REPORTABLE Z.L.R. (56)

Judgment No S.C. 56\2002

Civil Appeal No 119\2001

(1) OLIVER CHIRISERI (2) FREDERICK CHINYENZE v PLAN INTERNATIONAL

SUPREME COURT OF ZIMBABWE

SANDURA JA, CHEDA JA & ZIYAMBI JA

HARARE MAY 27 & AUGUST 20, 2002

J. Siveregi, for the appellants

R. Harvey, for the respondent

SANDURA JA: In this matter each appellant appealed against the quantum of the damages awarded to him by the Labour Relations Tribunal (“the Tribunal”) as an alternative to his reinstatement as an employee of the respondent.

The relevant facts are as follows. The appellants, who were employed by the respondent, were suspended without pay and benefits in terms of s 3(1) of the Labour Relations (General Conditions of Employment)(Termination of Employment) Regulations, 1985, published in Statutory Instrument 371 of 1985 (“the Regulations”), on 20 July 1994. On the same day, the respondent applied to the labour relations officer at Kwekwe for the authority to dismiss them.

The labour relations officer subsequently dismissed the application and ordered the respondent to reinstate the appellants without loss of salary and benefits with effect from the date of their suspension. That decision was later upheld by the senior labour relations officer.

Thereafter, the respondent appealed to the Tribunal. That appeal was dismissed with costs and the following order was issued:-

“That the appellant … reinstate both respondents with effect from the date of suspension with no loss of salary or benefits.

Alternatively:

That the appellant … pay to each respondent an amount of damages which the parties may agree upon, (failing) which either party may approach the Tribunal for quantification of damages.”

When the parties subsequently failed to agree on the quantum of damages, they returned to the Tribunal which later determined the matter on 20 April, 2001. However, as the appellants were dissatisfied with the amounts awarded to them, they appealed to this Court.

In terms of s 92(2) of the Labour Relations Act [Chapter 28:01] (“the Act”) an appeal from the Tribunal lies to this Court only on a question of law. A ruling by the Tribunal on the quantum of damages is a ruling on fact and, therefore, not appealable, unless it is wholly unreasonable. See Leopard Rock Hotel Company (Private) Limited v Van Beek 2000 (1) ZLR 251(S) at 256B-C.

In the present case, I am satisfied that the Tribunal’s decision is wholly unreasonable. Consequently, the matter is properly before this Court.

In assessing the quantum of the damages payable to the appellants the Tribunal misdirected itself. It proceeded on the basis that the appellants had been dismissed by the respondent on 20 July 1994 when, in fact, they had only been suspended without pay and benefits. It then calculated the damages on the basis that it would have taken the appellants eighteen months from 20 July 1994, to find alternative employment.

In respect of the first appellant (“Chiriseri”) the Tribunal reduced the damages by $45 996.50, which sum he had earned whilst on suspension when he was temporarily employed by the Ministry of Health. However, with regard to the second appellant (“Chinyenze”), the damages were reduced by $45 000, that being the amount by which the Tribunal thought he should have mitigated his damages.

In the circumstances, the Tribunal assessed Chiriseri’s damages as follows:-

“His damages are therefore equivalent to 18 months salary and benefits less $45 996.50 plus 13^th cheque:

Salary and benefits $6 812.00

x 18

Total $122 616.00

13^th Cheque x 1½ + 7 866.00

Total $130 482.00

Less mitigation - 45 996.50

$ 84 485.50

Cash in lieu of leave + 5 244.00

Total damages $ 89 729.50”

Chinyenze’s damages were assessed as follows:-

“Salary and benefits $ 6 470.00

Period x 18 months

$116 460.00

Less mitigation - 45 000.00

$ 71 460.00

13^th Cheque x 1½ $ 7 776.00

Total damages $ 79 236.00”

Counsel for the appellants submitted that the period within which the appellants could not reasonably have been expected to find alternative employment was eighteen months. I did not understand counsel for the respondent to disagree with that submission. In fact, he submitted that the assessment of damages by the Tribunal was fair and equitable.

However, that was not the appellants’ view. Whilst taking no issue with the deductions made in respect of the mitigation of their damages, they contended that they were entitled to back-pay and benefits from 20 July 1994, when they were suspended, to 9 July 1998, when the Tribunal dismissed the respondent’s appeal against their reinstatement. In addition, it was their contention that they were entitled to eighteen months’ salary and benefits, being damages for the premature termination of their contracts of employment when the respondent opted to pay them damages rather than reinstate them.

