Zimbabwe Energy Regulatory Authority (ZERA) v Peter Mufunda

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/644/2014
HARARE, 08 & 26 SEPTEMBER 2014
CASE
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IN THE LABOUR COURT OF ZIMBABWE	                 JUDGMENT NO. LC/H/644/2014

HARARE, 08 & 26 SEPTEMBER 2014		           	         CASE NO. LC/H/243/14

In the matter between:-

ZIMBABWE ENERGY REGULATORY 				Appellant

AUTHORITY (ZERA)

And

PETER MUFUNDA							Respondent

Before The Honorable F.C. Maxwell, Judge

For Appellant		A. Moyo (Legal Practitioner)

For Respondent		G.T. Mharapara (Legal Practitioner)

MAXWELL, J:

Respondent is the Legal Advisor in the Ministry of Energy and Power Development (the Ministry).  Between 20 October 2009 and the end of February 2012 he was seconded to the Zimbabwe Electricity Regulatory Commission (ZERC).  During the period of Secondment he was remunerated by the then Public Service Commission.  Respondent also received an allowance of $500 for his work at ZERC.

After the amendment of the Energy Act [Chapter 13:19] by the Parliament of Zimbabwe, ZERC was dissolved to pave way for the establishment of an all encompassing energy regulatory Commission.  Respondent was seconded to administer ZERA’s affairs in the interim.  The all encompassing energy regulatory commission, the Zimbabwe Energy Regulatory Authority (ZERA) started operations on the 1st September 2011.  On 17 November 2011 the Permanent Secretary in the Ministry wrote to the Minister of Energy and Power Development (the Minister) requesting that Respondent be re-called from the assignment as ZERA was now operational.  On 28 November 2011 the chairman of ZERA wrote to the Minister requesting for the extension of the Respondent’s mandate to facilitate recruitment of staff and to carry out the general administrative functions ordinarily undertaken by the Chief Executive Officer.  On 1st December 2011 the request was granted and Respondent’s mandate was extended to 28 February 2012.  After a Chief Executive Officer for ZERA was employed, Respondent was advised to revert back to his post in the Ministry.

On 28 November 2012 Respondent referred a claim for salary and benefits against Appellant to the Ministry of Labour and Social Services (page 51 of record).  Respondent claimed salary and benefits for 28 months and 11 days totalling $977 910.55.  He alleged that he was fully employed by the Appellant but was never paid as he should have been.  On 2nd September 2013 a certificate of no settlement was issued.  And the matter was referred to arbitration.  The Terms of Reference were

Whether or not the matter had been properly referred to a Labour Officer in terms of the enabling law namely section 93 of the Labour Act.

Whether or not there was a valid contract of employment between the complainant and ZERA.

Whether or not claimant is owed any arrear salaries and benefits and the quantum thereof.

The arbitrator went on to find that a valid contractual relationship existed between the parties.  He ordered the parties to quantify the award, failure of which they would revert to him for quantification.

On 18 March 2014 Appellant noted this appeal.  The grounds of appeal are

The arbitrator erred and misdirected himself in law in failing to find that:

The alleged dispute had prescribed in accordance with the provisions of section 94 of the Labour Act [Chapter 28:01].

Consequently the Labour Officer and by extension the Arbitrator had no jurisdiction on the matter.

The arbitrator erred and misdirected himself in law in failing to find that the Labour Officer had lost jurisdiction on the matter and consequently the purported referral of the matter to the arbitrator was and is a legal nullity.

The arbitrator erred and misdirected himself in law in finding as he did or must be taken to have done that Respondent was contemporaneously employed by ZERC.

Having unilaterally decided to dispose of the matter on the papers, the Arbitrator erred and misdirected himself in law in then purporting to refer the matter back to the parties allegedly for quantification of his award.

In response Respondent asserted that the dispute had not prescribed and consequently the Labour Officer had not lost jurisdiction on the matter when he referred it to the arbitrator in terms of section 93 (1) (3). He also argued that the arbitrator did not misdirect himself in law in saying the Respondent was an employee of the Appellant as the Appellant never pointed out a law that says the holding of two positions by the Respondent was illegal in terms of the Labour Act or any other law in Zimbabwe.  Respondent also argued that the Arbitrator did not unilaterally decide to dispose of the matter on the papers.  He alleges that the parties agreed before the Arbitrator that the matter be decided on the papers and that any decision otherwise would be communicated to him as a common position of the parties.  Further that the arbitrator did not misdirect himself in law in referring the matter back to the parties for quantification of his award.

