The question for determination relates to the rights of an
employee who is on suspension before a disciplinary hearing is instituted and
is found not guilty of the acts of misconduct preferred against him or her at
the hearing.
The terms of reference on arbitration were:
(1) Whether or not the employer committed acts of unfair
labour practice by not reinstating the claimant;
(2) Whether or not the matter is prescribed; and
(3) To determine the appropriate remedy in the matter.
The background facts are as follows:
The respondent was employed by the appellant as a Managing
Director for the Health Care Division. On 23 July 2008, he was suspended from
duty on allegations of misconduct for contravention of provisions of the Labour
(National Employment Code of Conduct) Regulations S.I.15/2006 (“the Code”) that
is to say:
(a) Section 4(a): act or conduct or omission inconsistent
with the express or implied conditions of service.
(b) Section 4(b): wilful disobedience of a lawful order.
The Hearing Officer appointed by the appellant found the
respondent not guilty of the charges. In his ruling he stated:
“For the reasons set out above, I find the employee not
guilty on both charges.”
After the respondent was acquitted of the charges, he wrote
to the appellant requesting payment of money which he said would form part of a
package to be agreed upon. The respondent did not insist, at that time, on
being taken back to work. The appellant went ahead and deposited the money into
the respondent's bank account. The appellant did not respond to the
respondent's letter of what he suggested would be an exit package to be agreed
upon by the parties. It did not make a counter-offer on the exit package.
While on suspension, the respondent was doing work for
Graniteside Chemicals (Pvt) Ltd. It was, however, argued on behalf of the
respondent that he was engaged by Graniteside Chemicals (Pvt) Ltd as a locum
tenens.
After the respondent was found not guilty of the alleged
misconduct for which he was suspended, the appellant did not act in terms of section
6(2)(b) of the Labour (National Employment Code of Conduct) Regulations, S.I.15
of 2006 which provides that:
“(2) Upon serving the employee with the suspension letter
in terms of subsection (1), the employer shall, within 14 working days
investigate the matter and conduct a hearing into the alleged misconduct of the
employee and, may, according to the circumstances of the case –
(a)…,.
(b) Serve a
notice, in writing, on the employee concerned removing the suspension and
reinstating such employee if the grounds for suspension are not proved.”…,.
The respondent took the view that the appellant was not
reinstating him because of the letter it had written to him indicating that it
was considering reinstating him on the payroll. He had interpreted the letter
to mean that the appellant wanted to reinstate him in his former position. He
approached a Labour Officer accusing the appellant of an unfair labour practice
in that it had refused to reinstate him into his job. The matter was referred
to compulsory arbitration. The arbitrator found for the respondent and ordered
the appellant to reinstate him in his former position without loss of salary
and benefits. The arbitrator also ordered payment of damages in lieu of
reinstatement should the working relationship between the parties prove to be
untenable. The appellant appealed to the Labour Court and the respondent
cross-appealed alleging that the arbitrator had erred in his computation of the
damages in lieu of reinstatement. The Labour Court dismissed both the main
appeal and the cross appeal.
The appellant has appealed against the judgment of the
Labour Court.
Having regard to the issues that were referred to
arbitration it is important for the Court to first decide whether the appellant
committed an unfair labour practice by failing to reinstate the respondent
after being acquitted of the charges that were pressed against him. If it is
established that indeed the appellant committed an unfair labour practice by
not reinstating the respondent, the other grounds of appeal will be dealt with.
The question is whether the order of reinstatement without
loss of salary and benefits and payment of damages in lieu of reinstatement was
competent considering the provisions of the Labour (National Employment Code of
Conduct) Regulations, S.I.15 of 2006.