In the circumstances, the only issue between the parties is whether, in addition to the salary and benefits for eighteen months, each appellant is entitled to back-pay and benefits from 20 July 1994 to 9 July 1998.

Before determining that issue, I would like to set out the order issued by the labour relations officer on 29 March 1995. It reads as follows:-

“I order that they (the appellants) be reinstated without any loss of salary and benefits with effect from the date of suspension.”

It was common cause that the appellants were suspended from their positions without salary and benefits on 20 July 1994.

However, I hasten to add that when the labour relations officer issued the order set out above, he overlooked the provisions of s 96(1)(c) of the Act in terms of which the alternative of damages is an essential part of any order of reinstatement. However, that error was subsequently corrected by the Tribunal on 9 July 1998 when, in dismissing the respondent’s appeal, it made provision for the payment of damages in lieu of reinstatement.

In the circumstances, the order issued by the labour relations officer, as corrected by the Tribunal, provided for the alternative of damages as required by s 96(1)(c) of the Act.

Having said that, I proceed to consider whether the appellants are entitled to any back-pay and benefits. In this regard, it is important to bear in mind that the respondent was ordered to reinstate the appellants “with effect from the date of suspension with no loss of salary or benefits” or, alternatively, pay them damages in lieu of reinstatement.

It is clear from the wording of the order that if the appellants had been reinstated they would have been entitled to back-pay and benefits from 20 July 1994, when they were suspended, to 29 March 1995, when the order was issued by the labour relations officer. I say so because the order makes it clear that the reinstatement is to have a retrospective effect.

As this Court stated in Chegutu Municipality v Manyora 1996 (1) ZLR 262(S) at 268A-B:-

“… the word ‘reinstate’ or ‘reinstatement’ carries no automatic retrospective connotation, either in ordinary language or in our legislation. Normally it means simply that the person concerned will be placed again in his/her former job. If retrospectivity is intended, one would normally look for additional words such as ‘with effect from the date of dismissal’ or ‘with effect from (a particular date in the past)’ or ‘with back-pay and all benefits from … (date)’.”

Applying that test to the order of reinstatement issued by the labour relations officer and confirmed by the Tribunal, it is clear that retrospectivity was intended.

However, as the appellants were not reinstated the question to consider is whether the damages to be paid in lieu of reinstatement should include back-pay and benefits from 20 July 1994 to 29 March 1995. In my view, where the order of reinstatement indicates that retrospectivity was intended, the damages to be paid in lieu of reinstatement must include back-pay and benefits.

As this Court stated in Leopard Rock Hotel Company (Private) Limited v Van Beek, supra, at 254H-255A:-

“… ‘back-pay’ and ‘damages’ are indeed different concepts, but only in the sense that ‘damages’ is a wider concept. It will normally include back-pay, but may include, for example, compensation for loss of promotion prospects, interest, and other elements as appropriate.”

However, there is no basis for awarding the appellants back-pay and benefits in respect of the period after 29 March 1995, the date on which the order of reinstatement was issued. In addition, I should point out that what the appellants are entitled to is the net amount and not the gross back-pay and benefits. The same applies to the eighteen months’ salary and benefits which each appellant is entitled to as damages for the premature termination of his contract of employment.

Accordingly, each appellant is entitled to (a) net back-pay and benefits from 20 July 1994 to 29 March 1995, a period of about eight months, and (b) net salary and benefits for eighteen months. From the total sum should be deducted the amount by which each appellant mitigated his damages whilst he was on suspension. In this regard, it is the net amount as opposed to gross earnings which should be deducted. The Tribunal erroneously deducted gross earnings during the period of suspension.

The next issue to consider is whether this matter should be remitted to the Tribunal for the calculation of the damages payable to each appellant. As the record of the proceedings in the Tribunal shows the gross salary and benefits of each appellant, and gives no indication of the net salary and benefits, I was initially tempted to remit the matter to the Tribunal. However, I am concerned that that course would unduly delay the finalisation of this matter.

In the circumstances, I think that it is in the interests of the parties that this Court should take a robust view of the matter and calculate the net salary and benefits of each appellant, bearing in mind each appellant’s gross salary and benefits as calculated by the Tribunal, and applying the provisions of the relevant Finance Act, i.e. the Finance Act, 1993, Act No. 12 of 1993 (“the Finance Act”).

In terms of the relevant provisions of the Finance Act, no income tax was payable in respect of the first $6 000 of each appellant’s annual salary and benefits, but the balance attracted income tax at the rate of 20 to 45 per centum.