In heads of argument, Appellant addressed issue of

non-compliance with the rules of this court by the Respondent in that Respondent filed the response out of time,

Prescription and consequently the impropriety of the Labour Officer and arbitrator dealing with the matter, and

The non-existence of a contract of employment between the parties.

Respondent on the other hand denied that the matter had prescribed.  He also submitted that the prescription had been interrupted by the admission by the Appellant’s principal proof of which was Annexure 3 in Respondent’s replication in the Arbitrator’s tribunal.  Respondent further submitted that he was appointed to ZERC and his term was extended by ZERA.  In his view, the essentials of a contract and the provisions of the Labour Act satisfy the employer/employee relationship between Appellant and himself.  Respondent also further submitted that after his secondment which was fulltime, he was now an independent contractor to his employer and any work he did for the employer did not vitiate his contract with Appellant.

At the hearing of the matter Appellant indicated that it was abandoning challenges to procedural and technical issues and proposed that the matter be dealt with on the merits.  The result was that two issues remain for decision; that is,

Whether or not by the time the claim was referred to conciliation it had prescribed, and

Whether or not there existed a contract of employment between the Appellant’s predecessor and subsequently the Appellant and the Respondent, entitling Respondent to claim for salary and benefits for the period he was on secondment.

I will proceed to deal with the issues seriatim.

PRESCRIPTION

Appellant submitted that the dispute arose on the date of the employment of Respondent, in October 2009.  The basis of the submission was further explained to the effect that once a person is employed he is entitled to salary and benefits.  Once those are not paid the cause of action immediately arises.  In casu it was submitted that the cause of action arose on 20 October 2009.  Appellant submitted that the claim was filed 3 years from the date the Respondent must be deemed to know of his rights.  It was further submitted that consequently the Labour Officer had no jurisdiction and by extension the arbitrator.

Respondent on the other had argued that he ought to be seen to have known that there is an unfair labour practice in December 2010 when the Permanent Secretary in the Ministry clearly mentioned that they would not pay him any remuneration and asked him to learn to work for free.  Respondent submitted that the letter of February 2011 was an interruption of the prescription period as it confirmed that Respondent was owed certain amounts of money backdated.  He submitted that therefore prescription started to run afresh from February 2011. I am not convinced by the Appellant’s argument.  There is no proof that on engagement Respondent knew that he would not be remunerated for the services rendered.  In his heads of argument Respondent states that on appointment he was advised that “the secondment was being processed by his principals …” (para 3.2).  In my view the relevant date is December 2010 when Respondent alleges that he was advised to learn to work for nothing (para 3.5 of Respondent’s heads of argument).  The cause of action therefore arose in December 2010 when Respondent became aware that he was not going to be remunerated as he had requested.  On that basis therefore the dispute should have been referred to conciliation by December 2012.  The dispute was referred on 28 November 2012.  On that basis the Appellant’s argument is not correct that the Labour Officer and consequently the arbitrator had no jurisdiction to deal with the matter.

WHETHER OR NOT THERE EXISTED A CONTRACT OF EMPLOYMENT BETWEEN THE APPELLANT’S PREDECESSOR AND SUBSEQUENTLY THE APPELLANT AND THE RESPONDENT

The arbitrator found that there existed a contract of employment between the parties.  The basis of his finding was

Respondent was given tasks to do, was remunerated and accountable (page 21 of record).

The extension of the Respondent’s mandate to 28 February 2012 “goes a long way in the existence of a contract of employment between claimant and Respondent” (page 22 of record).

Page 51 contains the Application for conciliation written to the Principal Labour Officer on behalf of the Respondent.  Therein it is stated;

“Applicant was seconded to the Respondent by the Ministry of Energy and Power Development and was entitled to a better contract with salary and benefits” (Underlining for emphasis)

The claim by the Respondent doesn’t go as far as saying he had a better contract but was entitled to one.  Entitlement and actually having what one is entitled to are two different things.  What is common cause is that Respondent was on secondment.  The dispute is on what that secondment entailed.

