This is an appeal against the quantum of damages in lieu of
reinstatement that was awarded to the respondent by the arbitrator and upheld,
on appeal, by the Labour Court.
The respondent was employed by the appellant as a Farm
Manager in November 2008. On 30 November 2009, without any prior warning, the
respondent, through a letter, was given a month's notice of termination of his
services, effective from 1 December 2009 to 31 December 2009. The respondent
was also asked to vacate the farmhouse and move off the property by not later
than 31 December 2009.
On 21 December 2009, the appellant paid the respondent $2,100=
broken down as follows:
(a) $900= which was due in respect of payment shortfalls
for the months of December 2008, January 2009 and February 2009.
(b) $600= for 26 days of leave pay; and
(c) $600= being 2 months' pay as a termination benefit (for
December 2009 and January 2010).
On 8 February 2010, the respondent wrote a letter of
complaint to a Labour Officer and requested that there be a hearing which would
facilitate the payment of what he claimed to be due to him by the appellant.
The process culminated in the issuance of a certificate of no settlement and
the matter was referred for compulsory arbitration.
The issues for determination by the arbitrator were stated
as:-
1. To determine whether the dismissal was lawful and fair.
2. To determine the nature of contract, whether open ended
or not.
3. To determine the quantum of terminal benefits.
4. To determine the
appropriate remedy.
The initial arbitral award made by the arbitrator is not on
record. What is on record is the award of 21 July 2010. Therein, the
arbitrator stated that the matter was before him for quantification of damages.
He stated that in his (earlier) award he had requested the parties to negotiate
on the quantum but they had failed to reach agreement. He stated that from the
submissions by both parties it was clear to him that the parties were agreed on
the headings under which remuneration was due to the respondent but were not
agreed on the quantum. He listed the agreed headings as:
(a) Salaries.
(b) Medical Aid.
(c) School fees.
(d) Accommodation.
(e) Fuel.
(f) Domestics/Utilities.
(g) Electricity and water.
(h) Tobacco seed.
(i) Leave entitlements.
The arbitrator proceeded to award specific amounts in
favour of the respondent for each of the headings as well as an additional one
titled “commission.” The awards that the arbitrator made in respect of
salaries, accommodation, fuel, domestic/utilities as well as electricity and
water were calculated on the basis of a monthly figure multiplied by nine
months. Regarding medical aid, the arbitrator determined that he would grant
the respondent one year's cover instead of the two years that he was claiming.
On school fees, he awarded an amount that he said was the 3rd term
fees for that year as well as an additional amount for which he gave no
explanation. Under the heading 'tobacco seed' the arbitrator calculated what
was due to the respondent on the basis of a percentage of the 2009 harvest. He
justified this on the ground that the then current season's tobacco had not
been sold yet. He used the same method for an award under the heading 'commission',
which he also based on a percentage of the 2009 harvest.
The amounts thus awarded totalled $35,434=.
It is apposite to state at this juncture that the
respondent accepted alternative employment with effect from May 2010. He was
thus out of employment for four months. His new monthly salary was $500= gross
without any benefits. His payslip was produced as proof thereof.
The appellant was aggrieved by the arbitrator's decision
and appealed to the Labour Court on the following grounds:-
1. The learned arbitrator erred in law in failing to
appreciate that the onus lay on the respondent to prove his claim. Hence the
respondent should have adduced evidence to substantiate figures he gave for the
sale of tobacco crop and tobacco seed respectively.
2. The learned arbitrator grossly misdirected himself in
awarding commissions on tobacco crop and tobacco seed based on the sales
figures of the 2009 crop.
3. The learned arbitrator erred in law in awarding medical
aid in the absence of proved medical expenses.
4. The learned arbitrator erred in law in failing to
appreciate that when assessing damages, consideration should be had to the fact
that the respondent was now working and accordingly his earnings and benefits
should have been taken into account in assessing the sum due.
5. The learned arbitrator erred in being satisfied that the
appellant had proved his damages on a balance of probability.
6. The learned arbitrator erred in finding that sufficient
evidence had been produced by the appellant to prove its claim.
7. The learned arbitrator misdirected himself in making an
award for the period he did.
The Labour Court dismissed the appeal and upheld the
arbitrator's quantification of damages payable to the respondent in the amount
of $35,434=. In its reasons, the Labour Court stated, inter alia, that the
arbitrator indicated in his award that evidence was led before he made the
determination of the appropriate amounts due and payable to the respondent. The
court a quo further indicated that it had no reason to doubt that evidence was
led in support of the claim and that such evidence formed the basis of the
learned arbitrator's award. It went on
to make the following remarks:-
“It was submitted, on behalf of the respondent, that while
the respondent may have secured alternative employment, such alternative
employment paid the respondent considerably less than what he used to get. It
is not disputed that where such a situation exists, the employee is entitled to
compensation of the difference (between the former earnings and the alternative
employment secured) in both salary and benefits in order for justice to be
done. I have satisfied myself that evidence was led in the earlier tribunal. It
follows that the necessary considerations were made before the award was made.”
The appellant has now appealed to this court against the
decision of the Labour Court on the following grounds:-
1. The court a quo erred in law by upholding an award of
damages for any period in excess of the period which respondent was actually
out of employment.
