UNKNOWN (parties not clearly identified in case name format)

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/13/24
HELD AT HARARE 16
CASE NO.
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Before Honourable mr. Justice L.M. Murasi

For Applicant	Mr. J. Mambara

For Respondent	Ms. T. Sibanda MURASI J.,

Facts of the case

This is an application for quantification of damages in which the Applicant is seeking the total sum of USD $1 446 738, 75 as salaries and back pay in lieu of reinstatement for a period running from July 2016 to January 2023. The Applicant is also claiming punitive damages on the Respondent in the sum of USD $624 000 in addition to pension and medical aid. The Respondent is of the view that the amounts claimed by the Applicant are absurd and totally unwarranted given the fact that the Applicant found alternative employment from March 2018 to August 2021.It also averred that Statutory Instrument 33/2019 must apply in the payment of the damages though this position is contested by the Applicant.

Background to the case

The Applicant was employed as Head of ICT by Marange Resources (Pvt) (Ltd) from 2014 to February 2016.After an initiative from the government to have all diamond companies under one company, Marange Resources was joined to the Zimbabwe

Consolidated Diamond Company which in turn then absorbed all of Marange’s employees. The Applicant effectively began to work for ZCDC on 1 March 2016 as can be evidenced by the payslips. Her last payslip from Marange Resources was February 2016 and the ones from ZCDC start in March 2016. Under Marange Resources, the Applicant was getting paid a gross salary of USD $10 124, 00 per month. After the change to ZCDC, she was getting paid a gross salary of USD $10 400, 00 per month.

On 5 July 2016, ZCDC offered the Applicant a new contract of employment which was a fixed term contract of six months and less pay. The Applicant raised these queries as she had been under permanent employment at Marange Resources and refused to affix her signature to the document until she had received clarifications. She was then verbally dismissed on the spot on 15 July 2016 by the Chief Executive Officer and ordered to pack her belongings and leave the premises. Her company vehicle was also confiscated in the altercation.

The Labour Officer seized with the matter found that the Applicant was unfairly dismissed from employment and that the Respondent should reinstate her, failure of which they were to pay damages in lieu of reinstatement. The Labour Court sitting at Mutare on 18 January 2023 confirmed the Labour Officer’s draft ruling. The court now has to determine quantification of damages as both parties have not reached a consensus.

Submissions by the Parties

Mr. Mambara submitted that most of the issues were covered in the Founding Affidavit. He stated that Applicant’s contract of employment was repudiated by the Respondent and Applicant was entitled to damages in lieu of reinstatement up to the date the order was made which was up to January 2023. He further stated that Applicant was later engaged by Twenty Third Century Systems for a period of three years. However Applicant had not submitted the contract of employment but had only filed a confirmation note from that employer. He submitted that this was part-time employment.

Mr. Mambara further submitted that Applicant last a salary of $10 400-00 with the Respondent and that is the amount Applicant had used in making her calculations. He

further argued that the sums of money earned during her employment with Twenty Third Century Systems had been deducted from the full claim to avoid ‘double- dipping’. He stated that the claim for cash in lieu of leave was at page 208 of the record and that Applicant had also claimed bonus payments as it was customary for the Respondent to pay such payments. Mr. Mambara also argued that Applicant was entitled to the loss of the use of a motor vehicle and that on page 210 of the record Applicant was claiming 200 litres of fuel which was her monthly entitlement. He also submitted that Applicant was entitled to notice pay and professional membership for the period in question. Mr. Mambara indicated Applicant had the right of first refusal to purchase the motor vehicle which she was using during the course of her employment with the Respondent. Medical aid cover was one of the claims which was part of the damages claimed by the Applicant.

In response, Ms. Sibanda stated Applicant had found alternative employment in 2018 and thus was only entitled to damages up to the time she got employed by Twenty Third Century Systems. She argued that this was the case even if the salary she was earning was less than what she was earning with the Respondent. She submitted that the law did not support the claim made by the Applicant. Ms. Sibanda further submitted that the payment of the bonus was not contractual and thus Applicant was not entitled to make such a claim.

Ms. Sibanda also stated that the coming into force of Statutory Instrument 33 of 2019 changed the complexion of what the currency should be such applications, which arose prior to February 2019 were taken into account.

