Bankers Association of Zimbabwe v Banking and Finance Managers Union of Zimbabwe & Anor

### Preamble
Judgment No. SC 15/2019
1
Civil Appeal No. SC 1043/17
---------


REPORTABLE	(6)

BANKERS     ASSOCIATION     OF     ZIMBABWE

v

BANKING     AND     FINANCE     MANAGERS     UNION     OF     ZIMBABWE     (2)     THE     REGISTRAR     OF     LABOUR

SUPREME COURT OF

GOWORA JA, HLATSHWAYO JA & PATEL JA

HARARE, JUNE 28, 2018 &  FEBRUARY 26, 2019

T. Zhuwarara, for the appellant

T. Mpofu and S. Nhliziyo, for the first respondent

No appearance for the second respondent

PATEL JA:	This is an appeal against the decision of the Labour Court dismissing an appeal against the determination of the second respondent, the Registrar of Labour, to register the first respondent as a trade union. The appellant is an organisation of bankers, while the first respondent was formed to represent the interests of managerial employees in the banking, finance and allied industry.

In the court a quo, the appellant argued that the first respondent was not allowed to be registered as a trade union by virtue of s 45(1)(b) of the Labour Act [Chapter 28:01] and in terms of public policy generally. In turn, the first respondent argued that there was no impediment to its registration, whether under the Labour Act, the former Constitution or public policy.

Labour Court Judgment and Grounds of Appeal

In a very detailed and fully reasoned judgment, the court a quo upheld the determination of the Registrar and rejected the appellant’s approach as one that led to absurdity. It considered the statutory definitions of “employer” and “employee” and found that managers are sui generis as both ordinary employees and representatives of the employer. Consequently, to read s 45(1)(b) of the Labour Act as excluding managerial employees from forming a trade union is inconsistent with the right conferred by s 4 of the Act on every employee to form, belong to and register a trade union. This position was fortified by the definition of “trade union” and s 27(1) of the Act which gives any group of employees the right to form a trade union. A rigid, grammatical construction of s 45(1)(b) would be absurd, unjust and unreasonable and inconsistent with other provisions of the Act. Moreover, the legislative history of s 45 shows that it was specifically amended in 2002 to exclude a provision barring trade unions from representing managerial employees. Additionally, the court took the view that the existing employers’ organisation (Banking Employers Association of Zimbabwe) safeguards the interests of shareholders in the banking sector rather than the employment interests of managerial employees.

The court also had regard to the long title of the Labour Act and the reference therein to conventions of the International Labour Organisation (the ILO) ratified by Zimbabwe, in particular, ILO Convention No. 87 of 1948 which enshrines the right of workers and employers to join organisations of their own choosing. This right forms part of the larger freedom of association embodied in the former Constitution and the principal international and regional human rights instruments to which Zimbabwe is a party. The court further highlighted the prevailing jurisprudence of the ILO to the effect that managerial and supervisory employees may be prevented from belonging to the same trade union as other workers, provided they have the right to establish their own associations and are not defined so broadly as to weaken the organisations of other workers. Accordingly, the court held that the argument advanced by the appellant would operate to hinder the constitutional right of first respondent’s members to freely associate by forming a trade union.

The court proceeded to elaborate the manner in which the Labour Act and international instruments support the liberal position adopted by the first respondent. In particular, it was noted that the Act does not discourage the formation of more than one trade union in any industry and that, in any event, two trade unions in the banking industry would not constitute over-unionisation. Again, Part X of the Act recognises the importance of collective bargaining in every industry in conformity with ILO Convention No. 98. It followed that the registration of the first respondent would not be against public policy. Its registration supports the intention of the State, enhances justice and was not shown to be contrary to the public interest.

The grounds of appeal herein are very clear and concise. They impugn the entire judgment of the court a quo in the following respects:

in finding that the first respondent, which represents managers, could be registered as a trade union in light of the provisions of s 45 of the Labour Act

in finding that refusal to allow the first respondent to be registered to represent managers would be unconstitutional and therefore unlawful

in not finding that the registration of the first respondent  to represent managers would be against public policy.

The Statutory Dimension

The critical provision for scrutiny in casu is s 45(1) of the Labour Act. The subsection, which was amended by s 21 of Act 17 of 2002, elaborates the considerations applicable to the registration of trade unions or employers organizations. In its relevant portions it provides as follows:

“(1) In any determination of the registration of a trade union or employers organization or of the variation, suspension or rescission thereof, the Registrar shall—

(a) take into account—

(i) ……..; and

(iii) the desirability of affording the majority of the employees and employers within an undertaking or industry effective representation in negotiations affecting their rights and interests; and

(iv) the desirability of reducing, to the least possible number, the number of entities with which employees and employers have to negotiate; and

(vi) ……..;

and

(b) ensure compliance with the following requirements—

(i) a trade union shall not represent employers;

(ii) an employers organization shall not represent employees other than managerial employees;

(iii) the constitution of a trade union or employers organization shall not be inconsistent with this Act.”

