This is an appeal, coupled with a cross-appeal, against the whole judgment of the Labour Court of Zimbabwe (the court a quo) in which it granted an application for review of the determination by the Retrenchment Board (the second respondent) dated 13 October 2015.
After hearing submissions from the appellant and the first respondent, the court issued the following order:
“1. The appeal be and is hereby allowed.
2. The judgment of the court a quo be and is hereby set aside and substituted with:
'The application for review is dismissed with costs.'
3. The first respondent's cross appeal be and is hereby struck off the roll.”
The court indicated that reasons for the order would follow. The reasons now appear hereunder.
FACTUAL BACKGROUND
The appellant initiated a retrenchment process against the first respondent before the second respondent. The second respondent made recommendations to the Minister of Labour and Social Services (the Minister) in terms of the Labour Relations Retrenchment Regulations, 2003 (SI 186/2003) (the Regulations).
By notice dated 2 March 2015, the Minister approved the retrenchment of the first respondent with effect from 23 February 2015. The approval included the terms for the retrenchment, and, more particularly, that the first respondent was entitled to payment of a gratuity equivalent to one month's salary for every year worked, a stabilisation allowance equivalent to two months salary, and a severance payment equivalent to 13.5 months salary.
The first respondent was to be paid all statutory benefits and any other agreed items.
The appellant, thereafter, paid the first respondent the amount of US$171,397=51. The amount was computed using the first respondent's pensionable salary.
The first respondent was, however, of the view that he was entitled to an amount of US$258,522=22 computed using what he described as the “total guaranteed remuneration package”.
The total guaranteed remuneration package was alleged to include the “basic pensionable pay, allowances (non-pensionable), cafeteria benefits, and annual travel allowance (non-pensionable).”
He engaged the appellant for a re-calculation of the package. The parties failed to agree.
The first respondent approached the second respondent seeking re-quantification of the retrenchment package and that the appellant be compelled to pay the revalued retrenchment package.
The issue placed before the second respondent was whether, in computing the retrenchment package due to the first respondent, the second respondent was required to use the pensionable salary or the total guaranteed remuneration package.
The request for re-quantification of the retrenchment package was resisted by the appellant, arguing that the second respondent was now functus officio and did not have jurisdiction to re-hear and re-determine the matter.
In a decision dated 12 October 2015, the second respondent declined jurisdiction over disputes arising from terms and conditions of employment. It, instead, referred the parties to a Labour Officer in terms of section 93 of the Labour Act [Chapter 28:01] (the Act).
Aggrieved, the first respondent filed an application in the court a quo for the review of the determination of the second respondent.
SUBMISSIONS IN THE COURT A QUO
The first respondent argued as follows:
The second respondent acted irregularly by declining jurisdiction. It effectively abdicated its statutory duty to determine and finalize a retrenchment process. It further acted irregularly by directing that the matter be referred to a Labour Officer, when a Labour Officer has no statutory powers to quantify a retrenchment package. The referral was ultra vires the provisions of the Labour Act, and, as such, unlawful.
In response, the appellant argued as follows:
The second respondent did not abdicate its statutory duties. The statutory duties were exercised and exhausted when the second respondent made recommendations to the Minister, which recommendations were accepted by the Minister.
Further, the Labour Act did not empower the second respondent to deal with a matter that had already been determined by the Minister. The second respondent lacked the power to make determinations on the quantum of the retrenchment packages awarded by the Minister. The first respondent ought to have appealed against the decision of the Minister or subjected the same for review. The appellant averred, that, the payment of the package was done with the agreement of the first respondent.
DETERMINATION BY THE COURT A QUO
The court a quo found, that, section 12C(2) and (3) of the Labour Act gives the Retrenchment Board the power to regulate the retrenchment package. It found, that, contrary to what the second respondent stated in its letter dated 12 October 2015, the dispute in question was about the quantification of the retrenchment package and not about the conditions of employment. The court a quo also found that Labour Officers have no jurisdiction over retrenchment issues, and the second respondent erred in referring the matter to the Labour Officer.
It granted the application.
Aggrieved, the appellant filed the present appeal on the following grounds:
GROUNDS OF APPEAL
“1. The court a quo erred at law in relying on section 12(2) of the Labour Act [Chapter 28:01], as currently worded, notwithstanding that this was not the law at the time the retrenchment process between the parties was carried out.
2. The court a quo erred in holding that section 12C of the Labour Act, as currently worded, gave the second respondent jurisdiction to deal with the issues referred to it by the first respondent.
3. The court a quo grossly erred in failing to determine issues that were placed before it, viz:
(i) Whether the process that culminated in the payment of the disputed retrenchment package could bar the first respondent from challenging the retrenchment exercise.