Legal Issues rising

What are damages in lieu of reinstatement? What purpose do they serve? What is the method of calculating damages?

What may be considered a reasonable period in which the damages may apply?

The Law

Where an employee has been unfairly dismissed and the court considers reinstatement as the more appropriate remedy and grants it, the employer must still

be given the option to pay damages in lieu of reinstatement. Thus damages in this context are awarded as an alternative and are not the primary remedy.

Reinstatement has been defined as a remedy which is used to place an unfairly dismissed employee into a position he would have been had the unfair dismissal not been committed. See John Grogan Workplace Law 11th Ed p199. In the case of Chegutu Municipality v Manyora 1996 (1) ZLR 262 (S), McNally JA defined reinstatement as follows:

“In other words, to reinstate a person means in effect to put a person again into his or her former job. That can only be done in the present or the future. Not in the past. The past is covered, where necessary, by an order for back pay and compensation…I conclude, therefore, that ‘reinstatement’ in the employment context means no more than putting a person again into his previous job. You cannot put him back into his job yesterday or last year. You can only do it with immediate effect or from some future date. You can, however, remedy the effect of previous injustice by awarding back pay and/or compensation. But mere reinstatement does not necessarily imply that back pay and/or compensation automatically follows.”

The question which therefore arises is whether there is a difference in the assessment of ‘damages that are awarded as a primary remedy’ and ‘damages in lieu of reinstatement’. In Gauntlet Security Services (Pvt) Ltd v Leonard 1997 (1) ZLR 583

at page 586 C-E, Gubbay CJ denoted what may be taken into consideration in the assessment of damages as:

“The employee is entitled to be awarded the amount of wages or salary he would have earned save for the premature termination of his contract by the employer. He may also be compensated for the loss of any benefit to which he was contractually entitled and of which he was deprived in consequence of the breach. But the employee must mitigate his loss. He must look for and accept any reasonable offer of alternative employment. He cannot just do nothing…If he fails to take other employment when it would have been reasonable to do so, a deduction will be made in respect of the remuneration he would have earned from the substituted employment.”

The calculation of damages must be done in terms of the common law. This was elucidated in the case of Leopard Rock Hotel Co (Pvt) Ltd v van Beek 2000 (1) ZLR 251 (S) at 255 C. Whether damages are awarded as the sole primary remedy or as an alternative to reinstatement, the applicable principles for their assessment remain the same. Damages in lieu of reinstatement are not meant to put the employee in the position he or she would have occupied had the employer opted for reinstatement. Damages are meant to put the innocent party in the position he would have occupied had the contract been performed, so far as that can be done by the payment of money, and without undue hardship to the defaulting party. See Victoria Falls &Transvaal Co Ltd v Consolidated Langlaagte Mines Ltd 1915 AD 1 at 22. There is no basis for the suggestion that the quantum of damages awarded as an alternative to reinstatement must necessarily be higher than where damages are awarded as the only appropriate remedy. See Lovemore Madhuku Labour Law in Zimbabwe 2015 at page 265.

In quantifying the damages, it is necessary to take into account the mitigation of loss. The duty of the employee to mitigate his loss was emphasized by McNally JA in Ambali v Bata Shoe Co Ltd 1999(1) 417 (S) at pp 418G-419A as:

“I think it is important that this court should make it clear, once and for all, that an employee who considers, whether rightly or wrongly, that he has been unjustly dismissed, is not entitled to sit around and do nothing. He must look for alternative employment. If he does not, his damages will be reduced. He will be compensated only for the period between his wrongful dismissal and the date when he could reasonably have been expected to find alternative employment.”

The mitigation need not be only employment-rated. It can be informal as shown in Olivine Industries (Pvt) Ltd v Nharara 2006 (1) ZLR 203 (S) where money earned repairing cell phones and selling tomatoes was a proper consideration for mitigation and had to be taken into account. The method that can thus be used to determine the quantum of damages in lieu of reinstatement can be said to be: Actual loss suffered less any sum earned or that could have been reasonably earned. See Myers v Abrahamson 1952 (3) SA 121 (C) at 127 C-E.

