REPORTABLE ZLR (37)

Judgment No. SC 42/04

Civil Appeal No. 63/02

AFRICAN GOLD ZIMBABWE (PRIVATE) LIMITED v

A     DUBE AND ONE HUNDRED AND FIFTY-SEVEN OTHERS

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, CHEDA JA & MALABA JA

HARARE, MAY 6 & JULY 27, 2004

R Y Phillips, for the appellant

C M Jakachira, for the respondents

CHEDA JA: The appellant is a gold mining company and the respondents were its employees.

In December 1999 the appellant found itself in what it called serious financial problems and decided to retrench some of its workers. A meeting of the appellant’s Works Council was called and it was decided that the respondents should be retrenched from employment with effect from 31 January 1999.

The parties failed to agree on the retrenchment packages for each employee. The dispute was referred to the Retrenchment Committee in terms of s 6 of the Labour Relations (Retrenchment) Regulations, 1990. Recommendations were made to the Minister of Public Service, Labour and Social Welfare (“the Minister”), who approved the following package for each retrenchee –

(a) three months’ salary severance pay;

(b) relocation allowance - $5 000.00;

(c) $50 for each year served;

(d) disturbance allowance - $3 500.00;

(e) one month’s salary notice pay; and

(f) other terminal benefits.

The appellant was not happy with the Minister’s decision and took the matter to the Labour Relations Tribunal. It raised the following complaint:

“The Minister misdirected herself in that she failed to take into account that it was in financial dire straits.”

The appellant submitted various statements of its accounts and correspondence from its banks to support its allegation of serious financial problems. The statements show losses made by the appellant. There were also threats to close the accounts, dishonour cheques and also threats of court action. There is therefore no doubt that the appellant could not continue to operate. Auditors’ reports pointed out that there were excess liabilities over assets. The appellant said some mines were sold but no funds were generated. Some of the appellant’s bank accounts were overdrawn.

When authority to retrench was sought, the appellant’s retrenchment committee recommended the following package –

(a) three months salary severance pay $4 402.08

(b) relocation allowance $5 000.00

(c) $50 for each year of service (50 x 18) $900.00

(d) disturbance allowance $3 500.00

(e) notice pay $1 467.36

_________

TOTAL $15 269.44

_________ .

The employees recommended the following –

(a) six months salary severance pay $8 804.16

(b) relocation allowance $5 000.00

(c) inconvenience allowance $3 500.00

(d) notice pay $1 467.46

_________

TOTAL $28 772.62

_________ .

On the other hand, the appellant was offering the following package –

(a) three months salary severance pay $4 402.08

(b) relocation allowance $250.00

(c) $50 bonus for each year as bonus served (50 x 18) $900.00

(e) one month’s salary notice pay $1 467.36

_________

TOTAL $7 019.44

_________ .

The offer by the appellant is about half of the amount recommended by the retrenchment committee and about one-third of the amount claimed by the employees.

The Minister approved the retrenchment package submitted by the appellant but with the following adjustment –

(b) relocation allowance $5 000.00 instead of $250.00.

The Minister also said the employees were to be paid, in addition, other terminal benefits such as leave pay, gratuity/pension, etcetera, where applicable.

It will be seen from the above that the difference between what the Minister approved and what the appellant had offered is very small. However, the appellants alleges that the Minister failed to pay regard to the fact that the appellant was in serious financial difficulty.

When asked where the appellant would source the funds that it offered, the appellant pointed out that another mine, Inez Mine, was working and generating money. The appellant did not show or allege that Inez Mine could only afford what it was offering and not more, bearing in mind that the difference was very small.

I do not agree with the submission that the Minister failed to take into account the financial position of the appellant because, while she could have approved the package recommended by the employees or the retrenchment committee, she chose a package as close as possible to the package offered by the appellant.

There is, therefore, no basis for alleging that she did not consider the difficult financial position of the appellant.

As I said earlier, there is nothing to show that the appellant could not get a little more from the other mine. The suggestion that the other mine is controlled by different people does not assist, as we have been told that this mine is in a position to assist the appellant financially.

It is not correct to say that the appellant in this case had “virtually zero cash flow”, as was observed by McNALLY  JA in Continental Fashions v Mupfuriri & Ors 1997 (2) ZLR 405. The appellant has revealed that, although it may have no funds of its own, it is able to source funds from another mine of the same company.

The Tribunal did not just hear the matter as an appeal. It heard evidence, and had the appellant’s statements of accounts for consideration, before it made its decision.

I find that there is nothing that can be said to be grossly unreasonable in the decision made and, as such, there was no misdirection.

Accordingly, there is no merit in the appeal and it is dismissed with costs.

CHIDYAUSIKU  CJ: I agree.

MALABA JA: I agree.

Y A Mukadam, appellant's legal practitioners

Jakachira, Gahadzikwa & Partners, respondents' legal practitioners