Schweppes Zimbabwe v Stanley Takaendesa

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/107/2014
HARARE, 27 JANUARY 2014
CASE NO LC/H/850/2012
28 FEBRUARY 2014
CASE NO LC/H/401/2013
JUDGMENT NO LC/H/107/2014
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IN THE LABOUR COURT OF ZIMBABWE	 JUDGMENT NO LC/H/107/2014

HARARE, 27 JANUARY 2014 &		CASE NO LC/H/850/2012 &

28 FEBRUARY 2014				    CASE NO LC/H/401/2013

In the matter between:

SCHWEPPES ZIMBABWE						APPELLANT

Versus

STANLEY TAKAENDESA						RESPONDENT

Before The Honourable F C Maxwell	:	Judge

For the Appellant		Z T Chadambuka (Legal Practitioner)

For the Respondent		R T Masomera (Trade Unionist)

MAXWELL J:

On 25 October 2012 Schweppes Zimbabwe Limited noted an appeal against an arbitral award by Honourable P Mutsinze in favour of Stanley Takaendesa. The appeal under reference LC/H/850/12’s grounds of appeal are:

The arbitrator erred in law in coming to the conclusion that there exists an employer-employee relationship between the appellant and the respondent the termination of which would mandate compliance with the substantive and procedural safeguards set out under law.

The arbitrator further erred in law in failing to find that the contractual relationship arising in this matter exists as between the appellant and Lorimark Staffing Services with the respondent being assigned to the appellant by Lorimark Staffing Services with whom he has a relationship.

The arbitrator further erred in finding that the issue of the respondent’s proper employer has been exhausted by a final and definitive judgment of a court of competent jurisdiction.

Assuming that there is a relationship between the parties, the arbitrator fell into error in not appreciating that such a relationship is not subject to provisions of s 12 (3) of the Labour Act but would be subject to provisions of s 12 B of the same Act.

A fortiori, the arbitrator fell into error in concluding that the respondent has become a permanent employee of the appellant and holding that he was entitled to a disciplinary hearing before the termination of his alleged employment relationship.

The arbitrator also erred in creating a permanent employer-employee relationship between the parties when that was outside her terms of reference.

Alternatively, the arbitrator erred in not making a finding on the question of damages notwithstanding that the issue had been argued and all the evidence had been placed before her.

The appellant prayed for the overturning of the award with costs and its substitution with an order dismissing the claim. The respondent supported the arbitrator’s findings and stated that she correctly interpreted the law as it was and applied her mind to the issues in dispute. He pointed out that at the time of responding to the appeal, the issue of damages had been referred to the arbitrator. The respondent prayed that the appeal be dismissed as it is baseless, frivolous and vexatious.

On 16 June 2013 the respondent appealed under reference LC/H.401/2013. His grounds of appeal are:

The arbitrator erred on a point of law by finding that the respondent has not demonstrated that the working relationship between the parties is no longer tenable.

The arbitrator erred on a point of law by quantifying the back pay period only without damages.

The arbitrator erred on a point of law by ordering the parties to agree on the quantum of damages when they had already failed to agree.

The arbitrator ought to have made an award that includes both back pay and damages.

In response, Schweppes Zimbabwe Limited stated that there was no basis for the issue to be dealt with as an inhibite operated against the whole process and the main award is at any rate void for failing to deal with damages. The process embarked upon by the arbitrator was consequently void for want of proper grounding.

On 26 June 2013 Schweppes Zimbabwe Limited cross-appealed to case number LC/H/401/2013. The grounds of appeal are:

The arbitrator erred in law in relating to and determining a course on which a clausula inhibitionis applied by reason of the appeal which had been noted with the Labour Court.

A fortiori the arbitrator erred in proceeding in a manner which is inconsistent with superior court authority which authority she had no option but to give effect to.

The arbitrator further erred in making findings of fact on a trial cause without calling for and hearing evidence on the issues.

The arbitrator further misdirected herself in failing to make a determination on the point taken by the respondent bearing on the fact that she could make no findings of fact on a trial cause in the absence of the activation of a trial process, and so erred in ignoring the point as if it had not been taken.

The matters arise from the following circumstances:

Takaendesa was employed by Schweppes Zimbabwe Limited (“Schweppes”) as a lorry hand on successive one month contracts for the period 9 November 2009 to December 2010. It is alleged that on 4 January 2011 Takaendesa entered into an employment contract with Lorimark (Pvt) Ltd (“Lorimark”) as a packer/packaging and the contract was terminated on 4 February 2011 on allegations of misconduct. Takaendesa alleged unfair dismissal and referred the matter for resolution. Honourable Matsikidze ruled that Schweppes was the correct employer and not Lorimark. The issue of unfair dismissal was subsequently dealt with by Honourable P Mutsinze who ruled that:

At the time of the termination of contract in February 2011 Takaendesa’s contract was without limit of time and by virtue of the provisions of s 12 (3), the fixed term contract graduated to a permanent status.

In the absence of evidence of lawful termination of contract of employment as provided under the national code, such contract of employment is deemed to have not been lawfully terminated and amounting to unlawful dismissal.

Honourable Mutsinze ordered the reinstatement of Takaendesa without loss of pay and benefits with effect from the date of dismissal, 4 February 2011. Schweppes was ordered to pay back pay within 14 days from date of receipt of the award. If reinstatement is no longer an option damages in lieu of reinstatement should be paid over and above back pay. In the event that the parties fail to agree on the quantum, they were to approach the arbitrator for quantification of such damages. The award was rendered on 8 October 2012. On 3 June 2013 honourable Mutsinze quantified the damages as $8 371-00.

