MAKONI
JA: This
is an appeal against the whole judgment of the Labour Court upholding
the National Employment Council - Tobacco Grievance and Disciplinary
Committee's ('NEC GDC Committee') finding that the appellant
tacitly renewed the respondents' contracts of employment.
FACTUAL
BACKGROUND
The
following facts are common cause. The respondents were employed by
the appellant on two-year fixed contracts beginning 1
May
2011 to 30 April 2013.
After
the expiry of their contracts of employment, they continued to work
for the appellant for eleven months following which the appellant
offered them new contracts with the same terms as the expired ones.
The respondents signed the new contract which effectively regularised
their employment in retrospect for the period of 1 May 2013 to 30
April 2015.
Upon
expiry of the contracts, on 30 April 2015, the appellant retained the
respondents until 22 June 2015 on the same terms as the expired
contracts. It then offered them one-year fixed-term contracts. The
proposed contracts had a two-months probation clause and other less
favourable conditions.
The
respondents rejected the appellant's offer.
The
appellant terminated their contracts of employment by letter dated 7
July 2015 on the basis that the negotiations between the parties had
collapsed.
Aggrieved
by the termination of their employment, the respondents noted a
grievance of unfair dismissal with the appellant's Works Council.
The
Works Council upheld the decision by the appellant's Human
Resources department to offer the appellants one-year contracts after
the expiry of the two-year contracts. It reasoned that there was no
legal impediment to the appellant replacing the expired two-year
contracts with other contracts which had different terms and
conditions from the expired contracts.
The
Work's Council further found that the respondents suffered no
prejudice as they were paid for the period they worked whilst the
parties were negotiating.
Thereafter,
the respondents appealed to the NEC GDC Committee.
They
submitted that in instances where an employer allows an employee to
work after a fixed-term contract had expired, the contract is deemed
to have been tacitly relocated on the same terms and conditions.
Therefore, they submitted, there was no basis for the new contracts
as there had been tacit renewal. They also averred that the alleged
negotiations were inconsequential as they ensued after the tacit
renewal.
In
response, the appellant submitted that the NEC GDC Committee had no
power to interfere with the findings of facts made by the lower
tribunal unless the findings were outrageous in their defiance of
logic. The appellant contended that the two-month delay in notifying
the respondents of the new offer could not be inferred to mean there
was tacit renewal. It did not intend to renew the two-year contracts.
The
NEC GDC ruled in favour of the respondents.
It
held that tacit relocation could be safely presumed since the
appellant did not communicate its intention to change the terms of
the respondents' contracts before their termination and that the
respondents were engaged on the same terms and conditions as before.
It accordingly ordered the reinstatement of the respondents for the
unexpired period of their contracts without loss of pay and benefits
or payment of their salaries and benefits up to 30 April 2017.
Aggrieved
by this decision, the appellant appealed to the Labour Court (the
court a
quo)
on the ground that the NEC GDC grossly misdirected itself when it
made a finding that there was a tacit renewal of the respondents'
two-year employment contracts simply because the appellant allowed
the respondents to continue reporting for duty after the expiry of
their contracts.
It
argued that where there are clear indications that the other party
did not intend to be bound by the old contract, there could not be
tacit relocation of a contract that extended beyond the contractual
period.
The
appellant submitted that tacit relocation could not occur where the
parties are engaged in negotiations over a new agreement. It
contended that the respondents were allowed to work and were paid for
the period when their new contracts were being attended to.
To
the contrary, the respondents argued that there was tacit relocation
in that the appellant allowed them to continue working on the same
conditions from 1 May 2015 to 22 June 2015 notwithstanding that
their contracts expired on 30 April 2015.
They
also emphasized that the parties did not agree on a new arrangement.
The
respondents further indicated that the appellant had the option of
terminating their contracts of employment but allowed them to render
their services and subsequently introduced unfavourable conditions.
It was submitted that a finding against tacit relocation in the
circumstances of the case would be contrary to social justice and
fair labour standards of equity and fairness in the workplace.
DETERMINATION
OF THE COURT A
QUO
The
court dealt with the issue of whether or not the NEC GDC erred in
finding that the contracts of employment had been tacitly relocated.
In
doing so, it considered the employment status of the respondents at
the time their contracts were terminated. The court a
quo
found that there was no evidence to the effect that the new contracts
were as a result of any negotiation process as no negotiations were
done from 1 May to 22 June 2015.
It
reasoned that the old contracts were tacitly relocated in that the
appellant had allowed the respondents to continue working on the same
terms and conditions as before, and did not communicate any intention
to change the terms and conditions of the employment.
The
court a
quo
also had regard to the precedent that the appellant did not
immediately terminate or renew the respondent's contracts but
allowed them to continue working, for some period, on the same terms
and conditions of the expired contracts.