The specific provision, the interpretation of which is in contention, is s  45(1)(b)(i), which enjoins the Registrar to ensure that “a trade union shall not represent employers”. The term “employer” is broadly defined in s 2 of the Act to mean “any person whatsoever who employs or provides work for another person ........ and includes …….. the manager, agent or representative of such person who is in charge or control of the work upon which such other person is employed”. The word “employee” is defined as “any person who performs work or services for another person for remuneration or reward on such terms and conditions as agreed upon by the parties or as provided for in this Act”. More specifically, a “managerial employee” means “an employee who by virtue of his contract of employment or of his seniority in an organisation, may be required or permitted to hire, transfer, promote, suspend, lay-off, dismiss, reward, discipline or adjudge the grievances of other employees”.

It is evident from these definitions that they have been deliberately widely cast to ensure that they encompass every conceivable player in the employment relationship. It is also evident that the role and station of a managerial employee are sandwiched between those of an employer on the one hand and those of an employee on the other. In my view, they are relatively interchangeable so that a managerial employee may be an employer or an employee, depending upon the particular function that he performs or the particular interest that he represents at the workplace at any given time. (For instance, there can be no doubt that a managerial employee is an employee for the purposes of an employment code of conduct that is expressly made applicable to all employees. See Zimbabwe Tourist Investment Company v Gwinyai SC 150-95, at p. 3). In short, the terms *employer” and “employee” must take colour from the specific context in which they appear.

In the context of s 45 of the Act, subs (1)(b)(ii) clearly envisages the possibility of managerial employees being represented by an employers organisation. But it does not necessarily require that this should invariably be the case. By the same token, subs 1(b)(i) prohibits any trade union from representing employers (quite apart from the fact that any such scenario would be practically absurd). However, these provisions do not expressly or by implication dictate that all managerial employees must be represented by an employers organisation. In any event, this could certainly not have been intended in the case of managerial employees lower down the hierarchy of any business or undertaking. The overall effect of s 45, in keeping with the freedom of association, is to allow managerial employees to belong to any association of their own choice, whether it be a trade union or an employers organisation.

On the incontestable premise that a managerial employee is an employee, it must be accepted that he is entitled to the protection of all the rights correlative to that status. These include the right to collective representation at the workplace. This is amply recognised in several key provisions of the Labour Act. First and foremost is s 4(1) of the Act which confers upon every employee “the right, if he so desires, to be a member or an officer of a trade union” and “the right to take part in the formation and registration of a trade union”. In the specific context of s 4(1), a managerial employee is an employee who is entitled to unionise. Also relevant is the definition in s 2 of a “trade union” which means “any association or organization formed to represent or advance the interests of any employees or class thereof in respect of their employment”. This recognition of different classes of employees is reflected in s 27(1) of the Act which affirms the position that “any group of employees may form a trade union”. This must perforce extend to groups of managerial or non-managerial employees. Finally, there is s 23(1) of the Act which draws a clear distinction between managerial and non-managerial employees in the formation of workers committees. The proviso to s 23(1) prohibits the involvement of managerial employees in the functioning of any workers committee “unless such workers committee is composed solely of managerial employees appointed or elected to represent their interests.” What emerges from all of the above-cited provisions is that the Labour Act clearly contemplates and recognises the right of managerial employees to unionise. It follows that the court a quo was undoubtedly correct in arriving at that conclusion.

The Constitutional and International Sphere

Section 58 of the Constitution of Zimbabwe guarantees the freedom of assembly and association, both as a positive right to freely assemble and associate and as a negative right not to assemble or associate with others. These rights and freedoms derive from a well-established pedigree enshrined in several international conventions that have been ratified by Zimbabwe. These include Articles 21 and 22 of the International Covenant on Civil and Political Rights and Articles 10 and 11 of the African Charter on Human and Peoples rights. Article 8.1 of the International Covenant on Economic, Social and Cultural Rights is of particular significance apropos trade union rights. It guarantees the right of everyone to form and join the trade union of his choice for the promotion and protection of his economic and social interests.

