GWAUNZA
JA: This
is an appeal against the entire judgment of the Labour Court sitting
at Bulawayo, handed down on 18 January 2010. After reading documents
filed of record and hearing counsel, we made the following order:
“IT
IS ORDERED:
1.
The appeal be and is hereby allowed.
2.
There shall be no order as to costs.
3.
The judgment of the Labour Court in cases No. LC/URG/MT/25/08 and
LC/MT/37/08 be and is hereby set aside and substituted with the
following:
'(i)
The urgent chamber application by the respondents be and is hereby
struck off the roll.
(ii)
The urgent chamber application by the applicants be and is hereby
struck off the roll.
(iii)
The retrenchment agreement entered into between the parties and
approved by the Retrenchment Board be and is hereby upheld.
(iv)
There shall be no order as to costs.'”
This
judgment contains the reasons for the order.
Before
I consider the merits of the appeal, it is pertinent to address two
procedural issues arising from the papers before the court.
(i)
Firstly, it was noted that the
notice
of appeal was filed eighteen days after leave to appeal was granted
by this court, instead of the fifteen days required by Rule
5(1)
of the Supreme Court (Miscellaneous Appeals and References) Rules,
1975. However, upon inquiry, counsel for the appellant, Advocate
Magwaliba
submitted that no hearing for the application for leave to appeal was
held since the application was granted on the basis of the papers
before the judge in question. The parties only got to hear of the
order on a later date.
It
is in my view important to point out in this respect that when an
order is made in chambers following a determination of the matter on
the papers before the judge and in the absence of the parties, the
registrar should promptly notify the parties of the order. This is
particularly so, since the dies
induciae
for any subsequent filing of papers in the matter would start to run
from the date of the order, not the date on which the order was
served or came to the notice of the parties concerned.
In
casu
it was the court's view that since the appellants could not be
faulted for the delay in noting the appeal, such late noting could
properly be condoned.
(ii)
Secondly, while the notice of appeal was brought under the citation
“Chris
Stylianou and Fred Driver and Sons (Pvt) Ltd and D.R. Henry (Pvt) Ltd
v Moses Mubita & 50 Others
SC117/11” it was not disputed that only 26 respondents were
properly before the court. The parties duly filed an agreed and
signed list of 26 named respondents, dated 30 March 2016. The court
used its discretion and accepted the revised list of respondents.
This
judgment therefore applies only to these 26 respondents.
The
factual background to the matter is as follows;
The
first appellant was at the time of the institution of these
proceedings in the court a
quo,
said
to be
the
'owner' of the second and third appellants. In legal terms he was
the director and sole shareholder thereof.
The
second and third appellants were companies duly registered in terms
of the laws of Zimbabwe.
The
respondents were employed by the second and third appellants and due
to viability constraints, a decision was taken to retrench them.
A
notice to retrench dated 15 April 2008 was duly issued, and bore the
names of those affected by the decision to retrench.
Efforts
were made to negotiate a retrenchment package but no agreement was
reached, prompting the parties to seek the assistance of the relevant
National Employment Council (“NEC”).
The
NEC gave the parties up to 15 May 2008 to reach a compromise, failure
of which the matter would be referred to the Retrenchment Board.
The
parties reached an agreement before this deadline.
As
required by section 12C(3) of the Labour Act
[Chapter
28:10]
(“the Act”), approval for the retrenchment of employees was
signed by the parties and sent to the Retrenchment Board which in
turn gave its approval in terms of the same section of the Act.
When
the appellants were about to implement the approved settlement, the
respondents changed their minds and approached the Labour Court with
a chamber application for an interdict whose effect would be to stop
the appellants from implementing the retrenchment package that was
approved by the Retrenchment Board.
The
respondents also cited irregularities in how the retrenchment
agreement came about, in particular, that it was not agreed upon
because some members of the Worker's Committee had not signed it.
They further alleged that the approved settlement was not ratified by
the affected employees and neither was it approved by the Minister.