In determining the quantum of damages, it is also trite to delve into the issue of back pay. McNally JA dealt with this issue in Leopard Rock Hotel Co (supra) at 254H- 256A wherein he said:

“…it seems to me that ‘back pay’ and ‘damages’ are indeed different concepts, but only in the sense that ‘damages’ is a wider concept. It will normally include back pay, but may include, for example, compensation for loss of promotion prospects, interest, and other elements…’Back pay’ is thus a concept associated with reinstatement. If an employee is reinstated she will normally be awarded back pay. If she succeeds in proving wrongful dismissal, but is not reinstated, she will be entitled to ‘damages’, a major element of which will be back pay. Perhaps, more correctly, one should say the damages should be assessed by reference to the back pay lost. But here the back pay will be limited to a period from the date of wrongful dismissal to a date by which she could, with reasonable diligence, have obtained alternative employment.”

Back pay is thus dependent on the duty of mitigation that the employee has. This means that back pay will be reduced by any amount earned or which could have been reasonably earned between the date of the dismissal and that of the reinstatement.

Statutory Instrument 33/2019 provides that all assets, liabilities valued and expressed in the United States dollar on and before the effective date (19 February 2019) shall on and after the effective date be deemed to be values in RTGS dollars at a rate of one to one to the United States dollar. This position also applied to judgment debts that were finalised before and on the effective date as elucidated by Malaba CJ in the case of Zambezi Gas v N R Barber SC 3/2020.

Application

Before dealing with the quantification, it is trite to address the Respondent’s view that SI 33/19 applies in the current circumstances. The Statute only applies to the value of assets and liabilities that were expressed in United States dollars before or on the effective date. It is common cause that the Applicant was wrongfully dismissed from employment in July 2016 but the ruling of the labour officer was only confirmed by this court in January 2023. The Labour officer’s draft ruling was dated 18 October 2022. This is evidently after the effective date which governs Statutory Instrument 33/2019.

After reading the case of Ingalulu Investments (Private) Limited & Another v National Railways of Zimbabwe & Another SC 42/2022, wherein the Supreme Court found that all judgment debts valued in US dollars finalised after the effective date were to be paid in US dollar or its equivalent at the interbank rate. This court is therefore of the view that SI 33/19 does not apply in these circumstances. Whatever value may be placed on the damages may be payable in United States dollars or the equivalent at the prevailing interbank rate.

Quantification

Applicant did not disclose to the Labour Officer when she instituted proceedings that she had found alternative employment with Twenty Third Century Systems. This was also not disclosed during confirmation proceedings. Mr. Mambara stated that his client had not given him such information. The following exchange took place during submissions:

“Court: Did your client inform you that she was employed from 2018?

A: No, she told me of this employment when we were dealing with quantification proceedings.”

It is trite that a litigant has to disclose all necessary information and take the Court into his/her confidence. It was essential that this information be made available to the Court. In Nehanda Housing Co-operative Society and Other vs Moyo and Others HH 987/15, MAFUSIRE J had this to say:

“In my view, a party that conceals material information must be unworthy of the protection or assistance of the court. If you seek relief, you must take the court into your confidence, laying bare all the relevant facts on the matter, even those that you may perceive to be adverse to the relief that you seek..

Failure to disclose material facts disentitles the applicant to the relief which seeks, or disentitles him to keep the one he had already obtained.”

Applicant, in casu, obtained alternative employment in 2018, which is two years after her dismissal. It was crucial that this information be availed when her matter was deliberated by the Labour Officer. It was even more crucial to disclose such information during confirmation proceedings as the latter proceedings would result in

an order which was capable of execution. The disclosure certainly had a bearing on the quantum of damages which were available to the Applicant. The calculation of damages would be based on such information. Mr. Mambara was unable to submit the contract of employment between the Applicant and Twenty Third Century Systems. It was averred that the employment was on a temporary basis. However there is no evidence to support this. The evidence tendered by the Applicant in this regard shows that a document was availed by Twenty Third Century stating that Applicant was its employee in the capacity of Service Delivery Manager from 1st March 2018 to 31st August 2021. The document does not reveal that it was temporary employment and in any event the period itself militates against making a finding that this was temporary employment.