Depending on the circumstances of the case, an employer
whose employee was on suspension on allegations of having committed an act of
misconduct may serve a notice in writing on the employee reinstating him or her
in the job if the grounds of suspension are not proved at a disciplinary hearing. Whilst an employer is under an obligation, in
terms of section 6(2)(b) of the Labour (National Employment Code of Conduct)
Regulations, S.I.15 of 2006, to investigate the allegations of misconduct
leveled against an employee and conduct a disciplinary hearing within fourteen
days following the employee's suspension, the employer is not under an
obligation to serve the employee with a notice of removal of the suspension
after he or she is found not guilty of the alleged misconduct for which he or
she was suspended. The respondent must have been aware of what the appellant
could have done. Whether the appellant decided to serve the respondent with the
requisite notice depended on the circumstances of the case and the exercise of
its discretion. The appellant was not under an obligation to serve the notice
on the respondent reinstating him to the job following his acquittal of the
charges of misconduct if the circumstances of the case did not allow for such a
reinstatement.
Failure to serve a notice of removal of a suspension, in
terms of section 6(2)(b) of the Labour (National Employment Code of Conduct)
Regulations, S.I.15 of 2006, is not necessarily an unfair conduct. Whether it
is unfair conduct will depend on the circumstances of the case.
An employer may be entitled not to serve the employee with
a notice of removal of the suspension if the behavior of the employee is such
that it would satisfy any reasonable employer that he or she regards the
relationship between the parties to have broken down to the extent that he or
she no longer wants to work for the employer. The word reinstatement in section
6(2)(b) of the Labour (National Employment Code of Conduct) Regulations, S.I.15
of 2006 does not have the same meaning it has when it forms the content of an order directed at an employer following a
finding that the employee was unfairly dismissed.
In the case of the respondent he had been suspended. He was
not dismissed.
There had been no termination of the relationship of
employment between the parties. Reinstatement to the job would have the limited
meaning of removal of the suspension so that the employee could resume work.
There cannot be a question of payment of damages in lieu of reinstatement. The
ordinary meaning of reinstatement is the restoration of a person in his or her
former job with no loss of salary and benefits.
In Chegutu Municipality v Manyora 1996 (1) ZLR 262 (S) it
is stated that 'reinstatement' means only “putting a person again into his
former job as of the present or some future date.”
In its wide sense, an employee who is allowed to resume
work upon the removal of suspension is reinstated.
Where an order of reinstatement is accompanied by an option
to pay damages in lieu of reinstatement it means that there has been a
determination by the tribunal that the employee had been unfairly dismissed. In
other words, an order of reinstatement, coupled with an option for payment of
damages in lieu of reinstatement, is evidence of the fact that the tribunal was
faced with the question of the fairness or otherwise of a dismissal of an
employee.
The authorities suggest that ordinarily, reinstatement, in
the mould contemplated by the respondent, is only possible where it is preceded
by a finding of wrongful dismissal. In Blue Ribbon Foods Limited v Dube N.O.
& Anor 1993 (2) ZLR 146 (SC) the court held:
“Blue Ribbon
Foods, after all, had sought authority to dismiss him and had been given that
authority by the Labour Relations Officer. Gonyora had a right of appeal
against the whole, or, presumably, part of that order. Once he exercised that
right, and subsequently took alternative employment, it seems to me that he was
doing no more than waive part of his right, namely, his right to claim
reinstatement and his right to claim pay and allowances beyond the date of his
assuming other employment. His taking alternative employment was, in short, not
to be seen as a breach of contract but as a partial waiver of his right.”
The same position is confirmed in United Bottlers (Pvt) Ltd
v Murwisi 1995 (1) ZLR 246 (SC) wherein it was held, in part:
“It will be apparent that the procedure under s 3 of the
Regulations arises when the employer has suspended the employee without pay. He
has not dismissed the employee. So no question of wrongful dismissal arises. The
application by the employer to the LRO is an application for an order
terminating the contract of employment. It is logical that, if that application
fails, the contract of employment is not terminated. The employee's suspension
is found to have been unjustified. He is reinstated. There is no provision for
any other treatment. The employee is regarded as never having been suspended,
because the grounds for suspension were the same as the grounds for dismissal.
