HLATSHWAYO
JA:
On 23 September 2020 we invited the parties to address the Court on a
point in limine that arose after judgment was reserved in this
matter.
The
point in limine is whether the High Court, in the exercise of its
powers to issue a declaratur, could properly issue one in a purely
labour matter in the light of section 2A(3) of the Labour Act
[Chapter 28:01] (“the Labour Act”) which provides that the Labour
Act “shall prevail over any other enactment inconsistent with it”
as read also with section 89(6), which provides for the exclusive
jurisdiction of the Labour Court in the first instance to hear and
determine any application, appeal or matter concerned with labour
issues.
Both
parties filed supplementary heads of argument.
It
had been expected that the matter would be enrolled and viva voce
submissions made. However, after receipt of the supplementary heads
of arguments it was considered that another hearing on the matter was
not necessary, but the parties were given time to file any additional
heads they deemed necessary in lieu of a hearing, which the
respondents did on 11 April 2022.
FACTUAL
BACKGROUND
The
respondents were employed on contracts without limit of time by the
appellant at its various branches across the country.
On
10 and 11 June 2015, the appellant wrote letters to the respondents
advising them that due to viability constraints, their employment
contracts had been terminated on three months notice.
In
the same letter, the appellant offered to replace the terminated
employment contracts with new ones which provided for remuneration
based on productivity. The reason for so doing was that the appellant
still required the respondents services.
The
letters were couched in the following terms:
“The
macro-economic challenges facing the country are seriously hampering
the viability of the company. Particular reference is made to the
poor performance of the company as reflected by the month-on-month
sales figures from last year to date. The sales figures are well
below operating costs. These figures show that it is impossible for
the company to adapt the way it does business to its operating
environment to ensure that it survives. The costs of the company must
be aligned and positively correlated to productivity. Your current
contract of employment was concluded when the environment was not as
hostile on manufacturers as it now is. At the time that we concluded
the employment contract, we agreed that the contract could be
terminated on notice other than through dismissal. Because we still
require your services, we wish to terminate your current contract on
notice and replace it with one that provides for remuneration based
on productivity. We hereby give you three months notice for the
termination of your current contract of employment. At the same time,
we hereby offer you a new performance contract which aligns your
remuneration to your productivity. Your new contract, if accepted
shall become effective on the date that the termination of your
current employment contract becomes effective. Should you want to
bring forward the effective date of your new contract, you will be
required to waive the notice required to terminate your contract of
employment.” (My emphasis)
There
were several correspondences between the appellant and the
respondents through their legal practitioners wherein the respondents
pointed out to the appellant that its decision to terminate the
employment contracts and replace them with new ones was unlawful.
The
appellant, however, remained adamant that its decision was lawful.
This
prompted the respondents to approach the court a quo seeking an order
declaring the termination or variation of their employment contracts
to be unlawful on 4 September 2015.
The
court issued the following declaratory order:
“1.
The termination or variation of the applicants contracts of
employment by the respondent be and is hereby declared unlawful.
2.
The respondent be and is hereby ordered to reinstate the applicants
to their employment without loss of salary and benefits.
3.
In the event that reinstatement is no longer an option, the
respondent be and is hereby ordered to pay the applicants damages to
be determined by an arbitrator appointed by a Senior Labour Officer.
4.
The respondent is ordered to pay the costs of suit.”
SUBMISSIONS
IN THE COURT A QUO
The
respondents case before the court a quo was that the purported
termination of their employment contracts and the offer of new
contracts was unlawful in that it was a calculated manoeuvre to
circumvent the retrenchment procedures set out in section 12C of the
Labour Act [Chapter 28:01] and the Regulations thereto.
The
respondents argued that since the termination of the employment
contracts had been necessitated by economic hardships, the appellant
was in fact re-organising the undertaking hence the termination of
employment contracts was a way to reduce costs.
The
respondents thus prayed for an order declaring the termination or
variation of their employment contracts to be unlawful.
The
appellant denied that the termination of the employment contracts was
a way to circumvent retrenchment laws, instead it averred that the
respondents were to remain employed albeit on new employment
contracts.
The
appellant contended in opposition that all the respondents, save for
the 13th respondent, had repudiated their employment contracts by not
rendering their services after its branches had closed.
It
was the appellant's case that it accepted the repudiation of the
employment contract by letters dated 19 September 2015 and that the
repudiation was the reason the respondents employment contracts stood
terminated.
Further,
it was the appellant's case that the relief that was being sought
by the respondents was within the powers of the Labour Court and
hence they ought to have exhausted that remedy before approaching the
High Court.
