DISTRIBUTABLE
(54)
Judgment
No. SC 44/03
Civil
Appeal No. 363/02
P
G INDUSTRIES (PRIVATE) LIMITED v NKULULEKO MABHENA
SUPREME
COURT OF ZIMBABWE
SANDURA
JA, MALABA JA, GWAUNZA JA
HARARE,
OCTOBER 2 & NOVEMBER 28, 2003
E
Matinenga,
for the appellant
T
Biti,
for the respondent
MALABA
JA: The respondent (Mabhena) was employed by the appellant (P
G Industries) on a contract of service which provided
that it was
terminable by either party on one months notice. Mabhena alleged
that he was employed as a sales and marketing manager
but PG denied
his claim, alleging instead that he was employed as a customer
service manager. For the purposes of this appeal I
shall proceed on
the basis that he was employed as a customer service manager.
By
letter dated 8 May 2000 Mabhena was given notice of termination of
his employment with PG Industries on 31 July 2000.
The letter
written by the Chief Executive Officer read:
1. As a result of the
reorganised structures and your performance, we are unable to place
you within our operations.
2. You are therefore put on
notice to terminate your services with PG Industries (Zimbabwe)
Limited on 31 July 2000.
On
7 July 2000 Mabhena commenced review proceedings in the High Court,
challenging the lawfulness of the decision to terminate his
contract
of employment on notice. He contended that PG Industries
should have terminated his employment in terms of its registered
code
of conduct which applied to him. He also claimed an order against
PG Industries for the payment of an amount of $3 192 803.00
which he said he ought to have received as salary and bonus when he
allegedly was promoted to the position of sales and marketing
manager.
PG Industries
denied that Mabhena was promoted to the position of sales and
marketing manager. It denied any indebtedness to
him in the amount
claimed. On the termination of his contract of employment
PG Industries contended that the decision to terminate
was
lawful as it was an exercise of a contractual right.
The
lawfulness of the decision by PG Industries to terminate the
contract of employment with Mabhena on notice was questioned
before
the High Court because of the effect of s 1A of the Labour
Relations (General Conditions of Employment) (Termination
of
Employment) Regulations, SI 377/90 on ss 2 and 3 of the Labour
Relations (General Conditions of Employment) Regulations SI 371/85.
Statutory
Instrument 371/85, enacted in December 1985, provided that:
2 (1)
No employer shall, summarily or otherwise, terminate a contract of
employment with an employee unless -
(a) he has obtained the prior
written approval of the Minister to do so.
(b)
(c)
(d)
3 Where an employer has good
cause to believe that an employee is guilty of:
(a)
(b)
(Acts
of misconduct listed):
the employer
may suspend such employee without pay and other benefits and shall
forthwith apply to a labour relations officer for
an order or
determination terminating the contract of employment.
The cases of
Art
Corporation Ltd v Moyana
1989 (1) ZLR 304 (S) at 308G309B and Commercial
Careers College (1980) (Pvt) Ltd v Jarvis
1989 (1) ZLR 344 (S) at G-H had decided that the effect of
subs (1)(a) of s 2 of SI 371/85 was that a contract of
employment could not be terminated by giving the requisite notice in
accordance with the terms of a contract of employment without
obtaining prior written approval of the Minister.
On 7
December 1990 SI 371/85 was amended by the insertion of s 1A
through SI 377/90. It provided that:
Sections 2 and 3 shall not
apply to employees to whom the provisions of an employment Code of
Conduct registered in terms of section
3 of the Labour Relations Act
(Employment Codes of Conduct) Regulations 1990 apply.
PG Industries case in the High
Court was that the effect of s 1A of the Regulations was that it
had a contractual right to
terminate the contract of employment with
Mabhena provided it gave him the requisite months notice.
The
learned judge held that the appellant had in its letter of
termination given poor performance or incompetence on the part of
Mabhena and reorganisation as the reasons for its decision to
terminate the contract of employment. As PG Industries was
terminating
Mabhenas employment on allegations that he was unable
to do the work he held himself capable of doing satisfactorily, the
court
a quo held that it had to follow the procedure for the
termination of employment prescribed in the Code of Conduct.
The
court a quo held that terminating an employees contract of
employment because of the re-organisation of the business was
retrenchment.
It considered the effect of s 10 of the Labour
Relations (Retrenchment) Regulations SI 404 of 1990 which
provided that:
For the avoidance of doubt, it
is declared that any purported retrenchment of an employee which is
carried out otherwise than in accordance
with an approval in terms of
these regulations shall be of no effect whatsoever.
It was common cause that PG
Industries had not followed the procedure laid down in SI 404/90
in terminating Mabhenas employment.
The learned judge held that
the termination was unlawful.
On
the claim for the payment of the amount of $3 192 803 the court
a quo found that there was a dispute of facts which Mabhena
should
have foreseen before proceeding by way of an application. The claim
was dismissed instead of being referred to trial.
The order granted was that:
1. The respondents decision
to terminate the applicants contract of employment be and is
hereby declared to be null and void.
2. The applicant be reinstated
without loss of salary and benefits from 1 June 2000 to the date of
reinstatement.
3. The applicants claim for
payment of the sum of $3 192 803 being in respect of
underpayment of salary and bonuses
be and is hereby dismissed.
4. The respondent is to pay 50%
of the applicants costs.
PG Industries appealed against
the part of the order declaring its decision to terminate the
contract of employment with Mabhena null
and void.
Mabhena cross-appealed against
the part of the order dismissing his claim for the payment of the sum
of $3 192 803. He alleged
that the appropriate order should
have been a referral of the claim to trial.
