REPORTABLE ZLR (50)

Judgment No. SC 55/07

Civil Appeal No. 55/07

TOYOTA ZIMBABWE v RICHARD POSI

SUPREME COURT OF ZIMBABWE

MALABA JA, CHEDA JA & GWAUNZA JA

HARARE, OCTOBER 2, 2007 & MARCH 4, 2008

H Zhou, for the appellant

The respondent in person

MALABA JA:

This is an appeal from a judgment of the Labour Court dated 17 November 2006 setting aside the decision of the appellant to dismiss the respondent from employment following a conviction under a Code of Conduct of gross negligence in the performance of work. The Labour Court ordered that the case be remitted to the appellant for a penalty other than dismissal to be imposed.

The respondent was employed by the appellant as an assistant credit controller. His duties included the supervision of work done by cashiers and accounting assistants. Cashiers had to submit to him the cash which they would have received from the appellant’s customers after counting it together with the banking sheets in which they would have entered the amounts. They were also supposed to prepare and submit to the respondent bank deposit slips relating to the amount of money to be banked. It was the respondent’s duty to count the money and check the banking sheets and deposit slips prepared by his subordinates to satisfy himself that there was no money missing. He had to sign the banking sheet and deposit slip to certify that the money was as recorded therein before it was taken to the bank. On 18 December 2002 one of the cashiers received a total amount of $6 552 582.03. The banking sheets showed that this money had been received. The respondent signed the banking sheet to certify that, indeed, that amount of money had been received and receipted. On 31 December the accounts department discovered upon examination of the deposit slips for 19 December when the money was supposed to have been banked that it had been under-banked by an amount of $218 652.13.

On 7 January 2003, the respondent appeared before the Disciplinary Committee charged with the misconduct of negligence in the performance of work as defined in the Code of Conduct (“the Code”). He admitted that when the money and the documents were brought to him he did not count it, nor did he go through the banking sheets and deposit slips to satisfy himself that the amount of money recorded therein agreed with the cash. He had simply signed the banking sheets and deposit slip without paying attention to probable consequences of failure to strictly comply with the procedures for proper performance of his work. The respondent further admitted that as a result of his negligence, the appellant had suffered a serious financial loss. Having found the respondent guilty of the misconduct charged, the Disciplinary Committee was of the view that the facts showed that the degree of negligence committed was high, deserving the penalty of dismissal as a punishment. The respondent was accordingly dismissed from employment.

In deciding to impose the penalty of dismissal for what it considered to be gross negligence on the part of the respondent who had committed a first breach, the Disciplinary Committee took into consideration the provisions of s 2 of the Code. I set out here only those provisions of the sections that are relevant in the determination of the appeal. Section 2 provides:

“CLASSIFICATION OF OFFENCES

Depending on the severity of the offence committed, the following are provided:

2.1. MINOR BREACHES

1ST BREACH	2ND BREACH	3RD BREACH	4TH BREACH
Recorded Verbal Warning	First written warning valid for 3 months	Second written warning valid for 6 months	Final written warning valid for 12 months

2.2. MODERATE BREACHES

1ST BREACH	2ND BREACH	3RD BREACH
First written warning valid for 6 months	Final written warning valid for 12 months	Dismissal

2.3. SERIOUS BREACHES

1ST BREACH	2ND BREACH
Final written warning valid for 12 months and/or demotion and suspension without pay for up to 30 days	Dismissal

”

The offences that fell in a particular class of offences were listed below the relevant box. Negligence in the performance of work is listed as falling in the class of serious breaches. On the basis of the classification of the various acts of misconduct and the corresponding penalties, the respondent on appeal to the Managing Director against the decision of the Disciplinary Committee to dismiss him from employment contended that the Disciplinary Committee was bound to impose the penalty of a final written warning valid for 12 months and/or demotion and/or suspension without pay for up to 30 days as his was a first breach. The argument was that whether or not dismissal was, in the circumstances, an appropriate punishment for gross negligence in the performance of work, the Disciplinary Committee had no discretion in the matter of what penalty to impose.

The appeal was heard by the Financial Manager as the Managing Director had recused himself. The Financial Manager dismissed the argument by the respondent and upheld the decision of the Disciplinary Committee. He said:

“It is my view that the appellant’s conduct attracts the stiffest penalty available. In this regard I now have the discretion to award dismissal as the penalty, as did the Designated Official. It is my view that regard being had to the opening words at p 12 of the Code that I have the discretion depending on the severity of the offence to award what I consider to be a just penalty. To accept the appellant’s submissions that there is no discretion that is afforded to the Designated Official would lead to the ridiculous conclusion that this company has no authority to dismiss any of its employees on a first breach no matter how fundamental the offence would have been committed. By way of example that would mean that an employee can kill or rape another employee in full view of everyone and admit to the offence and he cannot be dismissed. Similarly it would mean that an employee can commit any of the serious offences in terms of the Code of Conduct and accept his wrongful conduct and cannot be dismissed. It is my view therefore that discretion on the penalty is available to the Designated Official depending on the severity of the offence, although a general guideline for penalties is provided.

The general penalty for negligence is that an employee can be given a final written warning valid for twelve months and/or demotion and/or suspension without pay for up to thirty days. Regard being had to this particular case and, as indicated above, the negligence exhibited by the appellant was gross and therefore severe which justifies a deviation from the ordinary penalties that would have been available to me. In these circumstances I agree with the designated official that the appellant be dismissed.”