The
appellant argued that section 89 of the Labour Act endows the Labour
Court with the same review powers as the High Court hence the Labour
Court has power to grant the relief that the respondents sought in
the court a quo.
To
that extent, the appellant argued further that the court a quo should
have declined jurisdiction on the basis of section 89(6) of the
Labour Act.
DECISION
OF THE COURT A QUO
The
court a quo found that the circumstances of the case warranted the
granting of a declaratur as provided for by section 14 of the High
Court Act [Chapter 7:06].
The
court found that the reason for the termination of the respondents
contracts of employment was informed by alleged macro economic
challenges and, therefore, the appellant was conducting an unlawful
dismissal.
On
the allegations of repudiation, the court held that it was not
satisfied that the respondents had repudiated their contracts since
the letters purporting to accept the repudiation were authored after
the commencement of the matter before it.
Accordingly,
the court a quo made an order declaring the termination of the
respondents contracts of employment unlawful. It also made an order
for the reinstatement without loss of salary and benefits or damages
in the alternative, together with an order of costs against the
appellant as detailed above.
Aggrieved
by that outcome, the appellant filed the present appeal.
GROUNDS
OF APPEAL
(i)
The Learned Judge in the court a quo erred in law in finding that
respondents were entitled to claims made and erred further in not
finding that as no cause of action had arisen as at the date of the
filing of the application, respondents were not entitled to any
relief at all.
(ii)
The learned judge in the court a quo erred in failing to place any
weight on the fact that no cause of action had accrued to respondents
as at the date of the filing of their application.
(iii)
The learned judge in the court a quo erred in finding that the
appellant sought to retrench its employees and erred further in
failing to place due weight on the fact that appellant was actively
attempting to avoid retrenchment and to maintain jobs.
(iv)
The learned judge in the court a quo erred in finding that
respondents had not repudiated their contracts of employment, such
error being a gross misdirection.
(v)
In all circumstances the learned judge in the court a quo erred in
granting the relief sought.
APPELLANT'S
SUBMISSIONS ON POINT IN LIMINE
On
the point in limine raised mero motu by the Court, the appellant's
main bone of contention is that the Labour Court has exclusive
jurisdiction to hear matters which are labour in nature.
The
appellant contends that the Labour Court is a specialised court
empowered in terms of section 172(2) of the Constitution 2013 to have
jurisdiction to deal with matters of employment and labour as may be
conferred upon it by an Act of Parliament.
The
appellant further argued that the provisions of section 89(6) of the
Labour Act gives the Labour Court some special protection that
ensures that it is only the Labour Court that fulfils the
constitutional obligation of dealing with labour matters and matters
relating to employment.
In
that regard, the appellant is of the view that section 89(6) of the
Labour Act gives the Labour Court exclusive jurisdiction to deal with
the matters that are referred to in section 89(1) of the Act.
Furthermore,
it was the appellant's submission that section 89(6) of the Labour
Act must be read together with section 2A(3) of the Act which
provides that the Labour Act shall prevail over any Act that is
inconsistent with it.
It
was further argued that although the High Court is empowered to grant
declaraturs in terms of section 14 of the High Court Act [Chapter
7:06], that power is discretionary and ought to be exercised in cases
that are justifiable, and that, therefore, the High Court's power
to grant a declaratory order in a purely labour matter is curtailed
by section 2A(3) of the Labour Act which provides that the Labour Act
shall prevail in the event of any inconsistency with any other Act.
RESPONDENTS
SUBMISSIONS
Per
contra, the respondents submitted that there does not exist any
conflict of jurisdiction in labour matters between the Labour Act and
the High Court Act.
In
that sense they argued that section 89(6) of the Labour Act does not
bring all labour disputes exclusively under the jurisdiction of the
Labour Court.
It
was further submitted that section 14 of the High Court Act is not
inconsistent with section 89(6) of the Labour Act.
In
that sense the respondents argue that section 2A(3) of the Labour Act
is of no application in this matter.
It
was further submitted that as section 171(1) of the Constitution
gives the High Court original jurisdiction over all civil and
criminal matters, there does not appear to be any provision in the
Constitution that limits the original jurisdiction of the High Court
over all civil matters.
In
that regard, it was submitted that the proper approach is that the
High Court enjoys jurisdiction over all matters including labour
matters and that, in fact, any unconstitutionality lay in the extent
that section 89(6) of the Labour Act seeks to oust the jurisdiction
of the High Court.
The
respondents finally argued that the present matter was
distinguishable from the recently decided cases of Nhari v Mugabe &
Ors 20-SC-161 and Chingombe & Anor v City of Harare & Ors
20-SC-177.