(ii) Whether the Retrenchment Board had exhausted its powers after making recommendations during the initial proceedings.
4. The court a quo erred at law in finding as it did, that, the powers of a Labour Officer, under section 93(1) of the Labour Act [Chapter 28:01], excluded the power to preside over matters which have a retrenchment background.
5. The court a quo erred at law in holding as it did, that, the Retrenchment Board was empowered to determine the issue referred to it by the first respondent after the Minister had exercised his powers in terms of the then section 12C(9) of the Labour Act [Chapter 28:01] to make a determination of the matter and set the terms of the retrenchment.
6. The court a quo erred at law in failing to hold, that, after the Minister had exercised his powers in terms of the then section 12C(9) of the Labour Act [Chapter 28:01], the Retrenchment Board could no longer exercise any jurisdiction on a retrenchment matter, and, more specifically, quantify the retrenchment package as was requested of it by the First Respondent.
7. The court a quo erred and misdirected itself at law in failing to hold, that, the determination by the Minister had resolved the issue that the first respondent requested the second respondent to deal with, having determined that the retrenchment package was to be paid on the basis of the first respondent's salary.”
SUBMISSIONS MADE BEFORE THIS COURT
Counsel for the appellant addressed the Court on the merits.
He argued, that, the first respondent erred in citing the second respondent as the substantive respondent a quo when the second respondent is not a legal persona. The application was therefore void. He ought to have cited the Chairperson of the Board.
This point was being raised for the first time without notice, it not having been raised in the court a quo.
Counsel conceded, that, he was aware of this Court's judgment in Mapondera and 55 Ors v Freda Rebecca Gold Mine Holdings Limited SC81-22 to the effect, that, the question of the proper citation of the name of a party is a technical issue which does not vitiate proceedings.
Secondly, he argued that the court a quo did not determine issues that were placed before it, and, these issues were:
(i) That, the first respondent waived its right to challenge the quantification of the retrenchment package after having accepted and received the package, which included a vehicle issued to him by the appellant during the subsistence of the contract of employment;
(ii) There was a fatal non-joinder of the Minister who had approved the recommendations of the second respondent and stipulated the retrenchment package; and
(iii) The fact that the second respondent was functus officio after it had made its recommendations to the Minister.
Thirdly, it was argued that the court a quo, in remitting the matter to the second respondent for quantification of the retrenchment package, misdirected itself in relying on section 12C(2) of the Labour Act as presently worded.
It was submitted, that, the section was promulgated on 26 August 2015, after the cause of action had arisen in September 2014 and after the Minister had, on 2 March 2015, already approved the recommendations of the second respondent and communicated the approval to the parties.
The section does not have retrospective effect.
It was argued, that, the old section 12C, which was applicable when the Minister made his decision, did not give the second respondent jurisdiction to quantify retrenchment packages. It was contended, that, the court a quo grossly misdirected itself in relying on the wrong law.
It was submitted that the court a quo ought to have dismissed the application with costs.
Regarding the cross appeal, counsel submitted that there was no proper appeal before the Court because the first respondent had not obtained leave to appeal from the court a quo, as required by the Labour Act. As such, he prayed for the cross-appeal to be struck off the roll.
In response, the first respondent argued that the second respondent was a statutory body, and, as such, had the capacity to sue and be sued in its own right. It was therefore properly cited as a party in the court a quo.
He submitted, that, his retrenchment was a nullity on the basis that the appellant did not give notice to retrench him as is required in terms of section 6 of the Labour Relations Retrenchment Regulations, 2003 (S.I.186/2003) (Regulations). He contended that the notice by the Minister retrenching him was addressed to Old Mutual Limited. It did not relate to him because his employer was the appellant, Old Mutual Shared Services (Private) Limited and not Old Mutual Limited.
He further argued, that, there was no evidence on record to show that the second respondent made any recommendation on his retrenchment to the Minister. In the absence of such proof, the decision by the Minister was a nullity.
The first respondent submitted, that, the court a quo correctly held that Labour Officers do not have jurisdiction over retrenchment disputes.
He further submitted, that, the process leading to the retrenchment was irregular for failure to comply with the peremptory provisions of section 12C of the Labour Act which require the second respondent to appoint an authority to superintend over the dispute between the parties. He argued that section 12C, as promulgated on 26 August 2015, has retrospective effect to 15 July 2015 and was applicable to the dispute between the parties. The second respondent made its decision on 6 August 2015. The decision therefore properly fell within the period after 15 July 2015.
The first respondent disputed waiving his rights to challenge his retrenchment.
He submitted that he has consistently argued that his contract of employment was unlawfully terminated without notice.
He conceded, that, he received the retrenchment package and vehicle. He however argued that he did so on a without prejudice basis as he was entitled to his contractual rights until lawful termination of his contract of employment.
