T. Kachamba & 2 Others v Methods Security & Anor

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/692/2013
HARARE, 21 NOVEMBER 2013
CASE
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IN THE LABOUR COURT OF ZIMBABWE	                 JUDGMENT NO. LC/H/692/2013

HARARE, 21 NOVEMBER 2013	           			         CASE NO. LC/H/671/11

AND 06 DECEMBER 2013

In the matter between:-

T. KACHAMBA & 2 OTHERS				             Appellants

And

METHODS SECURITY        					    1st Respondent

MR. MUMANIKIDZWA						    2nd Respondent

Before The Honourable B.T. Chivizhe, Judge

For Appellant		Mr N. Murisa (ZFTU)

For Respondent		Mr  W. Nyika (Legal Practitioner)

CHIVIZHE, J.

The matter was placed before me as an appeal against an arbitral award handed down on 9th of September 2011.

The three Appellants were all employed by the 1st Respondent as Security Guards.  They were on their last engaged to guard Medtech Holdings in Harare and Bulawayo.  The 2nd Respondent is cited in his capacity as Director of Methods Security.

Medtech Holdings terminated services of 1st Respondent by giving one month notice.  According to submissions before the Arbitrator the first Respondent was immediately forced into involuntary winding or liquidation as a result.  The 1st  Respondent faced with compulsory liquidation disposed of the Company’s few assets in order to settle its debts and liabilities.  The 1st Respondent then purportedly entered into mutual termination agreements with the Appellant.  The Appellants thereafter referred a complaint of alleged non- payment of notice pay, leave pay and public holidays. Upon failure to settle conciliate the matter was referred to compulsory arbitratration.  The terms of reference were for the Arbitrator to determine whether the Appellant claims for notice – pay, leave pay and public holidays were valid.

The Arbitrator in his award found that the Appellant having entered into settlement or compromise with their employer had failed to justly their claims.  The Arbitrator consequently dismissed the claims by the Appellants.   Aggrieved the Appellants then lodged the present appeal with the Labour Court.

The appeal has been noted on the following grounds of appeal;

“The Arbitrator misdirected himself by failing to take into consideration the principles of National (sic) Justice by ignoring the Appellant’s submissions on the following:

Yes, it is true that the 1st Respondent was offering services of Security Guard to Medtech Holding, but Medtech Holding gave the 1st Respondent a notice of 4 (four) full months and verbally told the Appellants that he would give 3 full months case in lieu of Notice.  The 1st and 2nd Respondents then decided to use the money for other purposes, leaving out his statutory obligations due to the employees.

It is also clear in the submissions and natural understanding that it is Mr. Mumanikidzwa, the 2nd Respondent who misdirected the funds and him being the Direct of the company, it is only him who should reimburse the funds to pay the statutory obligations of the 1st Respondent.  Who else would the Appellant have cited as the 2nd Respondent.

The issue of compulsory liquidation was neither here nor there since the process of liquidation was never followed.  The circumstance surrounding this was purely a retrenchment which the employer only wanted to avoid.

The appellants deny that they ever signed a document of mutual termination.  They made it clear in the oral hearing but the arbitration did not take note of that fact for his own reasons.  The Respondent himself even admitted that he had made a mistake of not paying the appellants the notice pay and leave days since enough money was available but the arbitrator ignored that aspect.  There is no-were the appellants could have signed for a full and final settlement after having received only $100.00 and in the absence of leave days and notice pay.  Infact the appellants claim that the purported document produced as evidence by the respondents is not the document which they signed when they received $100.00.

The arbitrator did not put his Legal Labour knowledge to this matter.  He only considered the submissions of the Respondent and ignored his knowledge of Natural Justice.  On the last day of the oral hearing the appellant were told to go and prepare their statement of claim but before they submitted the statement they were surprised to receive an award which was contrary to what had happened in the oral hearing as if the arbitrator had another separate meeting with the Respondent, in their absence.  Does that mean that if the employees are not represented then they have to suffer and must not get their entitlements. “

The Appellant’s grounds of appeal apart from being couched in a narrative form do not clearly raise points of law.  Section 98 (10) of the Labour Act [Cap 28:01] enjoins that appeals to the Labour Court against arbitral award be on points of law.  Apart from that the grounds also raise new issues which were not before the Arbitrator.  It is hard to imagine that the issues being raised by the Appellants could have been raised before the Arbitrator and the Arbitrator overlooked to address them.  I shall however proceed to determine the grounds in turn.

