REPORTABLE (36)

Judgment No. SC 42/03

Civil Appeal No. 201/01

POSTS AND TELECOMMUNICATIONS CORPORATION

v P G SWABATA

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, ZIYAMBI JA & MALABA JA

HARARE, SEPTEMBER 9 & NOVEMBER 28, 2003

H Zhou, for the appellant

A M Gijima, for the respondent

MALABA JA: This is an appeal against an order of the Labour Relations Tribunal (“the Tribunal”) dated 11 June 2001, the terms of which were as follows:

“That the respondent (now the appellant) be and is hereby ordered to pay the applicant damages in lieu of reinstatement equivalent to his salary and benefits from the date of dismissal to the date he would have been retrenched had he remained in employment plus the retrenchment package he would have been paid had he not been unlawfully dismissed less whatever he could have earned as a tractor driver up to the time of retrenchment.

In the event of any dispute arising as to the actual calculation of any amount either party is free to approach the Tribunal for quantification of the amount in dispute.

The respondent is to bear the costs of these proceedings.”

I will refer to the parties as “the PTC” and “Swabata”.

The order of the Tribunal was made following a declaration by the Tribunal on 28 March 2000 that the dismissal of Swabata by the PTC on 15 April 1996 was wrongful. The PTC had on 28 March 2000 been ordered to reinstate Swabata in his job as a clerk without loss of salary or benefits or pay him damages in lieu of reinstatement. The parties had been given the opportunity to agree on the quantum of damages, failing which either party had the right to refer the question of assessment of the damages to the Tribunal.

The PTC elected to pay Swabata damages but failed to agree on the measures for their calculation. The matter was referred to the Tribunal, not for assessment of the damages, but for a declaration of the principles to be applied in the calculation of the amount of the damages.

At the hearing before the Tribunal Swabata gave evidence. He indicated that at the time of his dismissal from employment he worked for the PTC in Kwekwe as a clerk. He has three “O-Levels” and a Class 2 driver’s licence. He was aged fifty years at the time of giving evidence.

It was Swabata’s evidence that during the period of dismissal from employment he looked for a job as a clerk without success. He attended an interview for a clerical job with Alcatel in November 1996 but never received communication of the results thereof. He made numerous applications for clerical jobs in newspapers, only to receive regrets. Mr Swabata could not produce the letters of regret when challenged to do so during cross-examination. It was his belief that he could not get alternative employment as a clerk because of his old age, low educational qualifications and closure of companies.

Mr Swabata disclosed that during the same period he occasionally worked as a tractor driver at his brother’s farm, for which he would be given a bag of mealie meal and cash varying between $500 and $1 000 per month.

Mr Swabata also disclosed that workmates who were younger than him were retrenched by the PTC in December 1999. They had been given retrenchment packages calculated on one-and-a-half months’ salary multiplied by the number of years of service. He said he would have accepted an offer to be retrenched had he been in employment with the PTC at the time. As a result Swabata claimed damages in an amount equivalent to the retrenchment package he would have received had he been in employment.

The PTC opposed Swabata’s claim. It argued that a clerk with Swabata’s educational qualifications and experience would reasonably have been expected to obtain alternative employment as a clerk within one year of his dismissal. The fact that he did not land a job as a clerk and failed to produce the letters of regret indicated that he did not look for alternative employment. It also argued that the retrenchment package received by Swabata’s former workmates had no bearing on the assessment of the amount of damages which resulted from his wrongful dismissal. A retrenchment package was not a direct or probable consequence of wrongful termination of employment.

In the first paragraph of his judgment the chairman of the Tribunal stated that the parties had asked the Tribunal:

“… to first determine the principle upon which the amount is to be calculated. Thereafter if there is a dispute regarding the actual calculation the Tribunal will be asked to settle the dispute.”

The question for determination by this Court is whether or not the learned chairman of the Tribunal ordered the parties to apply the correct principles in calculating the amount of damages payable to Swabata.

The PTC’s contention is that the Tribunal directed them to apply wrong principles. Mr Gijima had suggested that the appeal by the PTC was on a question of fact. I agree with Mr Zhou that the appeal is on a point of law. The contention is that by ordering the parties to assess the amount of damages payable to Swabata by reference to the amount of salary and benefits he would have earned from the date of his wrongful dismissal to the date he would have been retrenched had he remained in employment plus the retrenchment package he would have been paid had he not been unlawfully dismissed, the learned chairman of the Tribunal misdirected himself in law as to the criteria to be taken into account in assessing the damages.

The first principle to be borne in mind for purposes of assessing damages in such cases is that the damages should be the direct or probable consequence of the wrongful dismissal of the employee from employment. The measure of the damages is the amount of wages or salary and benefits the employee would have been entitled to receive but for the wrongful termination of employment. The damages are assessed from the date of wrongful dismissal to the date of the order of reinstatement.

In Gauntlet Security Services (Pvt) Ltd v Leonard 1997 (1) ZLR 583 (S) GUBBAY  CJ said at 586 C-E:

“The employee is entitled to be awarded the amount of wages or salary he would have earned save for the premature termination of his contract by the employer. He may also be compensated for the loss of any benefit to which he was contractually entitled and of which he was deprived in consequence of the breach.”

The general principle regarding the measure of damages flowing from wrongful dismissal where reinstatement is not an acceptable option was again stated in Ambali v Bata Shoe Company Ltd 1999 (1) ZLR 417 (S), where it is stated in the headnote that:

“Where a person has been wrongfully dismissed (rather than wrongfully suspended) from his employment, and seeks damages rather than reinstatement, he is entitled to be awarded the amount of wages or salary he would have earned had his contract not been prematurely terminated. He may also be compensated for any loss of benefit to which he was entitled and of which he was deprived as a result of the wrongful termination.”