In
the same urgent chamber application, the respondents were seeking a
final order
that
the agreement for the retrenchment package be declared null and void
and the Retrenchment Board's approval thereto, set aside. The final
order would allow reinstatement of the respondents without loss of
wages or benefits.
A
provisional order was granted on 23 May 2008. It interdicted the
first appellant from paying out retrenchment packages to the
respondents without an order of court.
The
main matter on the final order sought was set down for hearing on 4
July 2008 but was not heard on that day. The parties negotiated
further and signed another settlement document. When the appellants
sought to implement the new agreement, the respondents refused to
accept the package.
The
matter was then heard on 18 January 2010 and the learned judge
essentially held that the retrenchment itself was not done
procedurally and was therefore a nullity. In the judge's view, this
was a consequence of the fact that the Minister did not approve the
retrenchment despite the agreement of the parties thereto.
Aggrieved
by the decision of the Labour Court, the appellants unsuccessfully
sought the leave of that court to note an appeal to this court. They
thereafter, and successfully, approached this court for leave to
appeal to it, hence the instant appeal.
The
appeal was brought on nine grounds. However, a number of the grounds
were struck out for not being concise as required by the rules of
this court, for containing argument or for making no sense at all.
It
hardly needs re-emphasizing that grounds of appeal must conform to
laid down requirements.
The
issues that arose from the valid grounds of appeal were as follows:
(i)
Whether or not the court a
quo
erred
in making an order against the first appellant.
(ii)
Whether or not the Labour Court has the jurisdiction to grant an
interdict and a declaratory order.
I
will proceed to deal with the issues as outlined.
Whether
or not the court a
quo
erred
in making an order against the first appellant
The
first issue raises the important principle, under company law,
pertaining to the lifting of the corporate veil.
The
first appellant was cited in the court a
quo
as
the first respondent, in his perceived capacity as the 'owner' or
alter
ego
of the second and third appellants herein.
The
first appellant challenged this citation as improper, arguing that he
could not be cited in legal proceedings against and together with the
two companies, since they were at law separate legal personae
capable of suing and being sued in their own names.
The
respondent's counsel conceded, at the hearing of the appeal, that
the first appellant had not been properly cited, even as a respondent
in the court a
quo.
This
concession, we find, was properly made.
The
principle of lifting the corporate veil was aptly enunciated by Patel
J (as he then was) in the case of Deputy
Sherriff Harare v Trinpac
Investments (Pvt) Ltd & Another
HH121-11,
where
among other authorities, he cited the following apposite remarks from
the South African case of Cape
Pacific Ltd v Lubner Controlling Investments (Pty) Ltd & Others
1995 (4) SA 790 (AD) at 803-804:
“It
is undoubtedly a salutary principle that our Courts should not
lightly disregard a company's separate personality, but should
strive to give effect to and uphold it. To do otherwise would negate
or undermine the policy and principles that underpin the concept of
separate corporate personality and the legal consequences that attach
to it. But where fraud, dishonesty or other improper conduct (and I
confine myself to such situations) is found to be present, other
considerations will come into play. The need to preserve the separate
corporate identity would in such circumstances have to be balanced
against policy considerations which arise in favour of piercing the
corporate veil.… and a court would then be entitled to look to
substance rather than form in order to arrive at the true facts, and
if there has been a misuse of corporate personality, to disregard it
and attribute liability where it should rightly lie. Each case would
obviously have to be considered on its own merits.”
In
casu,
no
allegation of fraud, dishonesty or other improper conduct was
levelled against the first appellant, which might have justified the
lifting of the corporate veil of the other two appellants.
Indeed,
the applicants gave no good explanation before the court a quo
to
justify the citation of the first appellant save to state that he was
the 'owner' of the two appellant companies.
The
first appellant was therefore improperly cited and no part of the
court a
quo's
judgment was binding on him. The appeal therefore succeeds in this
respect.