The parties are agreed that Section 14 of the Public Service Regulations SI 1/2000 permits secondment of Civil Servants.  Appellant submitted that such secondment did not create a new contract of employment.  Respondent on the other hand places reliance on the provisions of section 14 (2) of SI 1/2000 which states;

“The terms and conditions of service of a member while on secondment shall, subject to any policy directive issued by the Commission, be governed by contract between the member and the approved service concerned.”

By implication Respondent was arguing that the secondment created a new contract.  I am not persuaded that that was the position.  The Oxford Dictionary defines secondment as a temporary transfer.  In other words an employee on secondment remains the employee of the original employer (seconder) during the period of secondment.  The Industrial Court of Malaysia in the case of Bank Simpanan Nasional Finance Bhd & Anor v Omar Hashim (2002) 1 ILR 272 (Award No. 1013 of 2005) explained the meaning of the term “secondment” as follows

“The ordinary dictionary meaning of secondment as a temporary transfer, is on the face of it the connotation that the employee is subject to recall by his employer.  So he is not a permanent employee of the other.”

The same Court in Comex Services Asia Pacific Region, Miri v Grame Ashley Power (1987) 2 ILR 34 reinforced the idea of a temporary transfer stating;

“Therefore so long as the contract is not terminated, a new contract is not made and the employee continues to be in the employment of the original employer.  Even if the employer orders the employee to do certain work for another person, the employee still continues to be in his employment.  The only thing that happens in such cases is that the employee carries out the orders of the master, hence, he has the right to claim his wages from the employer and not from the third party to whom his services are lent or hired.  It may be that such third party may pay his wages during the time he had hired his services, but that is because of his agreement with his real employer.  However, that does not have the effect of transferring the service of the employee to the other employer.  The hirer may exercise control and direction in the doing of the thing for which he has hired the employee; or even the manner in which it is to be done.  But if the employee fails to carry out his direction he cannot dismiss him and can only complain to the actual employer.  The right of dismissal is vested in the employer.”

I am persuaded that the above quotation aptly describes the Respondent’s position.  In my view the Respondent’s secondment was informal as no fully detailed secondment agreement was put in place as envisaged by section 14 (2) of SI 1/2000.  Consequently Respondent continued to receive his remuneration as a member of the Public Service.  If Appellant was to pay for Respondent’s services, in my view, a detailed agreement would have been put in place.  In the case of Dairibord Zimbabwe Limited v Lazarus Muyambi SC 22/2002 the terms and conditions of the secondment were set out in a contract of assignment entered into by the appellant and the respondent.   Such a contract is missing in casu.  I am not persuaded that it can be implied from the circumstances of this case.  In any event Respondent acknowledges that there was no such contract.  In paragraph 4.24 of the Respondent’s Response to the Appellant’s Appeal (page 14 of record) he states;

“There should have been a contract as envisaged by the law.”

The use of the words “should have been” is a clear acknowledgement that such a contract was not in existence even though an ideal situation would have been to have one.  Also the claimant’s submissions in the arbitral tribunal are informative.  In the Background on page 61 of the record, in paragraphs (h) and (1) he states;

“h) 	However, instead the Permanent Secretary processing the secondment 		to the Public Service Commission for the transfer to be completed in		terms of Section 14 of the Public Service Regulations, 2000 as			amended by SI 58A of 2001 refused to do so saying the complainant		must learn to work for nothing.  The provision regulates the transfer of		public servants to third party organizations where they get new			contracts of employment for the of employment for the period they are		working.

I only came to know about the non-processing after almost a year of insisting that I be transferred and paid for the work I was then doing.” (underlining for emphasis)

In my view Respondent was alive to the fact that he could only be paid by the Appellant on being transferred and becoming an employee of Appellant.  The reference to “insisting that I be transferred” seems to be that realization.  It is therefore difficult to understand on what basis the arbitrator concluded that;

“Holistically, one is adequately convinced that indeed there a (sic) valid contractual relationship between the parties in casu.”

Clearly his conclusion is not supported by the documents on record.  Accordingly the appeal must succeed.

Wherefore I order as follows;

The appeal be and is hereby upheld with costs.

The arbitral award by honourable J. Ndomene be and is hereby set aside and substituted with the following

“The claim be and is hereby dismissed for lack of merit”.

KANTOR & IMMERMAN, Appellant’s legal practitioners

MTOMBENI, MUKWESHA & MUZAWAZI & ASSOCIATES, Respondent’s legal practitioners