however provided.

PARTIES SUBMISSIONS

Mr Ndhlovu, for the 1st Respondent, submitted that the 1st Respondent supported the draft ruling. It had to be noted that at the time of issuance of the draft ruling the retrenchment board had already approved the retrenchment. The Labour Officer only had to endorse the package confirmed by the Board. She had however gone ahead and awarded the 2nd Respondent an additional 3 months’ salaryin lieu of notice. Mr Ndhlovu also submitted that it was the position

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of law in 2016 when the retrenchment board confirmed the retrenchment that on the basis of the provisions in Statutory Instrument 33 of 2019 the retrenchment package which was sounding in USD dollars had to be disbursed in RTGS dollars at the rate of 1:1. The prayer was therefore for the draft ruling to be confirmed. Mr Muka, who was appearing in person, in counter submitted that the 1st Respondent had treated him unfairly.

1st Respondent had not complied with the parties’ virtual agreement. He further submitted that he was supposed to have been paid immediately after the confirmation by the Retrenchment Board. Mr Muka also contended that the Labour Officer had omitted to award him gratuity bonus, pension increments etc. This was despite the fact that the claims were placed before her. His prayer was for the court to grant him the same. In regards the payment of the retrenchment package in ZWL he submitted that this was unfair to him as he had toiled hard over the years for him to receive the pitiful amount. His view was that the employer had placed him in this situation, if he had been paid immediatelyafter the retrenchment notice came then the amount would not have been affected by Statutory Instrument 33 of 2019.

Mr Ndhlovu, in his reply, noted that he could not defend his client actions. He however

wanted it noted that it would be illegal for the court to proceed against the clear tenets of law as enshrined in Statutory Instrument 33 of 2019. That statute was binding on the court as well as the parties. In regards the additional claims made for gratuity, bonus, pension, increments, his submission was the parties that had not reached an agreement on these claims. The Labour Officer had quantified the package on the basis of the retrenchment board recommendation. In this case also made a cursory observation that the 2nd Respondent was actually not opposed to the application Mr Ndhlovu only complaint was that he had suffered loss as a result of the introduction of Statutory Instrument 33 of 2019. There was nothing the court or the parties could do as a result of the circumstances. The court was urged to confirm the draft ruling as it was.

The court in its findings/analysis of the issues before the court noted that the powers of

the Labour Court in hearing an application as the one placed before the court was either to confirm or refuseto confirm the draft ruling. This was clear on the basis of the law as prevailing then. The law was captured in the provisions in Section 93(5a)(a)(b) as they were at the material time. Thecourt after consideringthe submissions byboth parties found that the Labour

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Officer in drawing up the draft ruling had relied largelyon the Retrenchment Board notice. The Retrenchment Board’s Confirmation Notice dated 6th April, 2017, had recommended one month’s salary for every two years of service which was the minimum retrenchment package then under Section 12C(2). Section 12C(2) as it read in April 2017 was as follows;

“Unless better terms are agreed between the employer and employees concerned or their representatives, a package (hereinafter called “the minimum retrenchment package”) of not less than one month’s salary for every two years of service as an employee(or the equivalent lesser proportion of one month’s salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment(whether the loss is occasioned by retrenchment or by virtue of termination of employment pursuant to section 12(4)(a), (b), or (c), no later than date when the notice of termination of employment takes effect”

It was also clear to the court that the parties had clearly attempted to negotiate for better terms of retrenchment but had failed to agree. This was the reason 1st Respondent had referred the matterto the Retrenchment Board. The provisions also wereclear that in the event of parties failing to reach agreement the employer had to pay the minimum package in terms of the Labour Act (Cap 28:01). Myview was that the 2nd Respondent would have been better served had he persisted with negotiations with his employer at the time. Once they failed to reach the agreement the 1st Respondent had no option save to refer the matterto the Retrenchment Board.

The court also noted form the record that the claims made for bonus/gratuity were claims that the parties had not reached agreement upon. With regards the pension claim clearly this had no basis as the record of proceedings showed that in a letter dated 18 July 2017 by 1st Respondent’s legal practitioner to 2nd Respondent’s legal practitioner was advised that 2nd Respondent’s pension payment had been remitted to NSSA during the duration of 2nd Respondent’s contract. There was clearly therefore no basis for 2nd Respondent placing the claim before the Labour Court.

Ultimately it was the view of the court that the 2nd Respondent was not opposed to the application per se. He just felt he had been short changed because the 1st Respondent had delayed in paying the retrenchment package. He would have received it in US dollars had the 1st Respondent paid him immediately after the retrenchment package was approved. The package was however later affected by the introduction of Statutory Instrument 33 of 2019. The court hands were clearly tied. Statutory Instrument 33 of 2019 having been introduced as a new monetary policy it had to be complied with by all and sundry. Section 4(1) d of the Presidential Powers (Amendment of Reserve Bank of Zimbabwe Act) and Issue of Real

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Time Gross Settlement Electronic Dollars (RTGS Dollars) Regulations, 2019 (S.I. 33/2019) made it clear that all assets and liabilities expressed in United States dollars prior to the effective date of 22 February, 2019 ‘shall’ be deemed to be assets/liabilities in RTGS dollars at the rate of one to one.

In arriving at the position that the retrenchment package had been correctly tendered by

the Respondent in Zimbabwean dollars the court considered the following.

The Supreme Court had at the material time had an occasion to interpret the provisions of Statutory Instrument 33 of 2019. It had been established through case law that for an asset, liability or obligation to fall within the ambit of Section 4(1) (d) of Statutory Instrument 33 of 2019 its value had to have been expressed in United States Dollars before the effective date of 22 February, 2019. Most of the cases were following in the footsteps of the seminal decision in Zambezi Gas Zimbabwe (Pvt) Ltd vs NR Barber and Anor SC 3-20 wherein Malaba C.J had stated writing for the Supreme Court as follows;

“Section 4(1)(d) of S.I. 33/2019 would not apply to assets and liabilities, the values of which were expressed in any foreign currency other than the United States dollar immediately before the effective date. If, for example, the value of the assets and liabilities was immediately before the effective date, still to be assessed by application of an agreed formula, S 4(1)(d) of S. I. 33 of 2019 would not applyto such a transaction even if the payment would thereafter be in United States dollars. It is the assessment and expression of the value and liabilities in United States dollars that matters.” (My own underlining.)

It is clear in casu that the retrenchment package had been assessed and determined by the Retrenchment Board. The Labour Officer had simply confirmed the quantified value of the retrenchment package. It was clear to the court that the assessment and expression of the value of the retrenchment package had been made prior to the effective date. It had been made on 6th of April, 2017. That was the date that was important for purposes of determining whether the obligation fell within the ambit of Section 4(1) (d) of Statutory Instrument 33 of 2019. It was clear that the value of the retrenchment package having been expressed in United States Dollars before the effective date of 22 February, 2019 the exchange rate applicable was of one USD to one RTGS.

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The argument by the 2nd Respondent that the origin of the liability had to be based on the date on which the Labour Officer’s draft ruling was handed down clearly was not merited. The value of the package had been determined by the Retrenchment Board in 2016. The employment contract had also clearly terminated per agreement in September 2016. If the 2nd Respondent had taken the option to receive the package then he certainlywould have been paid in the US Dollars. It would appear that the matter dragged as the 2nd Respondent was intent on negotiating a better package even after the package had alreadybeen assessed and approved by the Retrenchment Board. It seems however that once the monetary policy had shifted and S.I. 33/2019 came into force the court and indeed all the parties were bound to follow the law. This is the reason why the court handed down the order in the terms as indicated above.