Before
this Court Mr Biti conceded on the authority of Mashingaidze v
Mashingaidze 1995 (1) ZLR 219 (H) that the question whether
to
dismiss an ill-founded application or refer it to trial was a matter
entirely within the discretion of the court seized with the
application. In Mashingaidzes case supra ROBINSON J held
that it was sometimes necessary for a court to dismiss such an
application to discourage:
the
too often recurring practice whereby applicants, who know or should
know that real and substantial disputes of fact will arise
or are
likely to arise on the papers, nevertheless resort to application
proceedings on the basis that, at worst, they can count
on the court
to stand the matter over for trial.
Although
he did not abandon the cross-appeal, Mr Biti indicated that he
could not press the point that the learned judge erred
in dismissing
the application for an order for payment of the amount claimed as
underpaid salaries and bonuses. The cross-appeal
had no merit.
I
turn to consider the main appeal. Mr Matinenga cited the
recent judgment of this Court in Chirasasa and Ors v Nhamo N.O.
and
Anor S-135-02 as authority for the submission that the learned judge
erred in holding that the decision by PG Industries
to terminate
Mabhenas contract of employment was null and void and ordering his
re-instatement. A full bench of this Court held
in Chirasasas
case supra that the effect of s 1A of the Regulations was to
remove the obligation on an employer to obtain
prior written approval
of the Minister as a procedural requirement for the termination of a
contract of employment on notice where
there was a registered
employment Code of Conduct applicable to the employee, thereby
creating two distinct methods of termination;
one on notice in terms
of the contract of employment and the other in terms of the Code of
Conduct.
At
pp 1011 of the cyclostyled judgment it is stated:
So, when it removed the
obligation to obtain the prior written approval of the Minister as a
procedural requirement for the termination
of a contract of
employment on notice, s 1A of the Regulations introduced the
procedure contained in the employment Code of
Conduct as the method
of termination of the contract of employment where the disclosed or
undisclosed reason thereof was misconduct
on the part of the
employee.
Where there was no allegation of
misdemeanour, the effect of s 1A of the Regulations was that the
employer had a right to terminate
the contract of employment on
notice, as long as the employee was one to whom the provisions of the
registered code of conduct applied.
The legal effect of s 1A of
the Regulations was that a contract of employment could be terminated
on notice for any reason
other than those relating to misconduct.
At
p 14 it is stated:
It
is clear from the incorporation of the Code of Conduct into the
procedural requirements for the termination of contract of employment
that the intention
of the legislature was that where misconduct was involved, or the
decision to terminate was of a disciplinary nature, the employer
was
bound to comply with the disciplinary procedure prescribed in the
code of conduct.
We
cannot ignore the letter of termination of Mabhenas employment.
PG Industries gave as one of the reasons for the termination
the
alleged incapacity on the part of Mabhena to perform his duties
satisfactorily. It had made a finding of fault in the performance
of his duties and acted on it as the reason for terminating his
employment. Not only was PG Industries casting aspersions
against the reputation of the employee but went on to invoke a
procedure for termination of employment which did not give him an
opportunity to defend himself against accusation of incompetence.
The
parties agreed that the Code of Conduct in question made it an act of
misconduct for an employee to hold himself as being in
possession of
skills he did not have. Mr Biti argued that in accusing Mabhena of
poor performance PG Industries was in effect
alleging that he
held himself to be in possession of skills he did not have.
I
agree with Mr Biti that on the authority of Chirasasas case
supra PG Industries was bound to follow the disciplinary
procedure provided for in its Code of Conduct. That procedure
secured for Mabhena the right to be heard in defence of his
reputation.
The facts on which PG Industries concluded that he was
incapable of performing his duties satisfactorily had to be disclosed
to
him so that the reasonableness of its attitude could be tested.
The learned judge was correct in holding that the decision to
terminate
Mabhenas contract of employment on notice was in the
circumstances unlawful. The decision was not based on the exercise
of a
contractual right to terminate on notice but on the finding that
Mabhena was not capable of doing the work he contractually bound
himself to do.
Mr Matinenga
was unable to argue that terminating an employees employment
because of the re-organisation of the undertaking
did not constitute
retrenchment. It is common cause therefore that Mabhena would have
been retrenched without the mandatory procedure
prescribed in
SI 404/90 having been complied with. Section 10 of
SI 404/90 makes it very clear that retrenchment
of an employee
outside the statutorily prescribed procedure shall be of no effect
whatsoever. The termination of Mabhenas contract
of employment
would have been unlawful for the reason of non-compliance with the
mandatory retrenchment procedure.
Mr Matinenga
argued that the learned judge erred in ordering the reinstatement of
Mabhena. He said she should have granted
damages in lieu of
reinstatement. I do not agree. At common law the question whether
or not reinstatement of an employee should
be ordered is a matter for
the discretion of the court. The discretion has, of course, to be
exercised judiciously in accordance
with the circumstances of the
case. The learned judge was alive to the guiding principles stated
in Commercial Careers College
(1980) (Pvt) Ltd v Jarvis supra;
Winterton, Holmes & Hill v Patterson 1995 (2) ZLR 68 (S). After
citing these authorities the
learned judge said:
There
is in this matter no averment of a breakdown in the relationship
between the applicant and the respondent such that there is
no degree
of trust or respect remaining on either side. The applicant has
expressed his desire to be reinstated. There is no
evidence to show
that the blame for his dismissal is attributable to the applicant.
The respondent has spoken of a monetary settlement.
There is no
suggestion on the papers that reinstatement would not be practicable
in the circumstances.
I
can find no fault with the reasoning of the learned judge for the
exercise of the discretion vested in her.
The
main appeal is accordingly dismissed with costs. The cross-appeal
is also dismissed with costs.
SANDURA JA: I agree.
GWAUNZA JA: I agree.
Atherstone
& Cook, appellant's legal practitioners
Honey
& Blanckenberg, respondent's legal practitioners
