REPORTABLE (35)

Judgment No SC 42/05

Civil Appeal No 221/04

MIDLANDS STATE UNIVERSITY COUNCIL v MIDLANDS STATE UNIVERSITY LECTURERS ASSOCIATION

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, CHEDA JA & ZIYAMBA JA

HARARE MAY 5 & OCTOBER 3, 2005

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

G.M. Gijima, for the respondent

CHIDYAUSIKU CJ: The facts of this matter, which are common cause, are as follows. The respondent is an association of lecturers employed by Midlands State University. The Midlands State University is represented in this matter by the appellant which is the Council of the University.

A dispute arose between the parties as to the benefits payable by the appellant to the respondent’s members. The respondent’s members engaged in a collective job action. The appellant applied for a show cause order to the Labour Court. The parties consented to the matter being referred to compulsory arbitration in terms of the Labour Act [Chapter 28:01] (hereinafter referred to as the Act). The consent order provides as follows:-

“1. The respondent’s members’ Collective Job Action embarked on on the 22^nd August 2003 and terminated on the 6^th October 2003 was illegal and unlawful for want of compliance with the provisions of the Labour Act.

2. Both parties consent to the issue that gave rise to the Collective Job Action being referred to compulsory arbitration in terms of Part XII of the Act.

3. On or before the 14^th October 2003 each party appoints its own arbitrator and the two arbitrators appointed shall appoint a third arbitrator who shall be the chairperson.

4. Arbitration on the matter shall commence by the 20^th October 2003.

5. The arbitrators shall determine the matter on or before the 21^st November 2003.”

Three arbitrators were duly appointed to determine the dispute and made the following award:-

“1. We award for the lowest grade lecturer, a staring salary of $1 200 000 per month, plus 15% transport allowance and 15% housing allowance, a total package of $1 560 000 per month, with effect from 1 July 2003.

2. We award for each of the other grades of academic staff as shown in the table set out in the circular letter to State Universities from the Permanent Secretary for Higher and Tertiary Education dated 22 August 2003, a proportionate increase.

3. We award an increment of 30% on basic salaries with effect from 1 October 2003.”

In making the determination the arbitrators admitted to facing a number of constraints. Among the constraints the arbitrators faced were firstly, that the government or more specifically the Minister of Higher and Tertiary Education was not a party to the proceedings and yet, in their view, it lurked in the background as it is the paymaster of all State Universities. Secondly, separate arbitration awards had been made to other State Universities and thirdly, both parties indicated that they did not wish to address the arbitrators in support of their cases. The parties left it to the arbitrators to decide the matter on the papers.

The arbitrators adopted the following approach to these constraints:-

“The chain of financial authority for state universities is one of the major weaknesses. The staff have to negotiate with the University authorities. The University authorities have to negotiate with the Ministry of Higher and Tertiary Education. They are not even allowed to increase their incomes by charging students economic fees. Fees are controlled by Government at ridiculously low levels. And finally that Ministry has to negotiate with the Ministry of Finance and Economic Development. It is apparent to us that the University authorities in the present case are in sympathy with the claims of the academic staff. The only objection they have put in the face of those claims is that they fear they will not get the funds from the Ministry to pay the salaries and allowances sought.

We have no indication as to where lie the sympathies of the Ministry of Higher and Tertiary Education, but we know they are constrained ultimately by the Budget, and we have heard the views of the Minister of Finance on the question of a Supplementary Budget.

Our mandate from the Labour Court is simply to arbitrate upon the issues which gave rise to the dispute. Those issues were salaries and allowances. We are therefore required to determine what are fair and reasonable salaries and allowances payable to academic staff at Midlands State University with effect from 1 July 2003. We cannot be influenced by the attitude of a third party. And in any event, insofar as that third party is the government of the country, we must assume that the government is prepared and indeed anxious to see academic staff adequately rewarded so that University standards are not just maintained, but significantly improved. Our Universities are in an appalling state. They need a rescue operation, not a financial garrote.

We cannot assume that the government will follow political policies regardless of the economic impact of those policies upon its people. We will therefore proceed on the basis that some means will be found to fund the level of salaries and allowances we award as fair and reasonable.”

Having adopted this approach the arbitrators made the determination I have set out above.

