REPORTABLE Z.L.R. (22)

Judgment No S.C. 22\2002

Civil Appeal No 36\2001

DAIRIBORD ZIMBABWE LIMITED v LAZARUS MUYAMBI

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, SANDURA JA & CHEDA JA

HARARE MARCH 21 & MAY 20, 2002

J.C. Andersen S.C., for the appellant

A.P. de Bourbon S.C., for the respondent

SANDURA JA: This is an appeal against a judgment of the High Court which granted the respondent’s application for an order declaring that he was an employee of the appellant.

The relevant facts are as follows. The respondent was employed by the appellant as an auditor with effect from 1 January 1985. He rose through the ranks and became the appellant’s Chief Internal Auditor.

Subsequently, with effect from 1 January 1998 the respondent was seconded to Dairibord Malawi Limited (DML”) as that company’s Managing Director. The terms and conditions of the secondment were set out in a contract of assignment entered into by the appellant and the respondent which was due to expire on 31 December 1999.

However, in June 1999 the appellant ordered the respondent to go on paid leave for an indefinite period pending the completion of what it called “extensive investigations into the operations of Dairibord Malawi”. The respondent was also ordered to return to Zimbabwe in order to facilitate the investigations.

Thereafter, on 3 September 1999 the respondent was summoned to a hearing on 14 September 1999. Although the hearing was convened, it did not deal with any substantive issues. Instead, it dealt with preliminary issues such as the composition of the disciplinary committee and whether or not the respondent was entitled to legal representation.

Then, on 24 September 1999 the appellant’s Chief Executive Officer withdrew the proceedings, which had been instituted against the respondent in terms of the appellant’s code of conduct. Instead, he gave the respondent three months' notice of the termination of the contract of assignment (“the notice”). What this meant was that the contract of assignment would end on 31 December 1999, the date when the contract would have terminated in any event.

However, shortly after receiving the notice, the respondent, through his lawyers, sought confirmation from the appellant’s Chief Executive Officer that the notice applied to the contract of assignment only, and that with effect from 1 January 2000 the respondent would revert to the position of Chief Internal Auditor of the appellant. When that confirmation was not forthcoming, the respondent filed a court application in the High Court on 24 November 1999, seeking the declaratur already referred to.

The learned judge in the court a quo granted the order sought. Aggrieved by that decision, the appellant appealed to this Court.

The main issue in this case is whether the notice was intended to terminate the contract of assignment as well as the respondent’s 1985 contract of employment with the appellant. I do not think so. I say so for two reasons.

The first reason is that the appellant’s Chief Executive Officer made it quite clear in his letter to the respondent dated 24 September 1999 that the notice only affected the contract of assignment. The letter, in relevant part, reads as follows:-

“It was overlooked that there exists between yourself and Dairibord Zimbabwe Limited a written Contract of Assignment in terms of which you were assigned as Managing Director of Dairiboard Malawi Limited under certain conditions …

In terms of the contract aforesaid either party is entitled to three calendar months’ notice in writing of any intention to terminate the employment.

I consider that the employer/employee relationship between yourself and the company has completely broken down to such an extent that it is no longer possible for you to remain in your employment.

In terms of the Contract of Assignment I hereby give you the requisite three months’ notice to terminate your contract of employment. The period of notice shall run from the 1^st October and expire on the 31^st December 1999…

I advise that all proceedings in terms of the Code of Conduct have been revoked and abandoned as it was obviously a mistake to proceed with them in the face of (the) contract of employment …”

This letter was written after the aborted disciplinary proceedings of 14 September 1999. In my view, it is clear beyond doubt that the notice affected the contract of assignment only. Any contention that the termination of the contract of assignment automatically meant the termination of the 1985 contract of employment cannot be sustained.

I say so because the contract of assignment was for a period of two years only, after which the respondent was to return to Zimbabwe and continue working for the appellant. In this regard, the clause in the contract of assignment dealing with the respondent’s remuneration states as follows:-

“The amounts included in this contract have been increased by an expatriate supplement of 20% which will not apply when the incumbent returns to work for the company in Zimbabwe.” (the emphasis is mine)

Quite clearly, the two contracts were separate. The termination of the contract of assignment did not affect the 1985 contract of employment. At the end of the contract of assignment the respondent was to return to Zimbabwe and resume his usual duties.

The second reason why I say that the notice did not affect the 1985 contract of employment is that when the respondent’s lawyers wrote to the appellant’s Chief Executive Officer, on 28 September 1999, seeking his confirmation that the notice affected the contract of assignment only, there was no response from him. The relevant part of the letter written by the respondent’s lawyers reads as follows:-

“As was indeed pointed out in our letter dated 15^th September 1999, it is correct that our client was assigned as Managing Director of Dairiboard Malawi Limited for a fixed period. … The giving of three months’ notice therefore only applies to the assignment contract in terms of which you have acted. As a result, our client will resume his original position as at 1^st January, 2000. …

We further note your reference to the processing of terminal benefits and believe this refers to those benefits that arose out of the contract of assignment and this will not in any way affect benefits under our client’s position which he reverts to on 1 January, 2000, as that position remains secure and intact …”

The fact that the appellant’s Chief Executive Officer did not respond to this letter is significant. If his understanding of the position was that the notice extended to the 1985 contract of employment he should have said so.