On 30 October 2013 an application for the consolidation of the matters was granted. On 27 January 2014 the parties appeared before me to argue the consolidated matters. I will deal firstly with the appeal by Schweppes Zimbabwe under reference LC/H/850/12.

The first issue to be considered is whether or not the arbitrator erred in finding that there was an employer-employee relationship between the parties. It is common cause that the parties signed specific duration contracts of employment otherwise known as fixed term contracts for the period 9 November 2009 to December 2010. Clause 13 of the contracts signed from July 2010 stated:

“13.	The parties to this contract hereby agree that during the continuance of this contract they accept that the contract may be terminated by either party giving to the other 24 hours’ notice of their intention to terminate the contract but where the employer strongly feels that your continued presence in the employment is counterproductive/exposes the company to security risk, the contract will be terminated immediately and the company pays off the 24 hour notice (pp 139 – 149 of record.)”

Previously the contracts from 1 January 2010 to 30 June 2010 had the following termination clause:

“15.	The parties in this contract hereby agree that during the continuance of this contract they accept that the contract may be terminated by either party. Notice to terminate the contract will be given by either party in writing as follows:

For two years and more – three months’ notice

For one to two years – two months’ notice

For six months to one year – one month notice

For three to six months – two weeks’ notice

For less than three months – twenty-four hours’ notice.”

It is evident that the parties were modifying the terms of the contract. As a result the contract signed for the period July 2010 to December 2010 included as clause 8 the following:

“8.	The company reserved the right to nominate the actual days to be worked and extension of the contract after termination of the previous contract is not automatic …”

Takaendesa signed a termination of specified duration employment contract form which stated the dates of the specified duration, the last being 1 December 2010 to 31 December 2010 (p 150 of record). Clearly the intention of the parties was to have the employer-employee relationship run for specified durations. If the employer did not offer an extension of that relationship the employee would be requested to sign the termination form – which Takaendesa did in December 2010. On 29 January 2011 Takaendesa signed a letter on terminal benefits in which it was stated that he acknowledges:

“… that I will be paid my terminal benefits as stated in this communication (page 157 of record)”.

It therefore follows that at the signing of the termination form the relationship between the employer and the employee terminated. The honourable arbitrator states on page 7 of the award of 8 October 2012.

“It is not in dispute that the claimant was signing successive one month fixed term contracts for the period November 2009 to February 2011 and was in continuous service with the respondent”.

The honourable arbitrator ignored the fact that on 4 January 2011 the claimant signed a contract of employment with Lorimark (Pvt) Ltd. The arbitrator proceeded to conclude that the one month fixed term contracts graduated into permanent contract in line with the provisions under s 12(3) (I assume of the Labour Act [Cap 28:01]). Section 12 (3) of the Labour Act states:

“(3)	A contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed to be a contract without limit of time:

Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months” (underlining for emphasis)

As stated above the parties were signing contracts with specific durations. Section 12 (3) of the Labour Act clearly applies to contracts which do not specify their duration. No amount of renewal will of and in itself make such a contract mutate into a permanent one. See UZ-UCSF Collaborative Research Programme in Women’s Health v Shamuyarira SC-10-10. The honourable arbitrator therefore erred in finding that the said section was applicable in casu. The employer-employeerelationship ceased on the signing of the last termination form in December 2010. As a result the appeal by Schweppes Zimbabwe succeeds.

Schweppes Zimbabwe also raised the issue that the arbitrator erred in not making a finding on the question of damages notwithstanding that the issue had been argued and all the evidence had been placed before her. In view of the finding that there is no employer-employee relationship between the parties I find it not necessary to deal with this aspect. In any event no specific relief was sought relating to this.

Now turning to the appeal under reference LC/H.401/2013 I find that it is premised upon the arbitrator’s finding that there was an employer-employee relationship between the parties. Having disagreed with the arbitrator’s finding it follows that the basis of this appeal falls away and the appeal therefore fails. Schweppes Zimbabwe cross appealed to case number LC/H/401/2013. The grounds of appeal raise two issues, that the noting of an appeal suspended the arbitral award and that the arbitrator erred in making findings of fact on a trial cause without calling for and hearing evidence on the issues.

On the first issue Schweppes Zimbabwe relied on the case of Sibangilizwe Dhlodhlo v The Deputy Sheriff of Marondera & 3 Ors HH-67-11. It appears to me that the High Court is moving away from that position as evidenced by cases that followed after it. See for instance Sanele Dhlomo Bhala v Lowveld Rhino Trust HH-263-13; Gaylord Baudi v Kenmark Builders (Pvt) Ltd HH-4-2012; and Trish Kabubu v Zimrock International (Pvt) Ltd HH-321-12.

The noting of an appeal therefore does not, in my view, suspend the operation of an arbitral award. Such award is only suspended when an interim order is given on application in terms of s 92 E (3) of the Labour Act [Cap 28:01]. For that reason the grounds of appeal relating to this issue fail.

The second issue arises from quantification of damages. I find it not necessary to deal with this issue as I have made a finding that there was no employer-employee relationship between the parties.

In conclusion I make the following order:

The appeal under reference LC/H/850/2012 being with merit, be and is hereby upheld.

The arbitrator’s decision is set aside and substituted with the following:

“Claimant’s claim be and is hereby dismissed for lack of merit.”

The appeal under reference LC/H/401/2013 be and is hereby dismissed for lack of merit.

The cross appeal under reference LC/H/401/13 be and is hereby dismissed for lack of merit.

There is no order as to costs.

Wintertons, appellant’s legal practitioners