REPORTABLE ZLR (23)

Judgment No. SC 32/09

Civil Appeal No. 170/07

VIMBAI MBISVA v

RAINBOW TOURISM GROUP LIMITED t/a RAINBOW HOTEL & TOWERS

SUPREME COURT OF ZIMBABWE

SANDURA JA, ZIYAMBI JA & MALABA JA

HARARE, MARCH 25, 2008 & JULY 15, 2009

T Biti, for the appellant

A K Maguchu, for the respondent

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

The background facts may be tabulated conveniently as follows –

1. The appellant (“Vimbai”) was employed by the respondent (“the Hotel”) as a supervisor.

2. On 18 January 2005 the Hotel wrote to Vimbai informing him that his contract of employment had been terminated. The letter reads as follows:

“Please be advised that effective 1 January 2005 your employment contract with Sheraton Harare Hotel and Towers has been terminated. You are no longer required to register for duty physically, on standby or in any other form.

The decision has been taken by management as a last resort after futile attempts to resolve the matter amicably and through further attempts to settle the matter through arbitration. Management and yourself are of the opinion that the employment relationship has deteriorated to non-productive levels.

As a way forward, Sheraton Harare Hotel is willing to resolve the matter through arbitration provided both parties agree on terms of reference to be presented before the arbitrator.”

3. Vimbai took the letter to his trade union, the Zimbabwe Catering and Hotel Workers’ Union (“the Union”) which, on 20 January 2005, wrote to the Hotel indicating that Vimbai’s dismissal would be challenged.

4. On 21 January 2005 the Hotel wrote to the Union as follows:

“… Vimbai Mbisva’s contract of employment has been terminated due to deterioration in the working relationship between Sheraton Harare Hotel and himself. As stated in our previous correspondence, we are willing and able to engage in dialogue that will result in the resolution of this matter. We are in addition willing to accept a determination from a body with appropriate authority to settle the matter.

The hotel welcomes intervention from the Zimbabwe Catering and Hotel Workers’ Union provided such intervention assists in a settlement of the above matter.”

5. Thereafter, the Union proposed that Vimbai be given a severance package equivalent to his salary for a period of two-and-a-half years, but the Hotel rejected that proposal.

6. Subsequently, the Union and the Hotel entered into negotiations on the best way forward, but the negotiations did not yield any positive results.

7. Then on 25 January 2005 Vimbai went to the Hotel where he signed a Memorandum of Agreement (“the MOA”) which reads as follows:

“I Vimbai Mbisva … hereby acknowledge that I have entered into an agreement with Sheraton Harare Hotel, under the following terms of which I have agreed:

1. to accept payment of the sum of Z$17 001 880.46 (Z$ seventeen million one thousand eight hundred and eighty dollars and forty-six cents) as full and final settlement of all claims that I have against Sheraton Hotel Harare, its directors, subsidiaries, associated companies and operations. I acknowledge that I have received Z$17 001 880.46 (Z$ seventeen million one thousand eight hundred and eighty dollars and forty-six cents) in full.

2. to withdraw all claims, complaints and statements made (by) me relating to Sheraton Hotel Harare, whether with my legal advisors, any legal advisors, any government body, any court, tribunal or to (sic) any other organisation.

I acknowledge that I have no further claims against Sheraton Hotel Harare, its directors, subsidiaries, associated companies and operations, whether for damages or otherwise. I have entered into this agreement of my own free will and I confirm that my signature appears on this agreement. I undertake to file a copy of this agreement with my legal advisors and any other organisation whose assistance I had sought.”

8. On 2 February 2005 Vimbai’s legal practitioners referred the issue of Vimbai’s unlawful dismissal to a labour officer for conciliation. The labour officer failed to settle the dispute and, accordingly, on 15 April 2005 issued a Certificate of No Settlement.

9. On 9 May 2005 the labour officer referred the dispute to compulsory arbitration, and identified the issues for arbitration as:

“(1) Whether the agreement of 25 January 2005 between V Mbisva and Sheraton Hotel is valid or not.

(2) If not, what damages are payable to Mr Mbisva.”

10. On 3 June 2005 Vimbai and the Hotel’s Human Resources Director (“Makoni”) appeared before the arbitrator with their legal practitioners. Both Vimbai and Makoni gave oral evidence and were cross-examined. After addresses by the legal practitioners, the arbitrator reserved his decision.

11. On 18 July 2005 the arbitrator gave his decision, which was that the MOA signed by Vimbai on 25 January 2005 was not binding on the parties because it was not an agreement in the legal sense.

12. Aggrieved by that decision, the Hotel appealed to the Labour Court in terms of s 98(10) of the Labour Act [Cap 28:01] (“the Act”).

13. On 5 April 2007 the Labour Court allowed the appeal and set aside the arbitral award granted on 18 July 2005.

14. Dissatisfied with that result, Vimbai appealed to this Court, leave to appeal having been granted in terms of s 92F(2) of the Act.