The first ground is that upon the 1st Respondent receiving notice of cancellation of its contract with Medtech, the 1st Respondent orally  advised the Appellant that they would be paid 3 months cash in lieu of notice.  The Appellants by this submission clearly admit to the involuntary liquidation of the 1st Respondent through premature termination of the contract between Medtech and 1st Respondent.  The 1st Respondent’s operations automatically came to a halt on 30th October 2010. The 1st Respondent before the Arbitrator submitted that it could not have been expected to pay 3 months statutory notice when it had been given one month notice by Medtech.  The Arbitrator in his award accepted that given the unusual state of affairs the parties had reached mutual settlement and Appellant had been paid out in terms of the settlement.  The Arbitrator’s view was that the Appellant could not renege from the settlement agreement freely and mutually entered into by the parties.  I can find no fault with his findings.

The second ground of appeal is directed at the 2nd Respondent.  The Appellant cited Mr Mumanikidzwa in his capacity as the Director of the 1st Respondent.  The allegation by the Appellant is that it was Mr Mumanikidzwa who misdirected the funds and therefore he should meet the 1st Respondent’s statutory obligations towards them.  The 2nd Respondent has clearly been improperly cited in these proceedings.  It is a well-established principle that a company has separate corporate personality from its Directors and other officers. The court is on very limited occasions allowed to pierce the corporate veil. The court may ‘lift the veil’ in circumstances where there is fraud or manifest injustice see Mkombachoto vs. Commercial Bank of Zimbabwe Ltd. 2002 (1) ZLR 21 (H).  The Appellants have not justified why the court should in this case pierce the veil. The Appellants only made bold allegations of misappropriation of funds by Mr Mumanikidzwa which have not been substantiated before the court. The Arbitrator correctly observed in his award that Mr Mumanikidzwa had been improperly cited in the proceedings. The ground clearly stands to be dismissed.

The Appellant in their third ground of appeal allege that the process of liquidation was never followed.  The 1st Respondent was otherwise hiding behind the purported liquidation to effect an unlawful retrenchment.  Once again there has just been bald averment by the Appellants with no substantiation.  The Appellants before the Arbitrator did not challenge the issue as to whether or not 1st Respondent was liquidated or went through involuntary winding.  If indeed the Appellants had serious misgivings as to whether the company had been liquidated these should have been raised before the Arbitrator. Sitting as an appeal court the Labour Court cannot resolve the dispute at this stage of proceeding.

In the fourth ground of appeal the Appellant deny signing the settlement document where the parties agreed to mutually terminate.  The record of proceedings before the Arbitrator show that the 1st Respondent produced a settlement agreement dated 15 January 2011 which the Arbitrator duly accepted as proof of settlement reached between the parties.  According to the record of proceeding in the agreement the Appellants acknowledged receipt of certain amounts including notice – pay. The Appellants also accepted that upon payment of funds no further claims would arise against first Respondent. The Appellants in my view conveniently deny the existence of the settlement agreement in order to bolster their new claims before the Labour Court.  Appeals in Labour Court being appeals on the record the Court is bound by what is contained within the four corners of the record. I therefore dismiss the ground of appeal.

The final ground of appeal before Court attacks the Arbitrator personally.  The Appellants allege bias or impropriety on the part of the Arbitrator.  They allege that after proceedings the Arbitrator had advised them to present quantified claims. He however thereafter proceeded to hand down an award dismissing all their claims.  The allegation of bias or impropriety on the part of the Arbitrator has not been substantiated in Appellants papers. That suggestion is also baseless in the face of the Arbitrator’s very clear and well-reasoned judgment.  The Arbitrator did not find merit in Appellant’s claims.  He consequently dismissed their claims.  How he could  have then asked the Appellant to submit quantified claims against that background is baffling to the mind. The last ground is clearly without merit.

The appeal clearly stands to be dismissed for lack of merit.

Nyika Legal Practitioners, for respondent