Under the broad rubric of the freedom of association and in the specific context of labour rights, s 65(2) of the Constitution proclaims the right of every person to form and join any organisation of his choice in the following terms:

“Except for members of the security services, every person has the right to form and join trade unions and employee or employers’ organisations of their choice, and to participate in the lawful activities of those unions and organisations.”

There can be no doubt that this provision reaffirms the right of every employee, if he so chooses, to belong to a trade union. It certainly cannot be construed to attenuate that right. Following on from this fundamental premise, as is enjoined by para 10 of the Sixth Schedule to the Constitution, s 45 of the Labour Act continues in force as an existing law, but must be construed in conformity with the Constitution.

The constitutional argument is fortified by having recourse to the relevant conventions of the International Labour Organisation (ILO). For present purposes, the two key instruments are the Freedom of Association and Protection of the Right to Organise Convention 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention 1949 (No. 98). Both Conventions have been duly ratified by Zimbabwe. Consequently, inasmuch as they are conventions to which Zimbabwe is a party, our courts are bound by s 46(1)(c) of the Constitution to take them into account when interpreting the Declaration of Rights. Additionally, to the extent that they are binding upon Zimbabwe, the courts are enjoined by s 327(6) of the Constitution, when interpreting legislation, to adopt any reasonable interpretation of the legislation that is consistent with those Conventions in preference to an alternative interpretation that is inconsistent with them. Furthermore, one of the primary objects of the Labour Act, as expressly enunciated in its Preamble, is:

“to give effect to the international obligations of the Republic of Zimbabwe as a member state of the International Labour Organisation and as a member of or party to any other international organisation or agreement governing conditions of employment which Zimbabwe would have ratified”.

Articles 2, 3 and 11 of Convention No.87 entrench the freedom to associate freely and the right to organise as follows:

“Article 2

Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation concerned, to join organisations of their own choosing without previous authorisation.”

“Article 3

1. Workers' and employers' organisations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organise their administration and activities and to formulate their programmes.

2. The public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.”

“Article 11

Each Member of the International Labour Organisation for which this Convention is in force undertakes to take all necessary and appropriate measures to ensure that workers and employers may exercise freely the right to organise.”

Article 2 of Convention No. 98 guarantees the independence of workers’ and employers’ organisations from one another and their members. It further proscribes any interference designed to promote the domination of workers’ organisations by employers or employers’ organisations. It provides that:

“Article 2

1. Workers' and employers' organisations shall enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration.

2. In particular, acts which are designed to promote the establishment of workers' organisations under the domination of employers or employers' organisations, or to support workers' organisations by financial or other means, with the object of placing such organisations under the control of employers or employers' organisations, shall be deemed to constitute acts of interference within the meaning of this Article.”

It is also apposite and instructive to have regard to the jurisprudence of the ILO pertaining to the application of the two Conventions with specific reference to managerial and supervisory staff. According to the Digest of Decisions and Principles of the Freedom of Association Committee of the Governing Body of the ILO (5th Revised Edition) para 247 at p. 52:

“It is not necessarily incompatible with the requirements of Article 2 of Convention No. 87 to deny managerial or supervisory employees the right to belong to the same trade unions as other workers, on condition that two requirements are met: first, that such workers have the right to establish their own associations to defend their interests and, second, that the categories of such staff are not defined so broadly as to weaken the organisations of other workers in the enterprise or branch of activity by depriving them of a substantial proportion of their present or potential membership.”

The gravamen of this passage, as I perceive it, is that managerial employees are entitled to establish their own trade unions, so long as they do not broaden their membership to the extent of diluting the actual or potential membership of trade unions established by non-managerial employees. Nonetheless, over and above that consideration, the overriding principle is that managerial employees cannot be precluded from forming and belonging to their own trade unions.

The Realm of Public Policy

It is argued by Mr Zhuwarara, for the appellant, that managers cannot join the first respondent but should belong to the existing employers organisation, because there can only be employers and employees for the purpose of collective bargaining within any single industry or sector. Their associations must be distinct and separate and must represent only employers on the one hand and employees on the other. One of the principal justifications for this separation is to ensure that confidential information to which managers are privy should not be divulged to junior employees in the course of the collective bargaining process. He further submits that the peculiar position of managers is a product of the pro-labour legislation crafted in the 1980s. Managers constitute a third element and, as a matter of legislative policy, Parliament has to break the binary structure of the Labour Act so as to cater for this third group.

