DISTRIBUTABLE (94)

Judgment No. SC 115/02

Civil Appeal No. 55/01

BATA SHOE COMPANY LIMITED v

(1) MACDONALD PONGWENI (2) AUGUSTINE MACHANGU

SUPREME COURT OF ZIMBABWE

SANDURA  JA, MALABA JA & GWAUNZA JA

BULAWAYO, NOVEMBER 25, 2002 & JANUARY 20, 2003

R M Fitches, for the appellant

The respondents in person

SANDURA  JA: This is an appeal against a judgment of the Labour Relations Tribunal (“the Tribunal”) which, inter alia, ordered the appellant (“Bata”) to refund the sum of $47 563.34 to the first respondent (“Pongweni”), and the sum of $31 416.53 to the second respondent (“Machangu”).

The background facts are as follows. At the relevant time Bata, a company whose business was, and still is, the manufacture and sale of shoes, employed Pongweni and Machangu as managers of two of its retail outlets in Bulawayo. It was Bata’s policy to deduct from the salary payable to the manager of its retail outlet the value of the shoes stolen at that outlet, whether or not the manager was at fault.

In accordance with that policy, various amounts were deducted from the salaries payable to Pongweni and Machangu without their consent. However, both Pongweni and Machangu added that as an alternative to such deductions they were at times required by the district sales manager (“Shumba”) to pay, and did pay, to Bata the value of the stolen shoes.

Consequently, shortly after the termination of their employment contracts, the two men approached a labour relations officer and lodged a complaint against Bata about their salary deductions. After conducting a hearing, the labour relations officer issued a determination on 20 September 1995 ordering Bata to refund to Pongweni and Machangu all the amounts deducted from their salaries in respect of the stolen shoes, but the amounts refundable were not quantified.

That determination was subsequently upheld by a senior labour relations officer on 4 March 1996. Thereafter, an appeal to the Tribunal by Bata was dismissed with costs on 5 October 1999, and no appeal was noted against that decision.

Subsequently, when the parties could not agree on the amounts refundable, Pongweni and Machangu approached the Tribunal which, on 31 January 2001, after conducting a full hearing, ordered Bata to refund the sum of $47 563.34 to Pongweni and the sum of $31 416.53 to Machangu. In addition, the Tribunal ordered Bata to pay both men their unpaid salaries and terminal benefits. Aggrieved by the Tribunal’s order, Bata appealed to this Court.

Before dealing with the issues raised in this appeal, I wish to stress that the appeal concerns the quantum of the amounts payable to the respondents. It does not concern the issue as to whether Bata had the right to make the respondents pay to it the value of the stolen shoes. That issue was determined in favour of the respondents by the labour relations officer who, in September 1995, ruled that Bata did not have such a right. That determination was subsequently upheld by the senior labour relations officer in March 1996, and by the Tribunal in October 1999. As already stated, no appeal was ever noted by Bata against the order issued by the Tribunal in October 1999.

Having said that, I wish to consider the merits of the appeal. However, before the appeal was heard, Mr Fitches, who appeared for Bata, obviously appreciating that the notice of appeal did not raise any question of law, applied for leave to amend the appellant’s grounds of appeal by adding the following:

“1. In giving a determination that amounted to or related to unjust enrichment, the Tribunal erred in law in that it entertained matter beyond the ambit of its statutory jurisdiction.

2. As it was common cause that the respondents had consented contractually to the deductions, the Tribunal erred in law in its determination, as there was no basis in law upon which to order reimbursement.

3. That as the respondents had resigned there was no basis upon which the Tribunal could entertain their claims.”

The application was not opposed by the respondents and was, accordingly, granted.

The first ground was based on what the Tribunal said in its judgment after hearing the application for the quantification of the amounts refundable to the respondents. It said the following:

“The order required the respondent (Bata) to reimburse all the monies deducted for stolen shoes. It, however, turned out during the proceedings that there were times when the applicants (Pongweni and Machangu) were ordered to pay cash from their own pockets for half pairs stolen in circumstances where they were not to blame for the thefts. The order clearly intended to reimburse the applicants (Pongweni and Machangu) for any losses they suffered in that respect. The word ‘deducted’ should be given a wider meaning to avoid the respondent (Bata) being unjustly enriched at the expense of the applicants (Pongweni and Machangu).”

That statement was made in the light of the evidence given by Pongweni and Machangu that when they appeared before the labour relations officer and claimed the refund of the amounts deducted from their salaries, they did not distinguish between deductions from their salaries and payments in cash which they had made to Bata out of their own pockets on Shumba’s instructions, to cover up the shortfall in the proceeds from the sale of shoes caused by theft of shoes at the retail outlets which they managed. They said that when the shortfall was small, the amount was deducted from the salary of the manager concerned, but when it was large Shumba required the manager to pay the amount to Bata in cash out of his own pocket. In other words, the manager concerned was required to put his own cash in the till in order to cover up the shortfall.

In the light of that evidence, the Tribunal held, correctly in my view, that whether the amount was deducted from the manager’s salary or the manager paid it to Bata in cash out of his own pocket made no difference. In either case, it was the manager who paid the amount in question to Bata, and as the deduction or payment was unlawful it had to be refunded.

That, in my view, is the correct interpretation of what the Tribunal said in its judgment. Although in the judgment it mentioned the words “unjust enrichment”, its decision was not based on that principle. In the circumstances, there is no merit in the first ground of appeal.

