This
is an appeal against a judgment of the Labour Court dated 27
September 2013.
After
hearing argument, we made an order allowing the appeal, in part, and
indicated that the reasons thereof would be availed in due course.
The reasons for that decision are set out below:
BACKGROUND
FACTS
The
appellant engaged the respondent as a Finance and Administration
Manager. The contract was subject to a three months' probationary
period. The period of probation was effective from 28 February 2012
and was to end in May 2012.
On
31 May 2012, the respondent was advised that his position was not
going to be confirmed as his evaluation had not been satisfactory.
The appellant, however, decided to extend the probation period by one
month. This was in an attempt to allow the respondent to remedy the
inconsistencies which had been noted by the appellant during his
evaluation which had taken place at the beginning of May 2012. The
respondent refused to accept an extension of the period of probation,
arguing that he had successfully completed the accounts for 2011 and
that he had subsequently been issued with a company car. It was his
argument that the issuance of the company car confirmed that he was
now a permanent employee. In spite of his protestations, the
respondent continued to work for the duration of the extension.
On
21 July 2012, the appellant wrote to the respondent advising him,
again, that his probationary period had not been successful and gave
him two weeks' notice to terminate his services.
The
respondent declined to accept the two-week period of notice and
argued that the termination amounted to an unfair dismissal. He
argued that as a “permanent employee” he was entitled to three
months' notice of the termination of his employment.
As
the parties were unable to resolve the dispute, it was referred to an
Arbitrator who found that the extension of the probationary period
was unlawful. The arbitrator made an award, on 31 January 2013, in
the following terms:
1.
Back-pay of salary and benefits from 1 July 2012 to the date of the
award;
2.
The value of six months' basic salary for compensation for unlawful
termination of the employment contract.
3.
Three months' salary as notice pay which would incorporate cash in
lieu
of leave days; pension contributions; compensation for loss of the
company vehicle; and 100 litres of fuel per month for the period from
July 2012 until the date of the award.
The
appellant was dissatisfied with the award and approached the court
a
quo
seeking
the setting aside of that determination and the confirmation of the
termination of the respondent's employment.
The
appeal was opposed by the respondent.
The
court a
quo
upheld the Arbitrator's award and dismissed the appeal. The
appellant noted an appeal against the decision of the court a
quo
on four grounds, namely:-
“1.
The court a
quo
erred, on a point of law, by holding that section 12(5) of the Labour
Act does not confer a discretion to the employer (sic)
to
extend an employee's probationary period, and, further that
according to Labour Act, a probation period cannot be extended.
2.
The court a
quo
erred, on a point of law, by holding that by extending the
probationary period, the employer had made the employees position
permanent by operation of the law. The extension of probation does
not amount to an election to permanently employ an employee on
probation, where such extension has been explicitly communicated.
3.
The court a
quo
misdirected itself by completely ignoring that the parties'
employment relationship was governed by a contract of employment and
that according to that contract of employment confirmation into a
substantive position was to be done in writing and subject to a
successful medical examination.
4.
The court a
quo
erred, on a point of law, by holding that the respondent was entitled
to three (3) months' notice, when he was, in fact, not a permanent
employee.”
ISSUES
BEFORE THE COURT
It
seems to me that three issues present themselves for determination.
These are:-
1.
The purpose of a period of probation.
2.
Whether section 12(5) of the Labour Act permits an extension of a
period of probation.
3.
The status of an employee who continues to work after the
probationary period has elapsed.
I
propose to deal with each of the issues in turn.
(1)
The purpose of a period of probation
The
main reason for having a period of probation is now generally
accepted. A probationary period is designed to function as a time
when an employer can evaluate a 'potential' employee before
opting to accept him or her as a full time employee. During this
period, the employee is assessed and evaluated to determine his
suitability for permanent employment. PROFESSOR LOVEMORE MADHUKU, in
his book, “Labour
Law in Zimbabwe”…,
states as follows with regards to the purpose of probation:
“A
probationary employee is one who is in the initial period of his or
her employment where his skill and abilities are being assessed. The
probationary employment contract is separate from the second
employment contract
which is conditional on successfully completing the probation…,.”
CHINHENGO
J, in Madawo
v Interfresh Limited
2000 (1) ZLR 660…., remarked as follows:
“Probation
is defined, in the New English Dictionary, as:
'The
action or process of testing or putting to the proof…,; the testing
or trial of a person's conduct, character or moral qualification; a
proceeding designed to ascertain these…, for some position or
office.'
I
think these words very well describe the process of probation as
commonly undergone by accepted candidates…,.”