The grounds of appeal set out in the notice of appeal are as follows:

“1. The court a quo grossly erred as a question of law overturning the decision of the arbitrator on ordinary common law (principles) and not on the (principles) of public policies (enunciated) and captured in Article (34) of the UNCITRAL Model Law as incorporated in our Arbitration Act [Cap 11:15]. Put simply, (in) overturning the decision of the arbitrator, the court was obliged to consider whether the award in itself offended public policy.

2. Even assuming that the matter had to be determined purely and squarely on the basis of s 98(10) of the Labour Act [Cap 28:01], the court a quo grossly erred (in) overturning (a) finding of fact by the arbitrator. Put simply, there (were) no questions of law in the appeal pending before the Labour Court, and for that reason, the Labour Court had no good reason to interfere with the finding of fact that (had) been made by the arbitrator.

3. Put simply, the Labour Court grossly misunderstood its functions, the court dealing specifically with questions of law under s 98(10) of the Labour Act [Cap 28:01].

4. Even assuming, without conceding, that (there were) questions of law in the appeal before the Labour Court, the Labour Court itself grossly erred in holding that (the) document executed on the 25^th of January 2005 was binding, and ignored that the same had been executed under protest. In any event to show that the appellant was not agreeing with the same he had left a settlement cheque with the respondent.”

Although four grounds of appeal are set out in the notice of appeal, there are in fact only three grounds because the second and third grounds raise the same issue, i.e. whether there were questions of law in the appeal pending before the Labour Court.

I shall deal with grounds 2 and 3 first, and then with grounds 1 and 4.

DID THE APPEAL TO THE LABOUR COURT INVOLVE A QUESTION OF LAW?

This question is important because in terms of s 98(10) of the Act the right to appeal against the arbitrator’s decision is restricted to questions of law only. The section reads as follows:

“An appeal on a question of law shall lie to the Labour Court from any decision of an arbitrator appointed in terms of this section.”

What is a question of law was considered by this Court in Muzuva v United Bottlers (Pvt) Ltd 1994 (1) ZLR 217 (S). At 220 D-F GUBBAY CJ said:

“The twin concepts, questions of law and questions of fact, were considered in depth by E.M. GROSSKOPF JA in Media Workers’ Association of South Africa and Ors v Press Corporation of South Africa Ltd (Perskor) 1992 (4) SA 791 (A). Approving the discussion of the topic in Salmond on Jurisprudence 12 ed at 65-75, the learned JUDGE OF APPEAL pointed out at 795 D-G that the term ‘question of law’ is used in three distinct though related senses. First, it means ‘a question which the law itself has authoritatively answered to the exclusion of the right of the court to answer the question as it thinks fit in accordance with what it considered to be the truth and justice of the matter’. Second, it means ‘a question as to what the law is. Thus, an appeal on a question of law means an appeal in which the question for argument and determination is what the true rule of law is on a certain matter’. And third, any question which is within the province of the judge instead of the jury is called a question of law. This division of judicial function arises in this country in a criminal trial presided over by a judge and assessors.”

Applying these principles to the Hotel’s appeal to the Labour Court, there is no doubt in my mind that the appeal involved a question of law. I say so because in its notice of appeal filed in the Labour Court the Hotel based the appeal on the following ground of appeal:

“… the arbitrator erred grossly at law and on the facts in holding that the Memorandum of Agreement is not (an) agreement in terms of the law.”

The issue before the Labour Court was, therefore, whether the MOA was an agreement in terms of the law. That, in my view, is a question of law within the second sense of the term “question of law” set out above.

There is, therefore, no substance in the second and third grounds of appeal.

DOES ARTICLE 34(2)(b)(ii) OF THE MODEL LAW APPLY TO APPEALS BROUGHT TO THE LABOUR COURT IN TERMS OF S 98(10) OF THE ACT?

This issue arises because in the first ground of appeal it is submitted that the Labour Court should not have set aside the arbitral award unless it had been satisfied that the award was in conflict with the public policy of Zimbabwe, in terms of Article 34(2)(b)(ii) of the Model Law set out in the First Schedule to the Arbitration Act [Cap 7:15].

Article 34 of the Model Law, in relevant part, reads as follows:

“(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.

(2) An arbitral award may be set aside by the High Court only if –

(a) …

(b) the High Court finds that –

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Zimbabwe; or

(ii) the award is in conflict with the public policy of Zimbabwe.

(3) …”.

The issue set out above was considered by this Court in Net^*One Cellular (Pvt) Ltd v (1) Communications and Allied Services Workers Union of Zimbabwe (2) Fifty-Six Net^*One Employees SC 89/05. In that case this Court ruled that Article 34 of the Model Law did not apply to an appeal against an arbitral award, brought to the Labour Court in terms of s 98(10) of the Act.