In the circumstances, it cannot be doubted that the only employment terminated by the notice is that which was governed by the contract of assignment. The respondent’s main contract of employment with the appellant remained intact. It was not terminated in terms of the appellant’s code of conduct, nor was it terminated in terms of the Labour Relations Act [Chapter 28:01].

That being the case, it follows that the respondent remains an employee of the appellant. This conclusion is confirmed by the appellant’s failure to produce any evidence indicating that it had terminated the contract in question.

If on 1 January 2000 the post of Chief Internal Auditor was still occupied by some other person, the appellant should have given the respondent an equivalent post or paid him the salary of Chief Internal Auditor, in the event that it had no other work for him.

Mr Andersen, who appeared for the appellant, submitted that the learned judge in the court a quo should have found that the relationship between the parties had broken down to the extent that it was wholly inappropriate for the respondent to be reinstated in employment. With respect, I disagree with that submission for two reasons.

The first reason is that no issue of reinstatement arises in this case. As already stated, the appellant did not produce any evidence to show that the contract of employment entered into in 1985 was terminated.

The second reason is that even if reinstatement were in issue, the appellant did not produce any evidence indicating that the relationship between the parties to the 1985 employment contract had broken down to the extent alleged. On the papers, the only complaint of a breakdown in the relationship between the parties was made by the appellant’s Chief Executive Officer in his letter to the respondent, dated 24 September 1999, which I have already set out above. The relevant part reads:-

“I consider that the employer/employee relationship between yourself and the company has completely broken down to such an extent that it is no longer possible for you to remain in your employment.”

As already stated, the letter was written for the purpose of terminating the contract of assignment by giving the respondent three months’ notice, and the reason given for that termination was that the relationship between the parties had broken down to the extent alleged. The allegation that the relationship had broken down had nothing to do with the 1985 contract of employment.

In any event, when the respondent’s lawyers, in a letter dated 28 September 1999, asked the appellant’s Chief Executive Officer to state the basis on which he had reached the conclusion that the relationship had broken down to the extent alleged, they received no response. In my view, the fact that the Chief Executive Officer did not respond to that query is significant. It might mean that, upon reflection, he could not substantiate the allegation which he had made.

Furthermore, all that appeared to be in issue was the allegation that on one occasion, as the appellant’s Chief Executive Officer and the respondent discussed the operations of Dairiboard Malawi Limited, the respondent’s attitude towards the Chief Executive Officer was disrespectful. In my view, that incident alone would not justify the conclusion that the relationship between the appellant and the respondent had broken down to the extent alleged.

It is true that in Commercial Careers College (1980) (Pvt) Ltd v Jarvis 1989 (1) ZLR 344 (S) at 349F this Court said:-

“It is easy to conceive of a situation in which, albeit no blame whatsoever attaches to the employee, the inescapable inference is that the personal relationship between him and the employer had broken down to the extent that trust in one another has been lost. For a court to order reinstatement against such a backdrop of animosity and ill-will, solely because an employee unreasonably and out of wounded pride seeks it, would be to permit the continuation of an intolerable personal relationship - one which would make it impossible for the employee to perform his duties either to his own satisfaction or to that of his employer.” (the emphasis is mine)

The above principle was subsequently applied by this Court in Winterton Holmes & Hill v Paterson 1995 (2) ZLR 68 (S). At 75F the court said:-

“In dealing with the issue of reinstatement, the learned judge a quo was alive to the breakdown in the relationship between the appellants and the respondent, with no degree of trust or respect remaining on either side.”

The respondent in that case was a professional assistant in the appellants’ law firm.

The principle was again applied by this Court in Girjac Services (Pvt) Ltd v Mudzingwa 1999 (1) ZLR 243 (S). The respondent in that case had been caught stealing his employer’s property but the charge had subsequently been withdrawn after plea. At 250A-B this Court said:-

“The respondent was a fairly senior employee. He was a person in whom the appellant reposed trust. He held a position which imported a close association with its manager. It cannot be doubted that from the appellant’s viewpoint the personal relationship between it and the respondent had broken down to the extent that confidence in the respondent’s honesty had been lost; there was no prospect of restoring a normal employer-employee relationship. Therefore, to have ordered the respondent’s reinstatement - to have thrust him back upon the appellant, a relatively small organisation, against its will - was to create for it an intolerable situation.”

However, whilst the principle is well established I do not think it applies to the facts of the present case. I say so because, apart from the bald statement made by the appellant’s Chief Executive Officer that the relationship between the parties had broken down to the extent alleged, the appellant produced no evidence of the alleged breakdown of the relationship and what caused it.

There was no evidence indicating, for example, that the relationship between the parties had broken down to the extent that trust in one another had been lost, or that the appellant had lost confidence in the respondent’s honesty.

Thus, if the respondent’s reinstatement had been an issue in the court a quo, the learned judge would have been entitled to exercise her discretion in favour of the respondent by ordering his reinstatement. However, the issue of reinstatement did not arise because the learned judge found, correctly in my view, that the 1985 contract of employment had not been terminated.

In the circumstances, the appeal is devoid of merit and is, therefore, dismissed with costs.

CHIDYAUSIKU CJ: I agree

CHEDA JA: I agree

Scanlen & Holderness, appellant's legal practitioners

Kantor & Immerman, respondent's legal practitioners