He further argued, that, he was still an employee of the appellant, that his contract of employment had not been terminated, and, further, that he had not agreed to any terms of retrenchment.
Regarding the validity of the cross appeal, the first respondent submitted that he was entitled to file a cross-appeal in terms of Rule 45 of the Supreme Court Rules 2018 once the appellant noted its appeal. He submitted that the Supreme Court Rules are derived from section 34 of the Supreme Court Act and are therefore on the same footing as an Act of Parliament. He argued that section 92F(2) of the Labour Act does not therefore apply to a cross appeal.
ISSUES FOR DETERMINATION
The following issues fall for determination:
1. Whether or not there was a cross-appeal before the court.
2. Whether or not the second respondent was properly cited, and, if not, whether there was a valid application before the court a quo.
3. Whether or not the second respondent erred in declining jurisdiction.
4. Whether or not the court a quo erred in relying on section 12C(2) of the Labour Act [Chapter 28:01].
5. Whether or not the first respondent waived his right to challenge his retrenchment.
6. Whether or not the court a quo erred by failing to determine issues placed before it.
APPLICATION OF THE LAW TO THE FACTS
The appellant submitted, that, the court a quo's finding that the second respondent erred when it declined jurisdiction was flawed.
In arriving at that finding, the court a quo relied on section 12C(2) of the Labour Act, as presently worded, and found that the second respondent had jurisdiction to determine a dispute over a retrenchment package.
As correctly submitted by the appellant, the court relied on a wrong provision in establishing whether or not the second respondent had jurisdiction.
The following facts are common cause:
The dispute between the parties commenced sometime in June 2014. The appellant and the first respondent jointly referred the dispute between them to the second respondent on 10 September 2014. Section 12C(2) was substituted by the Labour Amendment Act 2015 (No.5 of 2015). The amendment Act was promulgated on 26 August 2015. The Minister acted on the recommendations by the second respondent on 2 March 2015 - before the amendment had been promulgated.
Section 12C(2) of the Labour Act reads as follows:
“(2) Unless better terms are agreed between the employer and employees concerned or their representatives, a package (hereinafter called 'the minimum retrenchment package') of not less than one month's salary or wages for every two years of service as an employee (or the equivalent lesser proportion of one month's salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment (whether the loss of employment is occasioned by retrenchment or by virtue of termination of employment pursuant to section 12(4a)(a), (b) or (c)), no later than date when the notice of termination of employment takes effect.”
In terms of section 12C(2), as amended by the Labour Amendment Act 2002 (No.17 of 2002), the power to determine whether an employee should be retrenched, and on what retrenchment package, was vested in a Works Council or an Employment Council. It read:
“A works council or employment council to which notice has been given in terms of subsection (1) shall forthwith attempt to secure agreement between the employer and employee concerned or their representatives as to whether or not the employee should be retrenched, and, if they are to be retrenched, the terms and conditions on which they may be retrenched, having regard to the considerations specified in subsection (11).”
It follows, that, as at the time the matter was referred to the second respondent, it did not have power to consider the retrenchment package due to an employee who is being retrenched.
The first respondent submitted, that, the amended section 12C had retrospective effect. He relied for the submission on section 18 of Act No.5 of 15 which states, that, section 12 shall apply to every employee whose services were terminated on three months notice on or after 17 July 2015.
It therefore follows, as rightly submitted by the first respondent, that, the amendment has a retrospective effect covering employees whose services were terminated on or after 17 July 2015.
The retrenchment of the first respondent was approved by the Minister on 2 March 2015 and with effect from 23 February 2015. The first respondent did not, therefore, fall in the category of employees covered under section 18 of Act No.5 of 2015.
It follows, that, the court a quo grossly misdirected itself in relying on the wrong law in reaching its decision that the second respondent had the jurisdiction to consider the first respondent's retrenchment package.
In Bell v Voorsitter Van Die Rasklassifikasieraad En Andere 1968 (2) SA 678 (A) it was remarked that:
“It is clear that our law accepts the rule that, where a statutory provision is amended, retrospectively or otherwise, while a matter is pending, the rights of the parties to the action, in the absence of a contrary intention, must be decided in accordance with the statutory provisions in force at the time of the institution of the action.”
See also Rutsate v Wedzerai & Ors SC45-22.
The court a quo was therefore enjoined to rely on the legislation prevailing as at the time the retrenchment proceedings commenced.
It is trite that reliance on the wrong law does not yield a valid judgment: see Madzokere & Ors v The State SC71-21.
The judgment of the court a quo cannot therefore stand.
The court's finding, that, the second respondent did not have jurisdiction to determine the first respondent's request for re-quantification of the retrenchment package is dispositive of this appeal. It is therefore not necessary to determine issues 4, 5 and 6.