They
therefore submitted that the nature of the dispute between the
parties was such that it required a declaration of rights which only
the High Court could hear.
However,
in an apparent realization of the weaknesses of their submissions,
the respondents posited that if the court was not persuaded by their
arguments, this Court should exercise its powers of review in terms
of section 25 of the Supreme Court Act [Chapter 7:13] and proceed to
find that the actions of the Appellant were unlawful and confirm the
decision of the High Court on that basis.
ISSUE
FOR DETERMINATION
This
appeal will be decided on the preliminary point of whether or not the
court a quo in the exercise of its power to issue a declaratur could
issue one in a purely labour matter in the light of the provisions of
the Constitution and relevant legislation.
WHETHER
THE COURT A QUO COULD ISSUE A DECLARATUR IN THE CIRCUMSTANCES
Section
14 of the High Court Act [Chapter 7:06] enjoins the High Court to
exercise its discretion in appropriate cases and issue a declaratur.
Specifically, the provision is couched as followings:
“The
High Court may in its discretion, at the instance of any interested
person, inquire into and determine any existing, future, or
contingent right or obligation, notwithstanding that such person
cannot claim any relief consequential upon such determination.”
Clearly,
the power granted to the High Court above is discretionary and can be
exercised only in appropriate circumstances.
In
casu, the matter at hand was a labour matter and the question that
ought to be answered is whether the High Court could issue out a
declaratur in a matter that is purely labour in nature.
It
is prudent to first note that the Labour Court is a court of
specialised jurisdiction. See Lowveld Rhino Trust v Dhlomo-Bhala
20-SC-034.
The
Constitution 2013 in section 172(2) provides that the Labour Court
shall have such jurisdiction over matters of labour and employment as
may be conferred by an Act of Parliament.
Section
89(6) of the Labour Act, gives the Labour Court exclusive
jurisdiction to hear labour matters and it provides thus:
“89
Functions, powers and jurisdiction of Labour Court
(6)
No court, other than the Labour Court, shall have jurisdiction in the
first instance to hear and determine any application, appeal or
matter referred to in subs (1)…”
The
essence of the above provision is that the Labour Court has exclusive
jurisdiction when it comes to issues dealing with labour matters at
the first instance.
This
is further cemented by the provision of section 2A(3) of the Act
which provides that the Labour Act shall prevail over any enactment
that is inconsistent with it.
Section
89(6) and section 2A(3) of the Labour Act therefore have to be read
together.
And
the import of both provisions is that the inherent jurisdiction of
the High Court becomes limited by the fact that the Labour Court has
exclusive jurisdiction in respect of all labour matters at the first
instance.
The
above vexed question has been answered differently in various
episodes of our legal history, which can be identified as the period
before the inauguration of the new Constitution in 2013, the
immediate post 2013 situation and the current position.
Before
the coming into force of the new Constitution in 2013, the position
was settled that the High Court had no jurisdiction in matters of
labour and employment.
Thus,
various decisions handed down by the courts in this period confirm
this. For example, in DHL International Ltd v Madzikanda 11-HH-051
2010 (1) ZLR 201 (H) it was stated at para 14:
“The
Labour Court has exclusive jurisdiction in matters relating to
suspensions from employment and that the possession of the employer's
property by an employee in terms of the contract of employment is so
interdependently linked to the contract that one cannot decide one
without deciding on the other.”
Similarly,
in Moyo v Gwindingwi NO & Anor 2011 (2) ZLR 368 the court held:
“Section
89(6) is clear and unambiguous that 'no court' has jurisdiction
over matters falling under the purview of the Labour Court. This
court does not possess the machinery to jealously guard its inherent
jurisdiction where the legislature has specifically taken it away.”
See
also Zimtrade v Makaya 2005 (1) ZLR 427 (H) 429 wherein the court
held as follows:
“I
am of the opinion that matters relating to suspension from employment
with or without salary and matters relating to dismissals are
specifically within the purview of the Labour Court as these matters
are provided for in the Act and the regulations made thereunder; the
jurisdiction of this Court is specifically ousted in respect of
matters of dismissals and suspensions, as these are specifically
provided for in the Act.”
However,
with the advent of the new Constitution in 2013, there followed a
period of conflicting decisions in the High Court with some opinions
plumping for the High Court having original jurisdiction on all
matters including those involving labour and employment on the basis
that section 171(1) of the Constitution trumps section 89(6) of the
Labour Act.
On
the other hand, contrary opinion favoured the view that the Labour
Court exercised exclusive jurisdiction in the first instance in all
matters involving employment and labour.
These
cases are concisely discussed in the Nhari v Mugabe (supra) case.