Mr Mpofu, for the first respondent, submits that it is desirable that managerial employees and other employees have their own respective unions. As regards the disclosure of confidential matter, the duty of fidelity is guaranteed by the fact that the first respondent is formed exclusively by managers. There is no possibility of confidential information being shared between managers and non-managerial employees for the purpose of collective bargaining. Measures have already been put in place to ensure that the members of the first respondent will continue to observe their dual role of being employees in their own right and at the same time representing and promoting the interests of employers. Any manager who fails to perform his duties within the bounds of confidentiality will obviously be disciplined in terms of the lawful mechanisms available to the employer. Having regard to my observations and conclusions above vis-à-vis the right to unionise under the Constitution and the Labour Act, I see no cogent reason to disagree with the first respondent’s submissions in this respect.

Pursuant to exchanges between the court and both counsel, it became apparent that there are three distinct organisations, each representing different interests, within the banking sector. They are the Bankers Association of Zimbabwe (BAZ), the Banking Employers Association of Zimbabwe (BEAZ) and the Banking and Finance Managers Union of Zimbabwe (BFMUZ).

The Constitution of BAZ, as amended on 20 September 2011, sets out its objects in the preamble and in clause 5. Its principal objects are “to provide a forum for the consideration of matters of policy and mutual interest concerning Member- banks” and “to deal with, advance and promote any matters of interest to Member-banks and to foster cooperation between them”. The membership of BAZ, according to clause 7, “shall be confined to Banks, which are registered or provisionally registered in terms of the [Banking] Act.” As per clause 8, the office bearers of BAZ are to be elected annually.  Clause 8.1 stipulates that “the only persons eligible to be elected …….. shall be the chief executives of Member-banks”. As regards the management of BAZ, clause 9.1 provides that its affairs and business …….. shall be conducted and managed by a council, to which each Member-bank shall be entitled to appoint one representative, and …….. an alternate, from time to time”.

Turning to the Constitution of BEAZ, which was established on 3 June 2016, clause 1.2 thereof makes it clear that BEAZ “is an employer’s organisation as defined and referred to in the Labour Act”. The principal object of BEAZ, as per clause 3.1(a) is “to represent the interests of employers engaged in the Banking Undertaking in Zimbabwe”. In terms of clause 4.1, membership of BEAZ ‘shall be open to any employer engaged in [the] Banking Undertaking in Zimbabwe”. The procedure for attaining membership is prescribed in clauses 4.3 to 4.6. Applications for membership are processed by the Chairperson and decided upon by BEAZ. If an application for membership is rejected, the applicant may appeal to BAZ and “the decision of BAZ shall be final”. As regards the representation of members, clause 5.1 states that “a member  may nominate a managerial employee in their employment to represent him on the Association” (my emphasis). According to clause 7, “the governing body of BEAZ is the Executive Committee consisting of “members elected by the Association” and “such other members as the Executive Committee may agree to co-opt from time to time”. With respect to the discipline of members, clause 16.2 provides that no member may be suspended or expelled without an opportunity to present his case at a General Meeting of BEAZ. By virtue of clause 16.3, “a member may appeal against a decision of the General Meeting in the same manner prescribed in terms of clause 4.5, mutatis mutandis, to the BAZ”.

Lastly, there is the Constitution of BFMUZ itself, established in March 2012. In terms of clause 3.1, the principal objectives of BFMUZ are, inter alia, to “establish positive regulation of the relations between members and their employers …….. protect and further the interests of members in relation to their employment …….. promote and defend members’ rights and interests …….. assist members in all employment related matters”. As regards membership, clause 4.1 provides that “any managerial employee or professional not covered by an employment council who is employed by an employer shall be eligible for membership”. As per clause 4.6, an applicant for membership whose application is rejected may “immediately appeal to the Regional Committee and then to the NEC [National Executive Committee] whose decision shall be final”.

A comparative analysis of the membership provisions of the three constitutions reveals the following. First and foremost, there is a very strong connection and interrelationship between BAZ and BEAZ, whereas BFMUZ is relatively independent and self-contained. In the case of the former organisations, there is a very real possibility of domination and interference by BAZ in the affairs of BEAZ, contrary to Article 2 of ILO Convention No. 98, particularly apropos the right of admission to and expulsion from BEAZ. Secondly, BEAZ is by definition “an employer’s organisation as defined and referred to in the Labour Act”. Again, as regards the nomination of representatives to BEAZ by its members, a clear distinction is drawn between employer members and managerial employees. Thirdly, the membership of BFMUZ is strictly confined to managerial staff. Thus, the scope of its potential membership is not so broadly defined as to weaken or dilute other organisations formed by non-managerial employees. Fourthly and lastly, there is nothing in the three constitutions, taken together, to indicate the likelihood of over-unionisation of the banking sector as between different categories of employees.