The appellant was dissatisfied with the determination of the arbitrators and noted an appeal to the Labour Court. The appeal was noted in terms of s 98(10) of the Act. In terms of the Labour (Settlement of Disputes) Regulations Statutory Instrument 217/03 an appeal has to be noted within 14 days. The determination was handed down on the 19^th December 2003. The appellant noted its appeal on 17 February 2004. Thus the appeal was out of time. The appellant’s legal practitioner was under the mistaken belief that the appellant had 3 months within which to note an appeal in terms of s 98 of the Arbitrators Act [Chapter 7:15]. Upon realizing the mistake the appellant applied for condonation of the late noting of an appeal or for an extension of time within which to note an appeal. The application was made to the Labour Court. The Labour Court accepted that the delay was not in-ordinate and the explanation for the delay plausible. However, the Labour Court was of the view that the appellant’s prospects of success on appeal were non-existent and refused the application on that basis.

The appellant was dissatisfied with the outcome and appeals to this Court upon the following grounds set out in the Notice of Appeal:-

“1. The learned Honourable President of the Labour Court (herein called The President) erred and was completely misdirected when he dismissed the appellant’s application for condonation to file its Notice of Appeal out of time on the basis that the appeal had no prospects of success as it was based on a question of fact, and not law.

2. The learned Honourable President erred and was misdirected when he ruled that the Labour Court could ‘not order the Government to do what it (was) not legally obliged to do’ whereas there was absolutely no argument nor prayer for the Labour Court to order Government to do anything. The application was among other grounds, for the Arbitral Award, to be set aside on the basis that Government, an interested party and the true paymaster of the respondent was not a participant in the Arbitration proceedings. The argument was that this was a basis upon which the Arbitral Award should be set aside.

3. The court a quo erred and was misdirected when it made a finding that appellant had used the wrong forum in that the basis of its appeal was based on a question of fact and not law.

4. The learned Honourable President erred in completely ignoring, and not addressing, nor alluding to, nor distinguishing, nor discrediting, nor applying his mind to the plethora of eminent legal authorities that were furnished to him, that clearly, in no uncertain terms, made it clear that appellant’s Grounds of Appeal were based on a question of law, and not fact. This misdirection is made grossly glaring by the fact that not even one single legal authority was furnished by the court a quo in support of its insupportable finding.

5. The Honourable President erred and misdirected himself when he made an order for costs against appellant.”

The above grounds of appeal were subsequently amended without, in my view, adding substance to the issues that fall for determination by this Court.

The issue that falls for determination by this Court is aptly summarised by Mr Andersen, for the appellant, in paragraph 12 of his Heads of Argument which reads:-

“The essential issue between the parties is as to whether it was competent for an award to be made for increases which had not been approved by the responsible Minister.”

In dismissing the application for the extension of time in which to note an appeal the learned President of the Labour Court reasoned thus:-

“However applicant has difficulties concerning the merits of its case. The heart of applicant’s case on the merits is set out in Mr Manners Jaravaza’s supporting affidavit dated 26^th March 2004 which in paragraph 12 reads as follows:

‘Applicant submits that it has bright prospects of success on appeal as it is obvious that the salary dispute can never be resolved without the inclusion and participation of Government. It is a matter of common knowledge and public record that applicant relies on funding from Government. Applicant on its own is hopeless in addressing or enforcing the Arbitral Award.’

The same point is applied in the grounds of appeal by the averment that the award should be set aside because of respondent’s failure to cite the Government when it initiated proceedings in this matter. But the point, which is well made in respondent’s Heads of Argument, is that the Government is not legally obliged to assist the applicant financially. The applicant was established in terms of the State University In The Midlands Act [Chapter 25:21] (promulgated the Act 4 of 1999 hereafter called the Act). In terms of section 4(2) of the Act the applicant itself is given powers to enter into contract, to appoint its staff, to take fees and to borrow monies for any purpose which applicant’s council thinks fit. The Act gives the applicant legal responsibility for its financial affairs. Nowhere in the Act is the Government saddled with an obligation to bankroll the applicant. Given this scenario joinder of the Government does not achieve anything. The arbitrator/s of this court cannot order Government to do what it is not legally obliged to do. Government may well have been funding the applicant and applicant may have no other source of funding but that does not change the legal position.”

In essence the learned President concluded that the appellant was a legal persona with capacity to employ the respondent and determine the respondent’s salaries without the consent of the Minister.

Mr Andersen submitted that it is a requirement of the law that the Minister’s consent be obtained before the appellant can increase the salaries of the respondent’s members. In this regard he relied on the case of PTC Management Employees Workers’ Committee v PTC & Anor 1998 (1) ZLR 440 (H) at 450A-B. He argued that in that case it was pointed out that in terms of s 39 of the Audit and Exchequer Act [Chapter 22:03] increases in salary could not be made without the Minister’s approval. He also sought to rely on sections 34,35,36 and 37 of the Audit and Exchequer Act and s 109(6) of the Constitution of Zimbabwe.

