T. Denhere and 2 Others v ZETDC

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/852/14
HARARE ON 26th NOVEMBER, 2014
CASE NO. LC/H/04/14
AND 19 DECEMBER, 2014
JUDGEMENT NO. LC-H-852-14
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IN THE LABOUR COURT OF ZIMBABWE	                          JUDGMENT NO. LC/H/852/14

HARARE ON 26th NOVEMBER, 2014		                      CASE NO. LC/H/04/14

AND 19th DECEMBER, 2014

In the matter between

T. DENHERE AND 2 OTHERS	       			–	Appellants

And

Z E T D C 							–	Respondent

Before The Honourable F.C. Maxwell, J.

For Appellants   :	Mr P. Chimutashu (Trade Unionist)

For Respondent :	Ms T. Mashiri (Legal Assistant)

MAXWELL, J.

Appellants were former employees of the Central African Power Corporation (CAPCO). They were transferred to the  Zimbabwe Electricity Supply Authority (ZESA) as security guards. After the transfer they worked until January 2012 when they were retired in terms of the ZESA Pension Fund Rules. Appellants disputed their retirement arguing that the applicable pension rules were the CAPCO Pension Fund Rules. In terms of the ZESA Pension Fund Rules the retirement age is 60 years while in terms of the CAPCO Pension Fund Rules it is 65 years.

The matter was referred to arbitration. Appellants argued that upon transfer ZESA took over obligations that CAPCO had undertaken towards them. They argued further that they cannot be subjected to terms and conditions of work that are 	inferior than those they enjoyed before the transfer in terms of Section 16(1) of the Labour Act [Cap 28:01]. The Respondent argued that upon transfer the Appellants became ZESA employees governed by its employment terms and conditions. It further argued that while the employees of CAPCO were transferred to ZESA the business of CAPCO was not similarly transferred and as a result there was no transfer of an undertaking therefore Section 16 of the Labour Act does not apply.

The Arbitrator determined that the applicable pension rules were the ZESA Pension Fund Rules. He also found that there had been no transfer of business completely or in part and therefore Section 16 of the Labour Act is not applicable. Further the Arbitrator made a finding that the Respondent erred in not giving Appellants a proper 3 months’ notice prior to dismissal and therefore Appellants are entitled to a month’s salary.

Both parties were aggrieved. On 3rd January 2014 Appellants noted an appeal on the following grounds;

The arbitrator erred grossly on the facts in finding that the Appellant’s retirement age was 60 years of age.

The arbitrator grossly misdirected himself in finding that Section 16 of the Labour Act [Cap 28:01] is not applicable in the circumstances.

Respondent filed a response on 16th January 2014. It stated that the Appellants have not appealed against the Arbitrator’s finding that the ZESA Rules apply and therefore their first ground of appeal is tantamount to an appeal against a consequence of that finding. It submitted further that the Arbitrator’s finding that the retirement age is 60 years is a finding of fact and therefore the ground of appeal is grossly irregular. On the second ground of appeal, Respondent stated that it also concerns an issue of fact. It submitted that whether or not there was a transfer of undertaking is the issue and the applicability or otherwise of Section 16 of the Labour Act is premised on the factual finding. Respondent concluded that the second ground was also irregular and the appeal should be dismissed with costs.

On 30th January 2014 ZETDC also noted on appeal on the following grounds;

The honourable arbitrator erred grossly at law in awarding the Respondents notice pay which had not been claimed by the Respondents.

The arbitrator erred grossly at law in awarding notice pay where the Respondents have no such legal entitlement.

Assuming, without conceding that there is a legal entitlement, the decision that no notice was given or that no payment in lieu was not made is grossly unreasonable as it was arrived at without hearing evidence.

On 18th February 2014 the then Respondents responded to the appeal. They stated that they raised the issue of the notice pay in their statement of claim as they had been given 2 months notice of intention to terminate their contracts instead of 3 months. They argued that as they were on contracts without limit of time they were entitled to 3 months notice of intention to terminate in terms of Section 12(4) (a) of the Labour Act. They further argued that the decision to award notice pay was arrived at after the Arbitrator considered all the submissions and evidence that was made available.

The two appeals are dealt with together in this judgment.

Whether or not the Arbitrator erred in finding that the Appellant’s retirement age was 60 years of age.

The issue of the retirement age is factual. In terms of Section 98(10) of the Labour Act [Cap 28:01] an appeal from an Arbitrator’s decision should be on a question of law. It is trite that if there is a serious misdirection on the facts, such a misdirection can amount to a misdirection in law. See National Foods v Mugadza SC 105/95. However such a misdirection has to be so unreasonable that no sensible person applying his mind to the facts would have arrived at such a conclusion. See Chinyange v Jaggers Wholesalers SC 24/04. Appellants have not made an averment that the alleged misdirection is so serious. Accordingly the Arbitrator’s finding on that issue cannot be challenged on appeal.

Whether or not the Arbitrator erred in finding that Section 16 of the Labour Act [Cap 28:01] is not applicable.

Again the Arbitrator’s finding that there was no transfer of undertaking is factual. Appellants have not alleged that that finding is so unreasonable as to defy logic. In any event Appellants did not challenge the submission by Respondent that they made a requisition for an extension of service which was not approved. The making of that requisition is tantamount to an acknowledgement that the ZESA Pension Fund Rules were applicable. Respondent aptly outlined circumstances which give rise to the rights in terms of Section 16 of the Labour Act by referring to the case of Dhege v Bell Medical Centre HB-50-04. In that case it was stated that for those rights to arise, the transferee is put in possession of a going concern the activities of which he could carry on without interruption. As stated by the Respondent the only thing that was transferred were the employees and not the business. The Arbitrator’s finding cannot be faulted in any way.

Whether or not the Arbitrator erred in awarding notice pay which had not been claimed.

The statement of claim contains a prayer for reinstatement without loss of pay and benefits. The basis of the claimants’ claim was that their contracts were prematurely terminated at age 60 when they were supposed to go up to 65. The issue of the improper notice was put in the introductory part of the statement of claim. It was not made an issue as no submissions were made pertaining thereto. In my view that issue should have been properly raised and argued before the Arbitrator. As stated in the case of Olivine Industries v Gwekwerere SC-63-05 that issue should have been argued for. I find merit in the submission that this issue was not raised or argued before the Arbitrator. The Arbitrator raised the issue  mero motu and did not hear submissions on it. As a result his decision on this aspect cannot be supported.

Whether or not the Arbitrator erred in awarding notice pay

In my view notice pay is given were a contract of employment is terminated prematurely or were there is a legal obligation to give such notice. I agree with submissions that persons who have reached the retirement age cannot be permanent but are on fixed terms contracts. They are aware of the date they will have to leave employment, i.e. when they reach the retirement age. It is trite that fixed term contracts terminate by effluxion of time. As such no notice is required. The Arbitrator therefore erred in awarding notice pay without awarding a legal basis for doing so.

Having regard to my findings on items 3 and 4 above, I find it not necessary to deal with the issue raised in the last ground of appeal in the appeal by ZETDC.

Accordingly I order as follows:

The appeal in case number LC/H/04/14 be and is hereby dismissed with costs for lack of merit.

The appeal in case number LC/H/79/14 be and is hereby upheld with costs.

The arbitral award be and is hereby amended by the deletion of item 3. In its place it be and is hereby declared that Respondent has no obligation to pay claimants 1 month salary.

Dube, Manikai and Hwacha – Respondents legal practitioners