Tererai Maraidza v Lytton Investments

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/736/14
HELD AT HARARE 25TH SEPTEMBER 2014
CASE NO
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IN THE LABOUR COURT OF ZIMBABWE	      JUDGMENT NO LC/H/736/14

HELD AT HARARE  25TH SEPTEMBER 2014		CASE NO LC/H/376/14

& 7TH NOVEMBER 2014

In the matter between:-

TERERAI MARAIDZA				Applicant

And

LYTTON INVESTMENTS				Respondent

Before The Honourable E Muchawa, Judge

Applicant			In person

For Respondent		K Chirenje (Legal Practitioner)

MUCHAWA, J:

This is an appeal against an arbitral award which found that appellant was not owed any salaries or terminal benefits by respondent upon termination of employment.

Appellant  was employed by respondent on the 6 April 2009 as the General Manager (Bulawayo) and relocated from Harare to Bulawayo with his family.  In December 2010, appellant once against relocated to Harare.  Appellant resigned on 29 June 2012 by giving three months notice.

The terms of appellant’s contract as contained in an addendum are reproduced below

“Addendum – General Manager (Bulawayo)

Package

Your annual salary is circa $39 200 paid as follows:-

$18 00 basic annual paid at $1500 per month

$21 200 performance related increments paid quarterly

Annual bonus of up to 100% of the basic salary for exceedingly annual targets by 30% up to a maximum of $39 200 per annum

1% of net earnings above 30% of set targets

Relocation assistance to Bulawayo

Eligible for a secured housing loan of up to $70 000 payable after 12 months of service

$500 sundry allowance paid quarterly

Company car and fuel  allowance of 200 litres per month

Executive medical aid

Eligibility for paid annual vacation up to $1000.00 based on performance

Gym allowance up to $30 per month.”

When appellant returned to Harare he stayed in a property in Mount

Pleasant which was held under lease by respondent.  It seems too that appellant lost the use of the official company vehicle in February 2012 when it developed a fault.  No replacement was given until appellant left respondent company.

The lengthy appeal grounds before me raise the following issues for my determination,

Whether or not appellant is owed arrear salaries and fringe benefits.

Whether or not appellant is entitled to the performance related salaries and benefits on the basis of having successfully completed the three months probation period.

Whether or not the respondent was entitled to deduct US$16 200.00 rent for 18 months in retrospect from appellant’s terminal benefits.

Whether or not the relocation from Bulawayo to Harare was consensual.

Whether or not the respondent was entitled to deduct US$21 660 pertaining to an alleged accident claim.

Terminal benefits

The appeal is opposed.

At the hearing I dismissed the two points in limine that were raised.  I

found that the appellant had timeously filed his appeal.  I also found that the appeal raises questions of law even though it relates to the facts as it is alleged that such factual findings are so unreasonable that no sensible person who applied his mind to the facts would have arrived at such a decision.  (Reserve Bank of Zimbabwe v Corrine Granger & Anor SC 34-01).

I now proceed to deal with the appeal on the merits for which my judgment was reserved.  I however wish to point out that I will restrict myself to the grounds of appeal before me.  I say so because I realize that appellant, who was a self actor included extraneous issues in his submissions before me.  He made lengthy submissions regarding constructive dismissal.  That was never one of the terms of reference of the arbitrator, nor is it one of the grounds of appeal.  For purposes of clarity, the terms of reference of the arbitrator were;

Whether or not the claimant is owed outstanding salaries and if so determine the quantum thereof

Whether or not the claimant is owed terminal benefits and if so determine the quantum thereof.

Issue 1 Arrear Salaries and Fringe Benefits

Basic Salary

Appellant’s case is that the payment of the basic $1500.00 per month became erratic from January 2011.  He produced a detailed schedule showing  the amounts received from January 2011 to June 2012 totalling  $9606.00.  This reflects a shortfall of $17 394.00.

In a document tendered by respondent entitled “Computation of dues” and marked annexure “M”, respondent admits that a total salary of $27 000 was due from January 2011 to 30 June 2012.

With such evidence before him, I find that the arbitrator grossly erred, in failing to find that appellant was indeed owed arrear salaries totalling $17 394.00 in basic salary.