The second ground of appeal, i.e. that as the respondents had consented contractually to the deductions there was no basis in law upon which to order reimbursement, cannot be advanced in the present appeal because it raises the issue of Bata’s liability to refund the amounts deducted from the respondents’ salaries, an issue which was finally determined by the Tribunal in favour of the respondents in October 1999 when Bata’s appeal was dismissed with costs. As already stated, Bata did not appeal against the Tribunal’s decision.

The third ground, i.e. that as the respondents had resigned there was no basis upon which the Tribunal could entertain their claims, is devoid of merit.

The powers of a labour relations officer are set out in s 93(1) of the Labour Relations Act [Chapter 28:01] (“the Act”), and they include the power to determine any dispute or unfair labour practice. Similarly, the powers of a senior labour relations officer are set out in s 95(1) of the Act.

In terms of s 91(1) of the Act, the powers of the Tribunal are to confirm, vary or set aside the determination appealed against, or substitute its own determination for the one appealed against, and in this regard the Tribunal has the same powers as a labour relations officer and a senior labour relations officer, by virtue of s 91(2) of the Act which extends the powers under s 96(1) of the Act to the Tribunal.

The respondents in this case approached the labour relations officer shortly after the termination of their employment and complained about an unfair labour practice, i.e. that they had not been paid their wages in full. In this regard, s 13(1) of the Act makes it clear that such non-payment of wages constitutes an unfair labour practice. The section, in relevant part, reads as follows:

“Subject to the provisions of this Act or any regulations made in terms of this Act, whether any person –

(a) is dismissed from his employment or his employment is otherwise terminated; or

(b) resigns from his employment; or …

he … shall be entitled to the wages and benefits due to him up to the time of such dismissal, termination, resignation …, and the employer concerned shall pay such entitlements to such person … as soon as reasonably practicable after such event, and failure to do so shall constitute an unfair labour practice.”

In my view, the provisions of the Act set out above indicate beyond any doubt that the Tribunal had the power to entertain the respondents’ claims and quantify the amounts payable to them. Bata cannot, therefore, rely upon the third ground of appeal.

However, there are two determinations made by the Tribunal which I ought to consider. The first is the order that Bata should refund the sum of $47 563.34 to Pongweni and the sum of $31 416.53 to Machangu. And the second is the order that Bata should pay to the respondents their unpaid salaries and terminal benefits. With regard to both determinations it was submitted by Mr Fitches that there was no evidence supporting them and that it was, therefore, manifestly unreasonable to make them. I shall examine the determinations in turn.

In determining the amounts to be refunded to the respondents, the Tribunal relied upon the evidence given by the respondents. According to that evidence, whenever there was a large shortfall in the proceeds from the sale of shoes caused by theft of shoes at the retail outlets which they managed, the respondents were required by Shumba to put their own cash in the till in order to cover up the shortfall. They said that Shumba threatened that unless they carried out his instructions they would lose their jobs. They added that they kept written records of such payments and produced them as part of the evidence on the refunds claimed.

Mr Sutton, the Bata Company Secretary, who testified on behalf of Bata, did not deny that the respondents could have put their own cash in the tills to cover up the shortfalls. In his evidence he said:

“If a shortfall occurred … the manager basically would normally have two courses of action. He could disclose the shortage in his documentation, which is what he is supposed to do. … Or he could simply put the money in the tills and make up the difference. That would be covering up the shortage.”

However, the most important witness who should have been called by Bata was Shumba. Both Mr Sutton and Ms Miles, Bata’s counsel, informed the Tribunal that Shumba had been contacted and requested to come to the Tribunal and give evidence on behalf of Bata. They added that Shumba had refused to come, notwithstanding the fact that Bata had informed him that it would pay all his expenses.

Consequently, Bata closed its case without Shumba’s evidence. As a result, the respondents’ evidence against Shumba remained unchallenged, and the Tribunal accepted it. In my view, it was not unreasonable for the Tribunal to do that. In fact, it had no other option.

Finally, I wish to deal with the determination that Bata should pay the respondents their unpaid salaries and benefits. I find it difficult to understand why the claims for unpaid salaries and benefits suddenly came up when the Tribunal was considering the application for the quantification of the amounts to be refunded by Bata.

The claims were not raised by the respondents when they appeared before the labour relations officer in September 1995. They were not raised when the respondents appeared before the senior labour relations officer in December 1995, nor were they raised when the respondents appeared before the Tribunal in September 1999.

In fact, in the written reasons given by the labour relations officer in September 1995 he said the following:

“(The) complainants (i.e. Pongweni and Machangu) have, however, since been paid all their dues including pension benefits.”

If that were untrue, the matter should have been raised with the senior labour relations officer in December 1995 and with the Tribunal in September 1999.

I am, therefore, of the opinion that there was no basis for granting the order concerning unpaid salaries and benefits. That order must be set aside.

In the circumstances, the following order is made -

1. The order issued by the Tribunal on 31 January 2001 is altered so that it reads as follows –

“Bata Shoe Company Limited shall refund the sum of $47 563.34 to Macdonald Pongweni, and the sum of $31 416.53 to Augustine Machangu, together with interest at the prescribed rate, and costs of suit.”

2. Subject to that alteration, the appeal is dismissed with no order as to costs.

MALABA JA: I agree.

GWAUNZA JA: I agree.

Webb, Low & Barry, appellant's legal practitioners