It is not disputed that the Applicant found alternative employment running from March 2018 to August 2021 being employed by Twenty Third Century Systems. The document submitted by the Applicant shows that Applicant was earning a salary of

$1000-00. No Payslip was attached. As already observed above, no contract of employment was attached. Even though it was not disputed by the Respondent, a Court has to be satisfied that the figure is correct. The document is not in Affidavit form. The document’s probative value is thus diminished. The Applicant alleges that this was part time employment but it should be noted that this is of no relevance to mitigation of loss as articulated in the Oliver Industries (Pvt) Ltd v Nharara case (supra).

The Applicant is claiming damages from the Respondent from July 2016 to January 2023.This includes the period where she was working at Twenty Third Century Systems. This position was dealt with in Nyaguse v Mkwasine Estates (Pvt) Ltd 2000 (1) ZLR 571 (S) wherein the court held that:

“The point must be made that the Act is intended as a practical solution to labour problems. True, it is intended to favour workers, but not to the extent that they should be paid twice for the same period of work…Equitably, if someone has to lose, it has to be the employer, who was in the wrong. But if the employee manages to find other work which pays just as well, why punish the employer and over-compensate the employee? We are not dealing with punitive damages.”

If a dismissed employee gets a new but lower paying job, damages are still assessed for the reasonable period (my emphasis), which may include the time the employee was already earning from the new job. The question of damages will be the difference between the earnings from the new job and what the employee would have earned from the old job. See Lovemore Madhuku (supra) at page 262. This court agrees with the said position and that the Applicant can only be paid by the Respondent for a reasonable period and not the whole period where she was employed by Twenty Third Century Systems.

The court in calculating the damages will therefore use the following method:

Actual loss suffered less any sum earned or that could reasonably have been earned. Period without employment:

July –December 2016 = 6 months

Whole of 2017 =12 months

January-February 2018= 2 months Total months unemployed =20 months

Henceforth, the Respondent shall pay damages in lieu of reinstatement for a period of 20 months.

Back pay owed by the Respondent is USD $10 400, 00 multiplied by the total number of months unemployed.

Total owed in back pay would be USD $208 000, 00.

Fuel at 200 litres per month for 20 months which can be paid either as the fuel itself or the equivalent on date of payment.

Applicant is also entitled to notice pay in the sum of USD$31200-00.

Cash in lieu of leave can only be claimed up to 2018 and according the Applicant’s claim, this amounts to USD$13 706-34.

It is important to note that if payment of a bonus is at the discretion of the employer, it is not an entitlement to be included in the assessment of damages. See ZUPCO V

Diason 2002 (2) ZLR 628 (S).The Applicant cannot thus force the employer to pay her a bonus. In the assessment of damages, the bonus shall be excluded.

The Applicant is also seeking damages to include the contractual right of first refusal at 20% of the net book value of the vehicle she was using. However, the court is of the view that this does not apply to employees who have been dismissed from employment (including those wrongfully dismissed). It is a benefit accruing to employees whose employment contracts have not been arbitrarily terminated.

It is also evident that payments for medical aid and professional clubs are made to the respective organisations and not to the employee. These are therefore dismissed.

When it comes to the arrear fees the Applicant is seeking from Marange Resources, this court takes the view that the Applicant should have approached Marange Resources directly and sought redress. Should she have failed to obtain redress from the company, then the Applicant can make use of the court and obtain justice.

Conclusion

It is therefore ordered that:

The Respondent shall pay to the Applicant the amount of USD $208 000-00 or the equivalent amount at the prevailing official rate of exchange on the date of payment being the salary and benefits due to the Applicant.

Applicant shall be paid Notice Pay in the sum of USD$31 200-00 or the equivalent amount at the prevailing official rate of exchange on the date of payment.

Applicant shall be paid the sum of USD$13 706-34 or the equivalent amount at the prevailing official rate of exchange on the date of payment as cash in lieu of leave.

Respondent shall also pay to Applicant 4000 litres of fuel or its equivalent on the date of payment.

The above payments shall be made within 30 days from the date of this Order.

Respondent to meet Applicant’s costs.

J. Mambara and Partners-	Applicant’s legal practitioners Caleb Mucheche and Partners-	Respondent’s legal practitioners