Sundry Allowance

Appellant claims $3000 being sundry allowances based on the terms of his contract over the whole period of his employment from January 2011 to September 2012.  He alleges that he received only $500.00.

Respondent admits that $3500 was due to appellant in its computation of dues.

I find therefore that the failure to consider such evidence was a gross error.  Appellant is entitled to $3000 as sundry allowances.

Gym Allowance

Appellant claims a total of $630.00 as gym allowance based on the $30.00 per month entitlement.

Respondent admits to this entitlement at the rate claimed but only up to June 2012 excluding the notice period up to end of September.

The arbitrator chose to ignore the terms of the contract of employment which clearly entitle appellant to $30.00 per month and concludes that appellant should have attended at some gym.  This, in my opinion is a serious flaw as the contract should be the basic document to use in computation of arrear salaries and benefits.

I find therefore that appellant is entitled to a gym allowance of $630.00 as the notice period constitutes appellant’s period of employment too.

Company Car and Fuel Allowance

Appellant claims fuel allowance of $200 litres per month for the period

1 March 2012 to 30 September 2012.  He uses the rate of $1.35 per litre and this comes to $1 890.00.

Respondent states that appellant can only get 80 litres per month at the rate of $1.35 per litre as the balance of 120 litres per month is not due as appellant was not using the vehicle to do respondent’s business.  In addition, respondent offers to pay up to June 2012 instead of 30 September 2012.

My finding is that outside of the contractual entitlement of 200 litres per month, there was no evidence placed before the arbitrator to justify a reduced amount at the rate proposed by respondent.  I have already found too that the period of employment extended to 30 September 2012.  The e-mail giving notice of resignation stated that resignation was to be with effect from 1 January 2012.  Respondent replied on the same date accepting this resignation on these terms.

I therefore find that appellant is entitled to the fuel allowance at the claimed amount  of $1 890.00.

As there is not specific claim for the company car, there is no basis to award anything.

Executive Medical Aid

Appellant is claiming a medical aid allowance from January 2011 to 30 September 2012 in terms of his contract of employment at the rate of $273 over a twenty one month period.  The total comes to $5 733.

Respondent’s computations indicate that the correct rate is $90 per month and he has calculated this up to June 2012.

The arbitrator does not seem to have dealt with this issue at all in his award.

The offer of employment letter states that 18.2% of appellant’s gross salary would be contributed towards his medical aid.  This amounts to $273.00 per month.

I find however that such amount was payable to the Medical Aid Company and not to appellant.  A mere allegation of inconvenience without proof of the prejudice suffered, disables me from awarding this amount to appellant as claimed.  The same applies to NSSA claims.

Issue 2 – Whether appellant is entitled to the performance related salaries and benefits

Appellant argues that he was entitled to payment of the full salary.  The package document states that $21.200 of the $39.200.00 annual salary would be performance related increments paid quarterly.

Further, a claim is put in for an annual bonus of up to 100% of the basic salary for exceeding targets by 30% up to a maximum of $39.200 per annum.

There is another claim for annual increments of at least 10% based on section 6 of the employment contract.  This states that such increments may be awarded at the discretion of the directors, dependant on performance of the company and individual.

It is argued too that appellant is entitled to paid annual vacation up to $1000.00.  This too is based on performance.  The same applies to a claim for 1% net earnings for meeting above 30% of targets.

In support of his claims, appellant argues that he tendered his service, made himself available and passed probation, therefore he performed and should get the performance related salaries and benefits.

I believe appellant’s reliance on the case of Commercial Careers College (1989 (1) ZLR 344 is inappropriate in casu.  It deals with a situation where reinstatement as remedy is discussed and the arising obligations of each of the parties.

Equally misplaced too is the argument that once one passes probation and is assessed suitable for a post, then they have fulfilled the requirement for on going performance related assessments.

No evidence of any performance related assessments was placed before the arbitrator.   It is only in the e-mail in which respondent accepts the notice of resignation, that the Managing Director makes reference to the poor performance of appellant’s division.

I have to find in favour of respondent that there was no evidence on which to award performance related salaries and benefits particularly where such depended on the discretion of the directors.