Given all of the foregoing, it seems to me that public policy considerations would militate radically against compelling managerial staff to belong to BEAZ. On the contrary, they weigh heavily in favour of managerial employees being allowed to establish and join their own particular association in the shape of BFMUZ. Consequently, I take the view that the Labour Court was eminently correct and justified in concluding that the registration of the first respondent would not be against public policy but would instead enhance justice and the public interest.

The Legislative History

In 2002, s 45(1)(b)(i) of the Labour Act was amended by s 21 of Act No. 17 of 2002, by specifically deleting the reference to managerial employees from the scope of persons that trade unions were prohibited from representing. This amendment was preceded by the presentation to Parliament of the Labour Relations Amendment Bill 2000.

Section 15B of the Interpretation Act [Chapter 1:01], which was inserted by s 2 of Act 14 of 2002, explicitly allows recourse to extrinsic material in the interpretation of enactments. In its relevant portions, it provides as follows:

“(1) Subject to subsection (3), in the interpretation of a provision of an enactment consideration may be given to the material referred to in subsection (2) for the purpose of –

(a) confirming that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the enactment and the purpose or object underlying the enactment; or

(b) determining the meaning of the provision when –

(i) the provision is ambiguous or obscure; or

(ii)the ordinary meaning conveyed by the text of the provision taking into account its context in the enactment and the purpose or object underlying the enactment leads to a result that is manifestly absurd or unreasonable.

(2) The following material may be used for the purposes of subsection (1) –

(a) ……..;

(b) ……..;

(c) ……..;

(d) any treaty, convention or other international agreement that is referred to in the enactment;

(e) any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before or furnished to members of Parliament by a Minister before the time when the provision was enacted;

(f) the speech made to Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time, and the committee stage proceedings relating to the Bill containing the provision, as recorded in the Votes and Proceedings of Parliament or in any official record of debates in Parliament;

(g) ……..;

(h) …….. .

(3) …………….. .”

In his determination approving the registration of BFMUZ in May 2013, the Registrar of Labour had regard to the second reading speech of the responsible Minister in presenting the 2000 Bill to Parliament. With particular reference to s 45(1)(b)(i), the Minister made it clear that the provision was to be amended because it was inconsistent with the Constitution to the extent that it barred managerial employees from belonging to a trade union. The court a quo, in endorsing the determination of the Registrar, also had regard to the same rationale underlying the amendment of s 45(1)(b)(i). There is no doubt that both the Registrar and the Labour Court were entirely correct in taking that approach.

The intention behind the amendment of s 45 is further elaborated by the Memorandum accompanying the 2000 Bill. In that Memorandum, it is noted that in 1992 the Government of Zimbabwe requested the assistance of the ILO in reviewing our labour legislation “with a view to updating, harmonising and recasting it”.  Consequently, “the present Bill seeks to amend [the Act] to take into account the recommendations of the ILO and of the stakeholders concerned”. With specific reference to s 45, the restriction on trade union representation of managers “effectively prohibits managerial employees from bargaining collectively with their employers. The amendment sought …….. will remove this restriction”.

The foregoing legislative material puts the present matter absolutely beyond the bounds of contestation. The clear objective in removing the reference to managerial employees from s 45(1)(b)(i) was to allow trade unions to represent the interests of managerial employees and to enable their registration for that purpose. The intention of the legislature was concisely and definitively effectuated by that amendment.

It was accepted by counsel for the appellant that the Registrar of Labour is duty-bound to exercise his discretion to register a trade union in conformity with the enabling provisions of the Labour Act. There can be no doubt that the Registrar’s determination and its subsequent affirmation by the court a quo quite properly took into account the rationale for amending s 45 of the Labour Act.

Disposition

In conclusion, I take the view that the instant appeal cannot be sustained on any of the stated grounds of appeal. Firstly, s 45 of the Labour Act, properly construed, clearly allows the registration of the first respondent as a trade union to represent the interests of managerial employees in the banking sector. Secondly, the registration of the first respondent to represent managers would certainly not be unconstitutional. And thirdly, such registration cannot be regarded as being contrary to public policy. It follows that the findings and judgment of the court a quo cannot be factually impugned or legally impeached and must therefore be upheld. The costs of this appeal should ordinarily follow the cause.

It is accordingly ordered that the appeal be and is hereby dismissed with costs.

GOWORA JA:		I agree.

HLATSHWAYO JA:	I agree.

Kantor & Immerman, appellant’s legal practitioners

Mawire & Associates, 1st respondent’s legal practitioners