Applying the provisions of the Finance Act, Chiriseri’s net salary and benefits were about $58 178.00 per annum or $4 848.00 per month. Although his gross earnings whilst he was on suspension were $45 996.50, the net amount was about $35 048.00. His damages are, therefore, as follows:-

1. Net back-pay and benefits for 8 months

= $4 848 x 8 = $38 784.00

(b) Net salary and benefits for 18 months

= $4 848 x 18 = $87 264.00

Total = $126 048.00

From that total should be deducted his net earnings during the period of suspension, i.e. $35 048.00. That deduction leaves a balance of $91 000.00, which is the quantum of damages payable to Chiriseri in lieu of reinstatement. The amount will attract interest at the prescribed rate from 20 April 2001 to the date of payment in full.

Similarly, applying the provisions of the Finance Act, Chinyenze’s net salary and benefits were about $55 854.00 per annum or $4 654.50 per month. Although his estimated gross earnings during the period of suspension were $45 000.00, the net amount was about $34 450.00. His damages are, therefore, as follows:

(a) Net back-pay and benefits for 8 months

= $4 654.50 x 8 = $37 236.00

(b) Net salary and benefits for 18 months

= $4 654.50 x 18 = $83 781.00

Total Sum = $121 017.00

From that total sum should be deducted his net earnings during the period of suspension, i.e. $34 450.00. That deduction leaves a balance of $86 567.00, which is the quantum of damages payable to Chinyenze in lieu of reinstatement. The amount will attract interest at the prescribed rate from 20 April 2001 to the date of payment in full.

Finally, I would like to comment on the submission by counsel for the appellants that in Ambali v Bata Shoe Co Ltd 1999(1) ZLR 417 (S) (i.e. the second appeal by Ambali) this Court should have ordered that Ambali be paid his salary and benefits for the period during which he was suspended from employment.

However, before commenting on that submission I wish to say that in Ambali’s first appeal to this Court, which appeal was heard in June 1998, the record of the proceedings in the Tribunal was in an unsatisfactory state. That prompted McNALLY JA to say the following at page 1 of the cyclostyled judgment in Charles Ambali v Bata Shoe Company Limited, S-100-98 (not reported), a judgment with which I concurred:-

“This is a labour matter, and the record is unsatisfactory. It has apparently been reconstructed because the record on tape could not be found.”

At page 2 of the cyclostyled judgment the learned Judge of Appeal set out the decisions reached by the Regional Hearing Officer, the Labour Relations Board and the Tribunal as follows:-

“There was a hearing before the Regional Hearing Officer on 29 April 1986 … On 14 August 1986 the Regional Hearing Officer ordered that Ambali be reinstated.

Bata then appealed to the Labour Relations Board (the Board) … On 15 April 1988 the Board found that Ambali should be reinstated.

An appeal was then noted by Bata to the Tribunal. On 28 June 1988 the Tribunal found for Bata.” (The emphasis is mine).

When Ambali appealed to this Court, (i.e. the first appeal) the appeal was allowed with costs and the following order, which appears at page 6 of the cyclostyled judgment, was made:-

“The order of the Tribunal is set aside, and in its place is substituted ‘the appeal is dismissed with costs.’ The matter is remitted to the Tribunal so that it may specify an amount of damages to be awarded to the employee concerned as an alternative to his reinstatement or employment …”

It is clear from the judgment that both the Regional Hearing Officer and the Labour Relations Board simply ordered that Ambali be reinstated. They did not order “that Ambali be reinstated with effect from the date of suspension with back-pay and benefits.” In other words, the order of reinstatement did not have a retrospective effect.

Accordingly, the damages awarded in lieu of reinstatement would not include back-pay and benefits. That is why, in the second appeal, Ambali was not awarded back-pay and benefits for the period during which he was on suspension.

In the circumstances, the following order is made:-

1. The appeal is allowed with costs.

2. The order issued by the Tribunal is set aside and the following is substituted:

“(a) That the respondent shall pay to Chiriseri damages in lieu of reinstatement in the sum of $91 000.00, together with interest at the prescribed rate from 20 April 2001 to the date of payment in full.

(b) That the respondent shall pay to Chinyenze damages in lieu of reinstatement in the sum of $86 567.00, together with interest at the prescribed rate from 20 April 2001 to the date of payment in full.

(c) That the respondent shall bear the applicants’ costs.”

CHEDA JA: I agree

ZIYAMBI JA: I agree

Dube Manikai & Hwacha, appellants’ legal practitioners

Granger & Harvey, respondent's legal practitioners