Judgment No. SC. 6/07

Civil Appeal No. 402/05

CATHERINE MOONO MUPOTOLA V SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

SUPREME COURT OF ZIMBABWE

ZIYAMBI JA, GWAUNZA JA & GARWE JA

HARARE, JANUARY 30, & May 28, 2007

H Zhou, for the appellant

S V Hwacha, for the respondent

ZIYAMBI JA: This is an appeal against a judgment of the Labour Court setting aside an arbitral award made in favour of the appellant.

The facts forming the background of the appeal are as follows-

On 19 October 2001 the respondent wrote to the appellant in the following terms:

“I am pleased to offer you, on behalf of the SADC Multi donor hub, the position Trade/SPS /Advisor effective 1 November 2001 to 31 October 2004. The terms of reference of the position and the contract are attached.

       For the duration of this assignment or until otherwise modified, your duty station shall be based in the SADC Food, Agricultural and Natural Resources Unit in Harare, Zimbabwe.”

Thereafter, on 21 October 2001, the parties signed a document which was termed a contract of employment (‘the first contract’).

Paragraph 4 of the first contract provided that the appellant’s salary “shall be paid as stipulated in the letter of appointment”. However, as will be seen from the letter of appointment, no salary was stipulated therein. That notwithstanding, it appears that the appellant commenced employment with the respondent on the basis of this letter of appointment.

On 9 January 2002, the appellant received a second letter of appointment. In that letter she was offered “a long-term consultancy appointment as Trade/SPS specialist of the SADC Food Security and Rural development Hub (hereinafter referred to as “the Hub” or “the Multidonor Hub”) another operating unit of the respondent. The period of employment stated therein was 1 December 2001 to 30 November 2002. The salary was stated to be 5 000 United States dollars per month inclusive of all benefits. The appellant, on 11 February 2002, indicated her acceptance of that offer of employment (“the second contract”) by signing an attached copy of the letter. It appears that by agreement, the period of employment was extended to 31 January 2003. Thereafter the respondent, citing funding problems, did not further extend or renew the second contract.

The appellant, dissatisfied with the respondent’s failure to extend the second contract, reported the matter to the Ministry of Public Service, Labour and Social Welfare, claiming that she had been unlawfully retrenched. The matter was referred to compulsory arbitration resulting in the following award:

“SADCC (sic) HUB is ordered to pay M Mupotola all outstanding salaries to date and up to 31 October 2004 as the fixed term contract to this date is valid and is still in force.”

The respondent noted an appeal to the Labour Court, which set aside the arbitral award on the basis that the second contract had novated the first contract which was therefore no longer of any force and effect.

The appellant took two points on appeal before us. They were as follows -

(a)   That the court a quo erred in finding that the second contract had novated          the first; and

(b)     That the court a quo erred in entertaining  the appeal from the arbitrator’s           decision when that appeal was not noted by a person with authority to do            so.

In support of the second contention Mr Zhou drew the Court’s attention to a letter from the Executive Committee of the SADCC secretariat which reads as follows:

“Mr M. Taqi Sharif

ARBITRATION AWARD

My letter dated 19 January 2004 on the above refers.

Ms Moono Mupotola has advised me that you could not pay her as directed because you were consulting with the Secretariat on the ruling of the labour tribunal.

As I am not aware of any consultation between you and the Secretariat on this matter, you are once again requested to pay Ms Moono Mupotola according to the ruling of the Administration Award.

I hope payment will be made to her without further delay.”

The learned President in the court a quo dealt with this issue thus:

“When the parties appeared before me on 18 October 2005, the evidence (the Executive Secretary’s letter), now being relied on by the respondent was not part of the record. The respondent cannot therefore be at liberty to bring new evidence through submissions. It was entirely open to the respondent to apply to this Court to be granted leave to file SADCC Statutes which would have indicated the powers of the Executive Secretary and the limitations of same on the part of the Regional Director. It is the Regions Office that dealt with the Respondent’s employment throughout and the Court is not aware whether or not the Regional Director’s powers were only limited to the hiring of staff. The appeal is therefore properly before the Court and the Executive Secretary’s letter of 30 January 2004 did not seek a withdrawal of the appeal. This Court cannot ask the appellant to withdraw.”

There was indeed no evidence before the court of the authority structures within SADC and, consequently, the significance of that letter. The appellant could have placed that evidence before the court if it chose to do so. Having elected not to place that evidence before the court, it was improper for the appellant’s legal practitioner to attach to his closing submissions a letter which did not form part of the record before the court in the expectation that the court would take that letter into consideration. I find no fault therefore with the ruling of the learned President on this issue.

I turn to consider the first issue which is whether or not the first agreement was novated by the second. Novation means “replacing an existing obligation by a new one, the existing obligation being thereby discharged”. See The Law of Contract in South Africa Third Ed by R H Christie at p 498.

The above definition presupposes that both the existing obligation and the new one arise out of valid contracts. “When parties novate they intend to replace a valid contract by another valid contract”. See Swadif (Pvt) Ltd v Dyke 1978 1 SA928 (A) at 940 quoted by Christie in the Law of Contract in South Africa, supra.

The starting point, therefore, in determining this issue is to consider whether the first agreement constituted a valid contract.

The first contract is silent on the issue of salary. The provision for the salary to be paid to an employee is a vital and essential term of a contract of employment. Failure to provide for the payment of a salary in my view renders the agreement null and void.

This being so, the first agreement was a non event and there could be no novation of a contract which did not exist. Accordingly, the only agreement which governs the parties is the second contract which constituted a valid contract of employment. It is common cause that the second contract terminated on 31 January 2003.

I have come to the same conclusion as the court a quo, namely, that the first agreement is of no force and effect, although for slightly different reasons. However, I see no reason to deprive the respondent of its costs.

In the result, I find no merit in the appeal and it is hereby dismissed with costs.

GWAUNZA JA: I agree.

GARWE JA: I agree.

Gill, Godlonton & Gerrans, appellant's legal practitioners

Dube, Manikai & Hwacha, respondent's legal practitioners