If the grounds were insufficient to justify dismissal, they were, by the same
token, insufficient for suspension.”
Back-pay is associated with reinstatement following a
determination that the dismissal of an employee was unfair because back pay
forms a large portion of damages payable in lieu of reinstatement. So, an order
of payment or reimbursement is evidence of a finding by the tribunal that the
employee was unfairly dismissed. These
statements cannot be validly made where the issue before the tribunal was not
one of unfair dismissal. The concept of backpay was defined in Leopard Rock
Hotel Company (Pvt) Ltd v Van Beek 2000 (1) 251 (SC) as follows:
“'Back-pay' is thus a concept associated with
reinstatement. If an employee is reinstated she will normally be awarded back pay.
If she succeeds in proving wrongful dismissal, but is not reinstated, she will
be entitled to 'damages', a major element of which will be backpay. Perhaps,
more correctly, one should say the damages will be assessed by reference to the
back pay lost. But here, the back-pay will be limited to a period from the date
of wrongful dismissal to a date by which she could, with reasonable diligence,
have obtained alternative employment. See Ambali supra and Myers supra.”
An employee who is suspended is not dismissed from
employment ipso facto. Suspension and dismissal are different, though related,
concepts. The respondent adverted to being reinstated to his job in his
submissions before the arbitrator. A suspended employee does not lose his
employee status. The respondent lost sight of the real issue and claimed the
wrong thing. At the same time, the arbitrator related to mitigation of damages.
The concept is explained in Ambali v Bata Shoe Co Ltd 1999 (1) ZLR 417 (S) as follows:
“I think it is important that this court should make it
clear, once and for all, that an employee who considers, whether rightly or
wrongly, that he has been unjustly dismissed, is not entitled to sit around and
do nothing. He must look for alternative employment. If he does not, his
damages will be reduced. He will be compensated only for the period between his
wrongful dismissal and the date when he could reasonably have expected to find
alternative employment. The figure may be adjusted upwards or downwards. If he
could, in the meanwhile, have taken temporary or intermittent work, his
compensation will be reduced. If the alternative work he finds is less
well-paid his compensation will be increased.”
The moment the arbitrator related to the concept of
mitigation of damages he believed that the matter before him was one of unfair
dismissal and yet the respondent had not been dismissed from employment.
Reinstatement is a remedy which is used to place an
unfairly dismissed employee into a position he would have been had the unfair
dismissal not been committed. An order for reinstatement is therefore usually
accompanied by an order of back pay. The employee is reinstated to his former
position without loss of salary or benefits and the reason for back-pay is to
compensate the employee for the period he would have been on wrongful
dismissal. Reinstatement, in its ordinary meaning, suggests that the period of
service between dismissal and resumption of service is deemed unbroken. See JOHN
GROGAN, Workplace Law 11th Ed…,.
Irish authorities also confirm the understanding of
reinstatement as detailed above. Reinstatement is an order that;
“The employer shall treat the complainant, in all respects,
as if he had not been dismissed, JOHN BOWERS, Bowers on Employment Law, 2nd
ed, 1986, 238. An order for
reinstatement is defined as an order that the employer restores the employee to
his former position, treating him in all respects as if he had never been
dismissed, S.D. ANDERMAN, The Law of Unfair Dismissal, 2nd ed, 1985, 281.”
There is advertence to 'dismissal' and 'former position' in
the authorities. Reinstatement of this kind cannot be understood outside the
context of a severed employment relationship.
The arbitrator gave an order for reinstatement with an
alternative of damages in lieu of
reinstatement should reinstatement prove to be no longer an option. He
understood the issue as being that of reinstatement in the ordinary sense of
the word. The arbitrator could not have made the order in the terms in which he
made it if he did not consider that the respondent had been unfairly dismissed.
