DISTRIBUTABLE (109)

Judgment No SC 103/04

Civil Appeal No 124/03

EDGARS STORES MANAGERS ASSOCIATION v EDGARS STORES LIMITED

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, CHEDA JA & ZIYAMBI JA

HARARE MAY 31 2004, & FEBRUARY 28, 2005

A. Muchadehama, for the appellant

Y. Phillips, for the respondent

CHIDYAUSIKU CJ: This is an appeal from a determination of the Labour Court. The appellant is an association of employees of the respondent. The two parties had a running dispute between them since at least July 1999. The subject of the dispute related to the cost of living adjustment, upgrading the section managers, restoration of clothing allowances and the minimum rate of pay for grade 7 – 11 managerial employees.

In or about June 1999 the parties entered into an agreement on how to deal with, inter alia, minimum conditions of service including minimum salary and wage levels. Clause 6 of that agreement provides as follows:-

“In the event that the representatives of the Edgars Group and the Managerial Employees Committee are unable to reach agreement on any subject of debate, then, the matter shall be referred to external voluntary arbitration. The determination of the arbitrator shall be binding on both parties.”

When the parties were unable to reach an agreement on the above issue the appellant referred the dispute to a Labour Relations Officer in terms of s 93 of the Labour Relations Act [Chapter 28:5] (“the Act”) for his determination. The Labour Relations Officer made a determination in favour of the appellant. The respondent appealed against that determination to the Senior Labour Relations Officer. The Senior Labour Relations Officer upheld the determination of the Labour Relations Officer and dismissed the appeal.

The respondent thereafter appealed to the Labour Court and raised the point of jurisdiction. The Labour Court upheld the appeal. The appellant was dissatisfied with that determination and now appeals to this Court.

Although the notice of appeal consists of more than ten grounds of appeal, in essence, the notice of appeal contends that clause 6 of the agreement between the parties has been superceded by s 93 of the Act or should not be elevated to the level of the code of conduct. The learned President of the Labour Court was not persuaded by this contention. In allowing the appeal, she reasoned as follows:-

“I find that this was a wrong course to take. The parties are bound by the provisions of the Constitution they drafted. Both parties are supposed to respect and follow the provisions they mutually agreed to. There would have been nothing wrong if the respondent had referred the matter to a Labour Relations Officer as an arbitrator in terms of their Constitution and the Labour Relations Officer deals with the matter as such. By dealing with the matter as an unfair labour practice, the Labour Relations Officer erred, and her findings cannot be allowed to stand.

I do not understand the provisions of the Constitution to mean that the jurisdiction of the Labour Relations Officer in terms of section 93 of the Labour Relations Act is ousted. All the Constitution is saying is that for a matter that a deadlock has been declared, the parties are to refer it for external voluntary arbitration.

A party can still approach a Labour Relations Officer alleging an unfair labour practice in terms of section 93 of the Labour Relations Act if that matter has not been declared a deadlock.

Under the circumstances, I find that the Labour Relations Officer had no jurisdiction to entertain the matter. Accordingly both the Labour Relations Officer and the Senior Labour Relations Officer’s determinations are set aside. The parties are directed to comply with the provisions of their Constitution in cases where a deadlock has been declared.”

The reasoning of the President of the Labour Court cannot be faulted. It is quite clear that clause 6 of the agreement between the parties is an arbitration agreement in terms of article 7 of the First Schedule of the Arbitration Act [Chapter 7:15]. It follows, therefore, that article 8 applies to this case and it requires a court to stay proceedings if the parties so request, and refer the matter to arbitration unless it finds the agreement to be null and void, inoperative or incapable of being performed. Authority for the above proposition is to be found in the cases of Independence Mining (Pvt) Ltd v Fawcett Security Operations (Pvt) Ltd 1991 (1) ZLR 268; Zimbabwe Broadcasting Corporation v Flame Lily Broadcasting (Pvt) Ltd 1999 (2) ZLR 448 and PTA Bank v Elanne (Pvt) Ltd 2000 (1) ZLR 156.

Whether a dispute falls within the ambit of an arbitration clause is primarily a question of interpretation. If a clause does fall within the ambit of the arbitration clause then the court must stay the proceedings and refer the matter to arbitration.

In my view clause 6 does fall within the ambit of the arbitration clause and the proceedings must be stayed and referred to arbitration.

On this basis I am satisfied that there is no merit in the appeal and the appeal is dismissed with costs.

CHEDA JA: I agree

ZIYAMBI JA: I agree

Mbidzo, Muchadehama & Makoni, appellant's legal practitioners

Gill Godlonton & Gerrans, respondent's legal practitioners