It
reasoned that had the appellant not wished to be bound by the old
expired contracts, it would have expressed that intention.
The
court accordingly concluded that the NEC GDC Committee's decision
did not constitute an outrageous defiance of logic since the facts
indicated that there was tacit relocation of the two year contracts.
Aggrieved
by that decision the appellant noted the present appeal on the
following grounds:
GROUNDS
OF APPEAL
“1.
Having accepted that the fixed term contracts between appellant and
each of the various respondents had come to an end and that new fixed
term contracts have been offered within two months of the expiry of
respondent's contracts, the court a
quo
erred in finding not withstanding those agreed facts, that the old
contracts had been relocated.
2.
The court a
quo
erred in not coming to the conclusion that the negotiation that took
place after the expiry of the contracts were such as negated any
finding that there was an extension of the contractual relationship
between the parties by the quasi
mutual assent.
3.
The court a
quo
erred in imposing upon appellant a contract it had not concluded to
prejudice the clear terms it had actually offered. (sic)
4.
Respondents having rejected the terms of the contract offered by
appellant, the court a
quo
erred in concluding that respondents had a contract to enforce.”
SUBMISSIONS
BEFORE THIS COURT
At
the hearing, Mr
Mpofu,
for the appellant submitted that the court
a
quo
asked itself the wrong question and ultimately gave itself the wrong
answer.
The
wrong question was whether it had been shown that there had been
negotiations between the parties from the 1 May 2015 to the 22 June
2015 and if not what the effect of the absence of negotiations,
during that period, would be.
The
court
a
quo's ratio
was that upon the expiry of the contract they only engaged in
negotiations after a period of six weeks. Because of that silence
there was tacit relocation of the contract.
He
contended that the real dispute between the parties was not that the
respondents' contracts had been relocated but that the respondents
were aggrieved by the terms of the new contracts.
Mr
Mpofu
submitted that the respondents admitted that there were negotiations
and that they did not refuse to sign the one-year contracts but were
looking forward to working under the old two-year contracts.
Mr
Mpofu further contended that a holistic analysis of the facts would
show that relocation of contracts in 2015 could not have been the
appellant's intention.
The
parties knew of the need for a written contract at all material times
as evidenced by the fact that in 2013 the respondents worked for
eleven months without contracts and later signed contracts backdated
to the period when they were without contracts.
The
parties haggled over the terms of the one year contracts as the
employees did not like the new terms of the contract. They did not
argue that the old contracts had relocated.
To
confirm the appellant's position some of the employees signed the
one year contracts.
He
concluded by saying that tacit relocation can not be inferred from
the facts of this matter.
On
being asked the date when the negotiations started he was unable to
pinpoint a date.
He
however submitted that even if there were no negotiations between 1
May and 20 June 2015 a tacit relocation could not be inferred when
the parties subsequently negotiated.
He
further submitted that the fact that parties were negotiating shows
that there was no intention on the part of the appellant to revert to
the old contract. He relied for that proposition on the case of
Justin
Kwangwari v Commercial Bank of Zimbabwe
HH79/03.
He
submitted that there is no period set in our law between the expiry
of a fixed term contract and the conclusion of a new one for it to be
held that there was tacit relocation. He urged that the court to
considers all the facts holistically in order to draw inferences
consistent with the proven facts.
On
being asked what would be the status of the employees in the 7 weeks,
before the offer, he submitted that the status was determined by the
new contract.
Mr
Mucheche,
for the respondents, submitted that the facts of the matter point to
tacit relocation. He indicated that the root of the dispute lies in
the determination of the respondents' employment status in the 7
week period.
Accordingly,
he referred to s12(1) of the Labour Act [Chapter
28:01]
(The Act), for the proposition that the legislature envisaged the
existence of 'deemed contracts' in respect of an employee who
works for an employer and is receiving
or entitled to
receive
any remuneration notwithstanding that such contract has not been
reduced to writing.
He
also referred s12(2) of the Act, which, so he argues, demands
mandatory compliance by the employer to inform the employee in
writing the period in terms of which they are engaged and s12(3)(a)
of the Act which provides that where a contract does not specify its
duration or date of termination, it is deemed to be one without
a limit of time.
As
such, he argued, the legislature sought to protect employees from
unscrupulous employers who have more bargaining power than the
employees.
He
emphasized that there was tacit relocation in that the respondents
reported for work and were remunerated under the old contracts.
He
further indicated that the respondents' concerns did not only
relate to their disgruntlement with the new offer but also spoke to
the issue of tacit relocation.
He
further submitted that the appellant's offer of new contracts of
employment was immaterial to the concept of tacit relocation.
Additionally,
he stated that the one-year contracts offered by the appellant were
unjust, unfair and violated the respondents' right to fair and safe
labour practices and standards provided for in s65 of the
Constitution of Zimbabwe, 2013.