Section 33 of the Audit and Exchequer Act reads:-

“33. No payment of expenditure to be incurred without approval

Subject to this Act, no designated corporate body shall commit itself to or incur –

(a) …

(b) expenditure other than capital expenditure unless provision therefore has been made in revenue and expenditure budget approved in terms of this part or such expenditure has been approved by the appropriate Minister.”

Section 34 provides for the submission of budgets in respect of revenue and expenditure for approval and budgets approved may be varied in terms of sections 36 and 37. The Constitution provides generally that there be no expenditure from the consolidated revenue or other public funds without approval. Section 109(6) of the Constitution in particular provides that no law shall increase or authorise an increase in salaries in respect of the “Public Service” unless the Minister has agreed thereto. Mr Andersen also argued that “Public Service” is widely defined in s 12 as the service of the State which would include the state Universities.

Mr Gijima on the other hand submitted that s 109(6) of the Constitution cannot apply to members of the respondent because “Public Service” as defined in s 113 of the Constitution does not include the members of the respondent. He argued that the members of the respondent were not included in the definition of “Pubic Service” which reads in the appropriate parts that:-

“’Public Service’ means the service of the State but does not include –

(c) service as a member of any Commission established by this Constitution or body corporate established directly by or under any Act of Parliament for special purposes specified in that Act …”

He submitted that the Midlands State University was established in terms of the Midlands State University Act [Chapter 25:21], Act 4 of 1999 for special purposes specified in that statute. Accordingly this section of the Constitution does not apply to the parties in this matter. Mr Gijima noted, quite correctly in my view, that this section of the Constitution is concerned with the making of a law and not salary increments which are at issue in this case.

Mr Gijima further submitted that the appellant is not a parastatal but a body corporate with an independent legal persona. It is run by the Council whose functions are set out in s 11 of the Midlands State University Act, in particular, s 11(1)(g) of that Act provides that:-

“(1) Subject to this Act and the Statutes, the Council shall –

(g) cause to be prepared annually estimates of income and expenditure for the following financial year.”

There is no provision in the Midlands State University Act for requiring the Council to submit any statements of financial estimates to the Minister nor is there a provision for the approval of the Minister to be sought for any financial purpose unless he has designated certain employees. The employees designated are those in grade one and two and some in grade 3. The respondent’s members, as lecturers, are not included and are in grade 6.

Mr Gijima further submitted that the Audit Act does not further the case of the appellant as Part VI of the Act deals with statutory bodies. Section 32 of the Audit Act reads:-

“In this Part –

‘designated corporate body’ means –

(a) any statutory body; or

(b) any corporate body or company in which the State has a controlling interest, whether by virtue of holding or controlling shares therein by virtue of a right of appointment of members to the controlling body thereof or otherwise;

and which is prescribed to be a designated corporate body for the purposes of this Part.”

Mr Gijima contended that it had not been argued or averred by the appellant that the Midlands State University is included in the description of designated corporate body that was prescribed.

It would appear to me that the legal propositions made by both counsel are correct. Mr Andersen’s submissions were predicated on the assumption that the Midlands State University is a designated corporate body which is prescribed. There is no basis for the court to make that assumption without which Mr Andersen’s contention cannot succeed. The PTC Management Employees Workers’ Committee case, supra, which Mr Andersen sought to rely on involved a designated corporate body which was prescribed. I accept, as correct, Mr Gijima’s contention. On that basis I agree with the conclusion of the learned President of the Labour Court that the appeal has no prospects of success and the application for condonation was correctly dismissed on that basis.

The appellant also argued that it was impossible for it to pay the award. I agree with the learned President of the Labour Court that the issue of the capacity of the appellant to pay the award is an issue of fact that could only be determined by the arbitrators and no appeal to the Labour Court on an issue of fact can be entertained by the Labour Court. The appellant elected not to give evidence of its capacity to pay the demanded salary increments. It elected to have the arbitrators determine that issue as best as they could on the papers. There is nothing on the record to show that on the papers before the arbitrators, the appellant had established its inability to pay the increases.

The President of the Labour Court was correct in concluding that in terms of the Midlands State University Act, the Minister or the government has no legal obligation to pay the salary increases to the respondent. Neither the arbitrators, nor the Labour Court nor indeed this Court can issue an order obliging the government to pay the salary increases to the respondent. The remedy to the anomaly making the government the de facto paymaster while the appellant is the de jure paymaster of the respondent is in the hands of the government that should amend the law to remove the anomaly.

In the result the appeal is dismissed with costs.

CHEDA JA: I agree.

ZIYAMBI JA: I agree.

Dzimba, Jaravaza & Associates, appellant's legal practitioners

Danziger & Partners, respondent's legal practitioners