Issue 3 and 5 Deductions from appellant’s entitlements

The arbitrator makes a finding that appellant owed respondent an amount of $22 064.92 being the balance of various deductions against the amount of $38 907 computed as due to appellant.  The total deductions are $60 971.92.  In this the arbitrator simply takes respondent’s submissions as his finding.

The Rent deduction

A rent deduction of $16 200 is made contrary to the evidence before the tribunal.  It is clear that appellant was staying in a house which was being leased to the respondent.  The lease agreement lays out the rent payable in section 3 and forbids subletting.

There is no evidence, except respondent’s say – so, that appellant agreed to a retrospective levying of a $900.00 rental.

In any event section 13 (2) of the Labour Act prohibits the withholding of any wages or benefits without the consent of the  Minister whiles section 12 A (6) of the same prohibits deductions and set off except in specified circumstances.  The current ones do not qualify.  I find in favour of appellant that the arbitrator exceeded his terms of reference and the law in ordering that a deduction in relation to rent, be levied against appellant’s wages and benefits.

Accident Claim

On this the arbitrator went along respondent’s submissions by finding that $21 660 be levied in respect to an accident claim to a Toyota Land Cruiser.

Appellant argues that the arbitrator exceeded his terms of reference and that such cases are handled in other courts which assess delictual damages.  It is pointed out too that the claim for an accident, coming 18 months later should be treated as suspicious and that there is no causal connection between appellant and the accident.

The deduction is also said to be contrary to sections 12 A (6) (b) of the Labour Act and section 13 (2) of the same Act.

I find therefore that there was no legal basis to find that a deduction of $21 660 be levied.

Issue 4 Relocation

Respondent’s claim that relocation costs had come to $2 100 and would be deducted against appellant’s claim was upheld by the arbitrator.

I find in favour of respondent that there was no legal basis for this.  Evidence was produced of the cost of removal being only $598 through Biddulphs and such relocation expenses are included in the contract of employment as a benefits.  There is no basis for the deduction.

The question of whether or not the relocation was consensual did not arise before the arbitrator and has no bearing on the terms of reference.  I will therefore not consider it.

Housing Loan

Appellant made submissions in support of a secured housing loan of up to $70 000 payable after twelve months of service.

This was opposed.

I find that as no such loan was applied for and approved, during the period of employment, there is no basis to award same.

Acting Role as Group Human Resources Manager

Appellant claims not to have been paid for the extra responsibility he played as human resources manager from 1 January 2011 to 11 July 2012.

No evidence was provided of what the claim would be for this.

Respondent argued that as general manager, appellant would obviously deal with human resources issues.

In the circumstances I find no merit in appellant’s argument.

Issue 6  - Terminal benefits

Appellant claims terminal benefits of 3 months notice pay and 69 days as cash in lieu of leave.  The three months notice pay comes to $4 500.00 whilst the cash in lieu of leave amounts to $4 312.50.

Respondent claims the cash in lieu of notice is $613.63 being up to

11 July 2012 and that the cash in lieu of leave is only for 48 days and comes to $3 272.72.

I already found that appellant gave three months’ notice which was accepted.  He is therefore entitled to $4 500 as cash in lieu of notice.

The payslip on file does not reflect the leave days due as at June 2012 as stated by either of the parties.

I am inclined to go with appellant’s claim as he made submissions that discredit the supplied payslip in respect to other aspects such as payment of NSSA dues.

I therefore find that appellant is owed cash in lieu of leave for 69 working days totalling $4 312.00.

Accordingly the appeal succeeds with costs.  The arbitral award of W.T. Pasipanodya of 20 December 2013 be and is hereby set aside and substituted as follows;

“Respondent be and is hereby ordered to pay claimant (appellant in casu) outstanding salaries, benefits and terminal benefits in the total amount of

$31 726.00 being made up as follows

Basic salary arrears			$17 394.00

Sundry allowance				     3 000.00

Gym allowance				         630.00

Fuel allowance				     1 890.00

Notice pay					      4 500.00

Cash in lieu of leave			      4 312.00

Total						$31 726.00”

K Chirenje Attorneys, respondent’s legal practitioners