The respondent appealed to the Labour Court where his contention that the Disciplinary Committee was bound by the classification of the offences and the penalties provided under s 2 of the Code to impose the penalty specified thereunder for a first breach regardless of the degree of seriousness of the commission of the offence was accepted by the learned President. The learned President was of the opinion that the words “depending on the severity of the offence committed, the following are provided” were explanatory of the basis on which the different penalties were provided in each class of offences according to whether the breach is a first breach or not. The effect of the reasoning adopted by the learned President was that the Disciplinary Committee was bound to impose the penalty indicated for a first breach regardless of the degree of seriousness of the offence revealed by the circumstances of its commission.

He said:

“The wording in the Code ‘depending on the severity of the offence’ does not change the prescribed penalties under clause 2.3. The latter clearly provides that a serious offence warrants dismissal on second breach. The wording relied on comes as a preface to all offences, that is minor, moderate and serious. In other words, read in that context, the words meant that the penalties depended on the severity or classification of the offence as minor, moderate or severe. The words do not give the respondent authority to impose a penalty more severe than the prescribed penalty.”

It appears to me that the learned President proceeded on the basis that s 2 was couched in clear and unambiguous language, the meaning of which the court was bound to give effect to regardless of the consequences. To the contrary s 2 of the Code is unhappily couched in vague and ambiguous language, giving rise to a problem of its construction to ascertain the intention of the parties to the Code. It is not usual to talk in terms of the “severity” of an offence. It is common to refer to the “severity” of a penalty to describe the intensity of the suffering the penalty is likely to bring on the person on whom it is imposed. I notice that the learned President used the words “serious” and “severe” interchangeably to describe the offences in the third class of the offences.

Where the words used are susceptible to more than one meaning as is the case with the language of s 2, it is the rule of construction that a court should avoid adopting the meaning which would lead to absurdity. Maxwell, Interpretation of Statutes, 12^th ed states at p 105:

“Before adopting any proposed construction of a passage susceptible of more than one meaning, it is important to consider the effects or consequences which would result from it, for they often point out the real meaning of the words. There are certain objects which the legislature is presumed not to intend, and a construction which would lead to any of them is therefore to be avoided.”

Before adopting the construction of the words “depending on the severity of the offence committed, the following are provided”, proposed by the respondent, I look at the consequences which would result from it. In the class of offences described as serious breaches are found the following offences I have selected at random -

1. Unauthorised statements to the Press, or unauthorised public communication to other employees including posters, placards, or pamphlets.

2. Any act, conduct or omission inconsistent with fulfilment of the expressed or implied conditions of contract or carrying out private work without authority.

13. Wilful disobedience to lawful orders.

33. Fraud.

34. Theft.

If the construction of the words used in s 2 of the Code proposed by the respondent was adopted the result would be that an employee who goes to the Press and deliberately makes an unauthorised statement denigrating and defaming his employer would not be dismissed from employment upon conviction for the misconduct as long as it was his first breach of the rule against that conduct. That would be the case regardless of the fact that the misconduct goes to the root of the relationship between employer and employee. The employer would be forced to keep the employee in his employment provided he imposes on him a final written warning valid for 12 months and/or demotion and/or suspension without pay for up to 30 days and wait patiently for the day the employee would commit a second breach to dismiss him.

It would mean that an employee who commits a well planned and premeditated fraud or theft involving large sums of money against his employer would not upon being found guilty of the misconduct be dismissed because he is a first offender.

It is known that the true extent of the gravity of certain offences is not known until the full facts and circumstances of their commission have been investigated. Although the offence included in the class of serious breaches is described as negligence in the performance of work it is known that there are degrees of negligence which can only be established upon examination of the circumstances of the commission of the offence. That would mean that an employee who is a first offender and is guilty of gross negligence in the performance of his work would not be dismissed just as an employee who has been found guilty of negligence of a minor degree.

The view of s 2 of the Code adopted by the learned President would drastically alter the common law. The position at common law is that a high degree of negligence, such as gross negligence in the performance of work, justifies an employer dismissing the employee: Wallace v Rand Daily Mail Co 1917 AD 479 at 482. It is a common law position that commission by an employee of conduct inconsistent with the fulfilment of express or implied conditions of the contract of employment entitles the employer to dismiss him if the circumstances of the commission of the offence show that the continuance of a normal employer and employee relationship has in effect been terminated. Standard Chartered Bank Zimbabwe v Chapuka S-125-04.

We are bound by the rule of construction to the effect that we must presume that there is no intention to alter the common law. As Mr Zhou put it, the Labour Act contains no provision which either expressly or by implication purports to alter the common law principle that an employer has a right to dismiss an employee following conviction for a misconduct of a material nature going to the root of the employer and employee relationship. A code of conduct cannot alter or abrogate a principle of the common law. It does not matter that the code of conduct is a product of an agreement.

It appears to me that the construction of the words of s 2 proposed by the appellant is the more plausible. In the first place, the words “depending on the severity of the offence committed” seem to qualify the words “the following are provided”. What that means is that the intention of the parties was to have the penalties provided imposed by employers unless there was evidence in the circumstances of the commission of the offence which aggravated the conduct of the employee so as to take it out of the ordinary degree of seriousness of the breach. In that case the employer was entitled to impose the penalty of dismissal on a first offender. That position accords with the common law principle that an employer is entitled upon conviction of an employee of misconduct which goes to the root of their relationship to dismiss him. In any case the fact that the two penalties, that is to say, the final written warning valid for 12 months and/or demotion and/or suspension without pay for up to 30 days and dismissal are penalties provided for the serious breaches means that any of them can be lawfully imposed as a punishment for the offences in that class of cases.

The appeal is allowed with costs. The decision of the court a quo is set aside and substituted with the following order:

“The appeal is dismissed with costs.”

CHEDA JA: I agree

GWAUNZA JA: I agree

Gill, Godlonton & Gerrans, appellant’s legal practitioners