2. The court a quo erred in law in upholding (without
stating reasons for doing so) an award for payment in respect of a commission
that had not yet accrued.
3. The court a quo erred by upholding (without stating
reasons for doing so) an award for medical aid in the absence of any evidence
that the respondent had in fact incurred medical expenses.
4. The court a quo
erred in finding that the arbitrator received evidence as to:
(i) The time it would have taken the respondent to find
alternative employment: and
(ii) The disparity, if any, between the respondent's actual
earnings and his notional earnings from comparable employment.
(iii) The error was so gross as to amount to an error of
law.
5. The court a quo consequently erred in law by upholding
findings made by the arbitrator with no evidentiary basis.
It is not in dispute that the respondent was out of
employment for a period of four months after which he accepted a job with less
remuneration. The arbitrator however went on to award damages for a period of
nine months. A perusal of the record, including the arbitral award, does not
support the finding of the court a quo that
there was any evidence led to justify the computation done by the arbitrator.
The nine month period and the amounts granted under the various headings are
not based on any evidence that was placed before the arbitrator. No such
evidence is reflected on the record. No basis was laid for picking on the nine
month period and not any other period.
The onus was on the respondent to prove that he was owed
more than what the employer paid him. He did not discharge that onus.
Counsel for the respondent conceded as much before this
court.
This inescapable concession by counsel for the respondent
resolves this appeal. She rightly conceded that the court a quo seriously
misdirected itself by upholding awards that were made without any legal basis.
The arbitrator having had no basis to make them, the court a quo had no basis to confirm such awards on appeal; no evidence
having been placed before the court a quo to substantiate such quantification.
The lower court's decision is therefore founded on a
misdirection.
The case of Ambali v Bata Shoe Company Ltd 1999 (1) ZLR 417, that was cited by the
respondent, is of no avail to his case for it merely states that an employee
who has been wrongfully dismissed has an immediate duty to mitigate his loss.
It also places a limit on the period for which damages may be payable, to the
period between the date of dismissal and the date when new employment is found.
In casu, the respondent was out of employment for four
months. Thus, the quantification of damages ought to have been based on the
four month period. As already noted earlier, the nine month period used in the
computation of the amount granted in the arbitral award has no basis or
explanation and is completely arbitrary.
Despite making reference to Ambali v Bata Shoe Company Ltd 1999 (1) ZLR 417 and Zupco v Daison
2002 (2) ZLR 628, the court a quo failed to point to the evidence on which the
arbitrator's quantification was based. It appears to have acted on the premise
that the arbitrator must have received the necessary evidence. The court a quo itself
did not hear any evidence that would justify the quantification from the
respondent.
As counsel for the respondent rightly conceded, there is no
such evidence on the record.
In Zupco v Daison 2002 (2) ZLR 628, SANDURA JA stated:
“…, in its judgment, the Tribunal did not say why it chose
the period of forty-eight months as opposed to any other period. As stated in
Nyaguse v Mkwasine Estates (Pvt) Ltd 2000 (1) ZLR 571 (S) at 575D;
'If the tribunal is forced to make an estimate, it must use
the information to hand, and not simply pluck a figure from nowhere.'
In the circumstances, I am satisfied that the Tribunal's
decision can be categorised as wholly unreasonable…..,.”
Likewise, in casu,
the award of damages for a period in excess of four months was wholly
unreasonable.
This court was also referred to Duly Holdings Limited v
Clever Spanera 2005 (1) ZLR 407 (S); SC140-04 wherein CHIDYAUSIKU CJ referred
to Ambali v Bata Shoe Company Ltd 1999
(1) ZLR 417 and quoted McNALLY JA who stated at 419A:
“He (the employee) will be compensated only for the period
between his wrongful dismissal and the date when he could reasonably have been
expected to find alternative employment.”
And at 419D:
“But if an employee is wrongfully dismissed his duty to
mitigate his loss arises immediately. If he is offered a good job a day after
he is dismissed he must take it, or forfeit any claim for damages. If he is
offered a good job only after he has been unemployed for six months, he must
take it. If, in the meantime, he has instituted proceedings for reinstatement
he may continue these, but his claim for damages will usually then be limited
to his loss over the six month period.”
The learned CHIEF JUSTICE proceeded to state thereafter:
“…,. On the strength of Ambali's case, the respondent is entitled to damages calculated on the
basis of his income from the date of his dismissal to the date when he found
employment.”
The quantification done by the arbitrator, and upheld by
the Labour Court, in this matter is legally unsustainable. As the respondent
did not prove that he was entitled to more than what the appellant had paid
him, the Labour Court ought to have granted absolution from the instance.
For the above reasons, the appeal must succeed with costs.
The order of the Labour Court must therefore be set aside and substituted with an order of absolution from the
instance. Accordingly, it is ordered as follows:
1. The appeal be and is hereby allowed with costs.
2. The order of the Labour Court be and is hereby set aside
and substituted with the following:
“(1) The appeal be and is hereby allowed.
(2) The arbitral award dated 21 July 2010 be and is hereby
set aside and substituted with the following:
“The respondent be and is hereby absolved from
the instance.”