Whether
or not the Labour Court has the jurisdiction to grant an interdict or
a declaratory order
The
respondents approached the court a
quo
on
an urgent chamber application basis provisionally
seeking
an interdict. On the return date of the provisional order, they
sought a declaratory order to the effect that an agreement by the
works council was null and void.
I
will deal with the interdict first and then consider the declaratory
order.
Paragraph
1 of the provisional order under “interim relief” which was
granted by the judge a
quo
on 23 May 2008 read as follows:
“1.
The 1st
respondent
be and is hereby interdicted from paying out retrenchment packages in
respect of all 51 applicants (now respondents) without an order of
the court.”
The
question that this order raises is whether or not the Labour Court
has the jurisdiction to grant an interdict.
Whenever
the powers of the Labour Court come into question, it must always be
borne in mind that it is a creature of statute (Dombodzvuku
v CMED (Pvt) Ltd
SC31/12; Nyahora
v CFI Holdings (Pvt) Ltd
SC81/14) and therefore can only exercise those powers that are given
to it by the Labour Act, its enabling statute.
Section
89 of the Labour Act determines the functions, powers and
jurisdiction of the Labour Court. The relevant section is section
89(1)(a) which reads as follows:
“89
Functions, powers and jurisdiction of Labour Court
(1)
The Labour Court shall exercise the following functions —
(a)
hearing and determining applications and appeals in terms of this Act
or any other enactment; …”
This
court in National
Railways of Zimbabwe v Zimbabwe Railway Artisans Union & Others
SC8/05
was
faced with the same question, that is whether or not the Labour Court
has the jurisdiction to entertain an application for an interdict.
Ziyambi JA held as follows:
“… before
an application can be entertained by the Labour Court, it must be
satisfied that such an application is an application 'in terms of
this Act or any other enactment'.
This
necessarily means that the Act or other enactment must specifically
provide for applications to the Labour Court, of the type that the
applicant seeks to bring.… nowhere in the Act is the power granted
to the Labour Court to grant an order of the nature sought by the
respondents in the court a
quo,
nor have I been referred to any enactment authorising the Labour
Court to grant such an order.”
It
is thus clear on the basis of this authority, that the Labour Court
has no power or jurisdiction to grant an interdict.
When
a court issues an order which it is not empowered to grant, that
order is a nullity.
It
follows that the interdict granted by the court a
quo
was
void ab
initio.
Turning
to the declaratory order granted by the court a
quo,
the
same question arises as to whether or not the Labour Court has the
jurisdiction to make such orders.
Paragraph
4 of the provisional order attached to the urgent chamber application
a
quo
read
as follows:
“4.
The agreement signed by the works council will
be and is hereby declared null and void.” (my emphasis)
The
same question was deliberated upon by Ziyambi JA in UZ-UCSF
Collaborative Research Programme in Women's Health v David
Shamuyarira
SC10/10
where she held as follows:
“… nowhere
in the Act is the power granted to the Labour Court to grant an order
of the nature (declaratory order) sought by the respondents in the
court a
quo,
nor have I been referred to any enactment. So, too, in this case,
there is no provision in the Act (nor have I been referred to any
provision in any other enactment) authorizing the Labour Court to
issue the declaratory order sought by the respondent. It is therefore
my view that the Labour Court ought to have dismissed the application
for want of jurisdiction authorizing the Labour Court to grant such
an order.”
It
is therefore evident that the court a
quo
acted
outside its jurisdiction.
Consequently,
the declaratory order, like the interdict it granted, was null and
void.
The
declaratory order was in any case, premised on the interdict that the
court had already found was invalidly made. It therefore had no legal
leg to stand on.
For
these reasons, we made the order setting aside both the interdict and
the declaratory order.
It
was in view of the foregoing that the court made the order set out at
the beginning of this judgment.
GUVAVA
JA: I
agree
BHUNU
JA: I
agree
Coghlan
& Welsh,
appellants
legal practitioners
Mudenda
Attorneys,
respondents
legal practitioners
1.
See
Addendum to this judgment