Probation
was expressed by NDOU J, in the case of Commercial
Bank of Zimbabwe v Kwangwari
HH79-03 as follows:
“Probationary
clauses provide for a trial period during which the reciprocal
periods of notice required for termination are shorter, and which
purportedly give both parties the right either to confirm or not to
confirm the contract at the conclusion of the probationary period.”
It
is apparent from the above that:
(i)
Firstly, the employee must successfully complete the period of
probation before he can be permanently employed;
(ii)
Secondly, that the probationary period is a separate and distinct
contract;
(iii)
Thirdly, the contract of permanent employment only comes into
operation once an employee has successfully completed the period of
probation; and
(iv)
Finally, it is reciprocal in nature. In other words, if an employee
is dissatisfied with the employer he may also terminate the
employment by giving the requisite notice.
(2)
Whether the Labour Act permits an extension of a period of probation
Section
12(5) of the Labour Act [Chapter
9:16]
regulates issues of probation in the workplace. The section reads as
follows:
“A
contract of employment may provide, in writing, for a single,
non-renewable probationary period…,.”
This
provision is clear and requires no interpretation. It seems to me
that the provision provides that where an employer decides to include
a probationary period in the contract of employment then that period
is not renewable.
The
court a
quo,
in my view, correctly found that the use of the word “may” in the
above section relates to the employer's discretion to engage an
employee either on probation or immediately into a substantive
position. Once a probationary period is given by an employer then it
can only be a “single, non-renewable” period. In this regard
PROFESSOR MADHUKU states:
“This
means that at the end of a probationary period the employer has two
choices: either allow the probationary contract to lapse and let the
employee go, or enter into a second employment contract with the
employee. There
is no room for renewal of the probationary contract.”
This
position was also set out in the case of Kazembe
v the Adult Literacy Organisation
SC173-94,
where the court stated that once a probation period ends, and the
employer is dissatisfied with the probationer's performance, all
that the employer needs to do is to inform him that his services are
no longer required and that would be the end of the matter.
There
are two ways in which an unsuccessful probationary employee can be
dismissed. The first is to allow the probation period to expire
naturally wherein the employee is released at the end of that period.
The second is to release the probationary employee before the end of
the probation period. Where the probationary period is cut short then
the issue of notice arises and he must be given notice in terms of
the contract. See
Time
Bank of Zimbabwe v Nkosana Moyo
HH26-02.
I
do not accept counsel for the appellant's submission that the
appellant could extend the probationary period.
The
appellant relied on the position in
Commercial
Bank of Zimbabwe v Kwangwari
HH79-03
where
the court allowed the employer the discretion to extend a
probationary period without the employee assuming substantive
appointment to a permanent position. It is apparent that at the time
that NDOU J dealt with the Commercial
Bank of Zimbabwe v Kwangwari
HH79-03 case, section 12(5) of the Labour Act had not come into
operation. This case came before the High Court in 2002. Section
12(5) of the Labour Act was only enacted by Amendment 17/2002 which
was published and came into operation on 7 March 2003.
In
view of the above, it is therefore apparent that the appellant
committed two errors. It erred in extending the period of probation.
It also erred in dismissing the respondent on two weeks' notice
which was not provided for in the contract of employment.
(3)
What was the respondent's employment status at the time of
termination of the contract?
It
seems to me that the appellant, having failed to dismiss the
respondent during the period of probation, the question that arises
is the status of the respondent after the three months probationary
period.
Applying
section 12(5) of the Labour Act, it is apparent that the respondent
was no longer on probation as the contract stipulated a three month
period of probation.
Clearly,
therefore, in these circumstances, the court a
quo
was correct in finding that the respondent had become a permanent
employee.
However
I am not satisfied that the respondent was entitled to the total
award made by the Arbitrator. As the respondent was now a permanent
employee, the consequence of his dismissal, which the Arbitrator
found to be unlawful, should have been reinstatement. The remedy was
not to dismiss him on three months' notice.
It
was on the basis of the above that the appeal was allowed, in part,
and the following order made:
1.
The appeal against the judgment of the Labour Court be and is hereby
allowed, in part, with each party paying its own costs.
2.
The judgment of the court a
quo
is amended to read as follows:-
(a)
The appeal is allowed, in part, with each party paying its own costs.
(b)
The award of the arbitrator, in respect of the monetary award, is set
aside.
(c)
The award is amended to read as follows:
“(i)
The termination of the employment of the claimant is unlawful and is
set aside.
(ii)
The respondent is ordered to reinstate the claimant into his former
position without loss of salary and benefits.
(iii)
In the event that reinstatement is no longer possible, the respondent
is to pay damages to the claimant as agreed upon between the parties,
or, that failing, as determined before me upon application.
(iv)
Each party pays its own costs.”