That was also the understanding the respondent had when he
made an unfair labour practice complaint to the Labour Officer. If the
respondent was genuine in his allegation that he did not regard himself
dismissed, he ought to have cross appealed to the Labour Court seeking the
setting aside of the order of damages in lieu of reinstatement because the only
claim he could have made under section 6(2)(b) of the Labour (National
Employment Code of Conduct) Regulations, S.I.15 of 2006 was for an order that
the circumstances of his case justified the removal of the suspension and his
reinstatement in the sense of being allowed to work.
If this case was about 'reinstatement to the payroll', as
alleged, the respondent would have distanced himself from that part of the
judgment which related to damages in lieu of reinstatement, a concept
associated with dismissal. All this points to the respondent bringing a claim
predicated on a perceived dismissal from the appellant's employ. The respondent
cross-appealed to the Labour Court alleging that the arbitrator erred in
reducing the claim for damages in lieu of reinstatement from 10 years to 5
years. The respondent had made a claim for damages as an alternative to
reinstatement in his submissions before the arbitrator. The respondent deemed
himself dismissed because damages in lieu
of reinstatement do not arise where there is no termination of employment.
That is the case the arbitrator understood and determined. The respondent did
not place before the arbitrator a case of 'reinstatement on the payroll' as he
now contends. All the facts show that the respondent regarded himself as no
longer the appellant's employee. This attitude started when he took employment
with another company whilst under suspension.
There is an allegation by the respondent that the damages
in lieu of reinstatement were adverted to in the award only because the
appellant had, at that stage, shown that it was not going to take the
respondent back.
This could not have been the case because the law is clear
on this point.
The terms of reference to arbitration became important at
this point. At any rate, the fact that the appellant had declared its
unwillingness to comply with section 6(2)(b) of the Labour (National
Employment Code of Conduct) Regulations, S.I.15 of 2006 is what gave rise to
the dispute.
A suspended employee does not lose employment simply
because he or she is suspended. He or she remains employed and can be called
upon any time by the employer to perform work, United Bottlers v Kaduya 2006
(2) ZLR 150 (S).
If an employee who has been suspended and charged with an
act of misconduct in terms of the Labour (National Employment Code of Conduct)
Regulations is found not guilty and the employer refuses to lift the suspension,
the remedy lies in the procedure for conciliation and compulsory arbitration.
The dispute the respondent would have taken to a Labour
Officer, in terms of section 93 of the Labour Act [Chapter 28:01], would
have been over the continued treatment of himself as a person on suspension
when his acquittal on the charges of misconduct by the disciplinary authority
had the effect that he had to be treated as if he had not been suspended.
The circumstances of the case show that the appellant did
not act unfairly in not serving the respondent with a notice of removal of the
suspension. The respondent behaved in a manner that showed that he no longer
regarded himself as the appellant's employee. Not only did he take employment
with another company whilst on suspension, he wrote to the appellant soon after
he was found not guilty of the alleged misconduct for which he had been
suspended requesting for an advance payment of part of a severance package. The
respondent could not have been proposing a severance package if he genuinely
wanted to be accepted back at work. Once the appellant accepted the
respondent's request for an advance payment of money to be deducted from a
severance package to be agreed upon by the parties, as proposed by the
respondent, it was entitled not to serve him with a notice of removal of the
suspension in terms of section 6(2)(b) of the Labour (National Employment Code
of Conduct) Regulations, S.I.15 of 2006. Whilst section 6(2)(b) of the Code
contemplates a preventive suspension, the circumstances of the respondent's
conduct after he was found not guilty of the alleged misconduct for which he
was suspended satisfied the appellant that he was no longer interested in
working for it.
The arbitrator and the Labour Court failed to appreciate the
fact that a wrong remedy was being pursued by the respondent.
The appeal must succeed.
IT IS
ORDERED THAT:
(1) The appeal be and is hereby allowed with costs.
(2) The order of the court a quo be and is hereby set aside
and in its place the following is substituted:
“(i) The appeal is allowed with costs.
(ii) The arbitral award is set aside and substituted with
the following:
(a) The appellant is not guilty of unfair labour practice
as claimed.”
(iii) The cross-appeal is dismissed with costs.