One
of the pillars of the opinions which championed the overall and
original jurisdiction of the High Court in all matters was that only
the High Court has jurisdiction to issue a declaratory order, per
section 14 of the High Court Act.
However,
in my view, this was an incorrect understanding of the nature of the
remedy of a declaratory order.
While
section 14 of the High Court Act captures this remedy in its broadest
and classical form as a “gentle order” which may be issued with
or without any consequential relief, there is absolutely no doubt in
my mind that the Labour Court in its daily operations does routinely
issue declaratory orders, holding, for example, that an employee has
been wrongfully dismissed or certain actions constitute unfair labour
practices and then proceeding to grant consequential relief.
I
make this point to emphasize that even in the absence of the Nhari v
Mugabe (supra) matter, the view of this Court would have been to
uphold the Labour Court's exclusive jurisdiction in employment and
labour matters.
Moreso,
because it would have taken very clear and explicit provisions in the
new Constitution to oust the legal regime established and solidified
before its enactment.
Happily,
the vexed controversy over the exclusive jurisdiction of the Labour
Court on all labour matters versus the High Court's unlimited,
original jurisdiction on all matters which had led to “an unhappy
state of law” has been put to rest in Nhari v Mugabe, supra, as
follows, at paras 40 41:
“The
same Constitution that conferred original jurisdiction on the High
Court over all civil and criminal matters also made provision for the
creation of other specialised courts, whose jurisdiction over
specialised areas of the law and the exercise of such jurisdiction
was left entirely to Acts of Parliament. In other words, it is the
Constitution itself which has permitted the establishment of these
specialised courts and, in the same breath, provided for the issue of
jurisdiction and exercise of such jurisdiction to be left to an Act
of Parliament. Section 172 of the Constitution which establishes the
Labour Court is not made subject to section 171 which creates the
High Court. The two sections are in pari materia and must therefore
be construed together. In making provision for the establishment of
specialised courts in Acts of Parliament, the Constitution has not in
any way attempted to fetter or restrict the jurisdiction that is to
be conferred upon such courts, or to make such jurisdiction subject
to section 171 which creates and provides for the jurisdiction of the
High Court.”
The
learned Appeal Judge then goes on the give examples of specialised
courts such as military tribunals, tax courts and customary law
courts and concludes that not only would it be absurd to extend the
jurisdiction of the High Court to all such specialised courts, but it
would get the High Court “bogged down in matters over which it may
have very little expertise or petty matters that should ordinarily
not detain the court”.
The
Stanley Nhari v Mugabe & Ors (supra) was followed recently by
Cainos Chingombe & Anor v City of Harare & Ors. (supra) where
following their suspension from employment, the appellants
unsuccessfully sought a declaration at the High Court that such
suspension was unlawful and consequential relief.
The
Supreme Court held that “the High Court had no jurisdiction to
issue a declaratur in respect of issues of labour and employment”
and that “Section 2A of the Labour Act makes it clear that
notwithstanding the powers of the High Court to issue declaraturs,
the Labour Act prevails over all other laws inconsistent with it.”
Accordingly,
it this Court's conclusion that the High Court erred in assuming
jurisdiction in a purely labour matter. It should have declined
jurisdiction.
In
light of the above, it is evident that section 25(2) of the Supreme
Court Act confers upon this Court the power of review over matters
that have come before it by way of appeal. The powers of review are
exercisable upon the discovery of any irregularity in the proceedings
which took place in the lower court.
In
the circumstances, the matter in the High Court was a matter brought
about as a result of the appellant's termination of the respondents
contracts of employment on notice and replacing those terminated
contracts with new ones which provided for remuneration based on
productivity.
That
in my view is purely a labour matter as enshrined in section 89(1) of
the Labour Act.
The
High Court did not have jurisdiction to hear the matter. Such an
irregularity cannot stand.
DISPOSITION
Giving
due regard to the submissions made by the parties and the
considerations of the law thereon, the court a quo ought to have
declined its jurisdiction on the matter as it was a purely labour
issue.
This
Court in the exercise of its review powers sets aside the decision of
the court a quo.
Accordingly,
it is ordered as follows:
1.
The appeal succeeds with each party bearing its own costs.
2.
The Court, in the exercise of its review powers in terms of section
25(2) of the Supreme Court Act [Chapter 7:13] hereby sets aside the
decision of the court a quo and substitutes it with the following:
“The
application is struck off the roll with costs.”
GARWE
JA: I agree
GUVAVA
JA: I agree
Mtetwa
& Nyambirai, appellant's legal practitioners
Calderwood,
Bryce-Hendrie & Partners, respondents legal practitioners