On the use of “back-pay” as the measure for the damages to be awarded the employee McNALLY  JA, in Leopard Rock Hotel Company (Pvt) Ltd v van Beek 2000 (1) ZLR 251 (S) at 255H-256B, said:

“’Back-pay’ is thus a concept associated with reinstatement. If an employee is reinstated she will normally be awarded back-pay. If she succeeds in proving wrongful dismissal, but is not reinstated, she will be entitled to ‘damages’, a major element of which will be back-pay. Perhaps more correctly one should say the damages will be assessed by reference to the back-pay lost.”

There is another important principle to be taken into account in the assessment of the damages in lieu of reinstatement of an employee wrongfully dismissed. It is that the employee must mitigate his damages immediately after he is wrongfully dismissed. In other words, evidence of what the employee did after he was dismissed from employment by way of looking for alternative employment has a direct bearing, not only on the extent of the damages to be awarded, but also whether he is entitled to any damages at all.

In the Gauntlet Security case supra GUBBAY  CJ went on, after stating the general principles, to say:

“But the employee must mitigate his loss. He cannot just do nothing. See Faberlan v Mckay & Fraser 1920 WLD 23 at 32; Bulner v Woollen Ltd (in liquidation) 1926 CPD 459 at 467-468; Beeton v Peninsula Transport Co (Pty) Ltd 1934 CPD 53 at 59. If he fails to take other employment when it would have been reasonable for him to do so a deduction will be made in respect of the remuneration he would have earned from the substituted employment.”

In Ambali’s case supra McNALLY  JA said at 418H-419D:

“I think it is important that this Court should make it clear once and for all that the employee who considers, whether rightly or wrongly, that he has been unjustly dismissed is not entitled to sit around and do nothing. He must look for alternative employment. If he does not his damages will be reduced. He will be compensated only for the period between his wrongful dismissal and the date when he could reasonably have expected to find alternative employment. The figure may be adjusted upwards or downwards. If he could in the meanwhile have taken temporary or intermittent work, his compensation will be reduced. … if an employee is wrongfully dismissed his duty to mitigate his loss arises immediately. If he is offered a good job the day after his dismissal he must take it or forfeit any claim for damages.”

The obligation on the employee is to look for and take alternative employment if available. The onus is on the employer to show that the employee did not look for alternative employment or that he did not take up a good job when it was offered to him. Should there be no evidence to refute the employee’s evidence that he looked for employment without success he would be entitled to be awarded the amount of the salary and benefits he would have earned from the date of wrongful dismissal to the date of the order for reinstatement less what he may have earned in temporary or intermittent employment.

In Nyaguse v Mkwasine Estates (Pvt) Ltd 2000 (1) ZLR 571 (S), it was held that if the employee had remained jobless, equity demanded that the employer be the loser because he would have been the one in the wrong.

It is, therefore, only where there is evidence that the employee did not look for alternative employment that the damages would be calculated from the date of wrongful dismissal to the date he would reasonably have been expected to find alternative employment. The Tribunal must in that event have evidence adduced and make a definite finding on when the employee could reasonably have expected to find alternative employment. See Clan Transport Company (Pvt) Ltd v Clan Transport Workers Committee S-1-02 at p 3.

I turn to the facts of this case. The chairman of the Tribunal found on the evidence adduced by Swabata that he looked for alternative employment with no success. That is a finding of fact by the Tribunal which had the advantage of seeing Swabata give oral evidence and believed him. The finding is not grossly unreasonable. Having made that factual finding, the learned chairman ordered that the damages payable to Swabata should be calculated from the date of wrongful dismissal to a date he would have been retrenched had he remained in employment.

The learned chairman of the Tribunal misdirected himself on the principle that the employee who is found to have done everything possible to look for alternative employment with no success should be awarded the amount of salary and benefits from the date of wrongful dismissal to the date of the order for reinstatement. The order he made, that Swabata be awarded an amount of salary and benefits he would have received from the date of wrongful dismissal to the date he would have been retrenched, is very vague. There is no principle on the calculation of damages for breach of a contract of employment which makes reference to a date the employee would have been retrenched. The reason is that it would not be known whether the employee would have been retrenched and when that would have happened. In any case, retrenchment is not an entitlement. It is not something the employee would have lost by reason of wrongful dismissal to which he was contractually entitled.

In my view, the learned chairman also misdirected himself in ordering the PTC to award to Swabata an amount equivalent to a retrenchment package he would have received had he been in employment. The retrenchment package would not be a direct or probable consequence of the wrongful termination of employment. The employee would not have been entitled to be retrenched.

The best course to take is to set aside the order made by the Tribunal and substitute in its place an order reflective of the correct principles to be applied in the assessment of the damages payable to Swabata.

The appeal succeeds with costs. The order of the Tribunal is set aside and in its place substituted the following –

“The respondent is hereby ordered to pay the applicant damages in lieu of reinstatement in the amount of the salary and benefits which would have been paid to him from the date of wrongful dismissal (15 April 1996) to the date of the order of reinstatement (28 March 2000) less whatever amounts he earned during the periods of temporary employment as a tractor driver.

In the event of any dispute arising from the actual calculation of any amount either party is free to approach the Tribunal for assessment of the amount in dispute.

The respondent is to bear the costs of these proceedings.”

CHIDYAUSIKU CJ: I agree.

ZIYAMBI JA: I agree.

Coghlan, Welsh & Guest, appellant's legal practitioners

Gill, Godlonton & Gerrans, respondent's legal practitioners