In my view, it is quite clear, from a careful reading of Article 34, that the Article only deals with and limits the power of the High Court to set aside an arbitral award, and does not in any way deal with or limit the power of the Labour Court to set aside an arbitral award challenged in terms of s 98(10) of the Act.

I cannot, therefore, see any reason for departing from this Court’s decision in the Net^*One case supra.

Consequently, the Labour Court did not have to be satisfied that the arbitral award was in conflict with the public policy of Zimbabwe before setting it aside.

There is, therefore, no merit in the first ground of appeal.

WAS THE MEMORANDUM OF AGREEMENT BINDING ON VIMBAI?

In the fourth ground of appeal it is submitted that the Labour Court erred in holding that the MOA was binding on Vimbai, and ignored the fact that it was signed under duress.

However, this ground of appeal was not dealt with in the heads of argument filed on behalf of Vimbai. Nevertheless, I will deal with it.

The issue raised in this ground of appeal is whether the MOA was signed under duress.

As already stated, both Makoni and Vimbai gave evidence before the arbitrator and were cross-examined. After consideration of that evidence, the arbitrator said the following:

“In one way or the other, after the dismissal of the claimant, the parties contacted each other, resulting in the claimant and Mr Makoni (from Sheraton) meeting to ‘finalise’ the matter. At this penultimate meeting, the employer presented a document that would put the matter to rest. The claimant knew that if he continued to challenge his dismissal, he would get nothing from the employer. He therefore pretended to be accepting his terminal benefits, but requested that they be split into two parts, with the first part incorporating largely the January salary and (the) other part the rest of the other terminal benefits.

The claimant then wrote ‘U.P.’ after his signature to signify that he was accepting the benefits ‘Under Pressure’.

This was not explained to the employer. The employer acknowledges that he (it?) was not aware that the claimant had signed the document under pressure. …

The claimant hoodwinked the employer into believing that he was consenting to the termination of employment and to the acceptance of terminal benefits. This was done with the sole aim of accessing the January salary.

The claimant’s conduct is … deplorable. He was understandably desperate for cash but he used unorthodox methods to get what he wanted. …

He lied that he was accepting the benefits of his own free will, and that his acceptance was in full and final settlement of (the) claims that he had against the respondent. No wonder the respondent’s agent kept referring to him as a trickster.

Had it not been for my findings regarding the MOA I would have ruled that the claimant be bound by (his) signature, never mind the invented ‘U.P’.”

It is quite clear from what the arbitrator said that he was satisfied that Vimbai had not signed the MOA under duress.

The Labour Court was of the same view and said the following:

“It may very well be true that he was under financial pressure which forced him to accept a deal that he did not like. But the fact remains that he need not have accepted the deal. It is not like his will was overborne by (the) appellant’s to the extent that he had no choice in the matter. He had a choice. He could have rejected the whole deal and pursued other remedies. The fact that he now feels that he should have got more than the deal offered is no ground for breaking the deal.”

The finding by the Labour Court that Vimbai did not sign the MOA under duress is a finding of fact, which is not appealable unless it can be said to be irrational in the sense set out in Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) at 670 C-E, where this Court said:

“The general rule of law, as regards irrationality, is that an appellate court will not interfere with a decision of a trial court based purely on a finding of fact unless it is satisfied that, having regard to the evidence placed before the trial court, the finding complained of is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at such a conclusion: Bitcon v Rosenberg 1936 AD 380 at 395-7; Secretary of State for Education and Science v Metropolitan Borough of Tameside [1976] 3 All ER 665 (CA) at 671 E-H; CCSU v Minister for the Civil Service [1984] 3 All ER 935 (HL) at 951 A-B; PF-ZAPU v Minister of Justice (2) 1985 (1) ZLR 305 (S) at 326 E-G.”

In the present case, I am not prepared to say that having regard to the evidence placed before the arbitrator and the Labour Court the finding complained of is irrational in the sense set out above. Consequently, the finding that Vimbai did not sign the MOA under duress is not appealable, and the fourth ground of appeal, therefore, falls away.

In my view, the Labour Court correctly determined the matter. The MOA was a declaration by Vimbai that the dispute between him and the Hotel had been settled on the terms and conditions set out in the MOA. That conclusion is logically consistent with what happened in this case before 25 January 2005.

Vimbai was dismissed by the Hotel. He reported the matter to the Union and a labour dispute ensued. Negotiations aimed at settling the dispute commenced between the Union and the Hotel. The Union proposed that Vimbai be given a severance package equivalent to his salary for a period of two-and-a-half years, but the Hotel rejected the proposal. As he badly needed some money Vimbai went to the Hotel on 25 January 2005 and signed the MOA, declaring that the labour dispute had been settled on the terms and conditions set out therein. In my view, that declaration is binding on him.

In the circumstances, the appeal is dismissed with costs.

ZIYAMBI JA: I agree

MALABA JA: I agree

Honey & Blanckenberg, appellant's legal practitioners

Dube, Manikai & Hwacha, respondent's legal practitioners