In
rebuttal Mr Mpofu
submitted
that there can be a delay after the expiry of the contract and the
delay does not amount to relocation.
It
would be wrong to say once there is a delay then s12 of the Act is
the answer.
He
submitted that s12 uses “shall” in a directory sense and not in a
peremptory manner. Failure to comply with it does not render conduct
void.
He
concluded by saying that s12 of the Act is what the employer was
complying with in the 7 weeks.
ISSUE
FOR DETERMINATION
From
a consideration of the grounds of appeal raised and the submissions
made, one issue falls for determination which is:
Whether
or not the court a
quo
erred in finding that the contracts of employment in question had
been tacitly relocated.
A
reading of the record reflects that the ratio
of the court a
quo's
ruling was that the respondents' continued rendering of services
from 1
May 2015 to 22 June 2015
in terms of the expired contracts constituted tacit relocation of the
contracts by the appellant.
That
tacit relocation was at the centre of the parties' dispute is also
evidenced in the way the matter progressed before the various fora.
This will be shown by a perusal of the minutes of the appeal hearing
of 26 October 2015 before the Work's Council to the respondents'
appeal before the NEC GDC Committee and the subsequent proceedings in
the court a
quo.
THE
LAW
It
is settled law that a fixed-term contract of employment automatically
expires at the end of the specified period unless the parties thereto
mutually agree to its termination. (See ZIMRA
v Mudzimuwaona
SC4/18).
However,
in certain instances, despite the expiry of the period of employment,
the employer-employee relationship may be found to exist owing to the
parties' conduct under the concept of tacit relocation.
Tacit
relocation, as it applies to contracts of employment, entails that
where an employee's fixed-term contract expires without renewal and
the employee continues to render his services to the employer with
the employer paying the previously agreed remuneration, the expired
contract is deemed to be relocated. Therefore, the employee is deemed
to be employed on the same terms and conditions as the previous
contract.
In
Gumbo
v Air Zimbabwe (Pvt) Ltd
2000
(2) ZLR 126 at 130 A-D
the court made the following pertinent remarks regarding the
principle of tacit relocation;
“Finally,
the best that can be said for the applicant is that in certain cases
akin to the present there is a presumption that when
the parties continue the employer-employee relationship beyond the
contractual period without agreeing new terms there is a tacit
relocation of the expired contract on the same terms and for the same
duration.
In other words, all things being equal, it could be said that on 1
October 1999, the applicant commenced a new probationary period.
However, this presumption does not operate when it is clear that one
of the parties has no intention of continuing on the terms of the
expired contract. See Lilford
v Black
1943 SR 46 at 47, where BLAKEWAY J said:
'The
renewal of a lease or of a contract for services to be performed can
take place either by express agreement or tacitly. If, after the
expiration of the period provided for the duration of the contract,
the parties continue their relationship without any fresh agreement
the law presumes, in the absence of indications to the contrary, that
they have agreed to enter upon a new lease on the same terms as the
expired lease. But this presumption does not operate when it is clear
that the parties or one of them does not intend to carry on with the
contract on the old terms.”' (Emphasis added)
John
Grogan in his book “Workplace
Law”
8th
ed at pages 41-42 states the following:
“If
after the agreed date for the termination of the contract the
employee remains in service and the employer continues to pay the
agreed remuneration, the contract is deemed to have been tacitly
renewed, provided that an intention to renew is consistent with the
parties' conduct. The
relocated contract will continue on exactly the same terms and
conditions as the previous fixed-term contract,
except that the duration of the contract need not be the same as that
of the original contract; the life of the relocated contract must be
determined in light of the particular circumstances of each case.”
(emphasis added)
In
Golden
Fried Chicken (Pty) Ltd v Sirad Fast Foods CC & Ors
2002
(1) SA 822 (SCA) at 825 D-F the court held:
“After
the termination of the initial agreement and prior to this letter the
parties (in the light of the facts recited) conducted themselves in a
manner that gave rise to the inescapable inference that both desired
the revival of their former contractual relationship on the same
terms as existed before.
Taken together, those facts establish a tacit relocation of a
franchise agreement (comparable to a tacit relocation of a lease)
between the appellant and Sirad
(Shell South Africa (Pty) Ltd v Bezuidenhout and Others
1978 (3) SA 981 (N) 984B-E).
A
tacit relocation of an agreement is a new agreement and not a
continuation of the old agreement
(Fiat
S A v Kolbe Motors
1975 (2) SA 129 (O) 139D-E; Shell 985B-C).
The
fact that the appellant had forgotten that the agreement had lapsed
is beside the point because in
determining whether a tacit contract was concluded a court has regard
to the external manifestations and not the subjective workings of
minds
(Fiat S A 138H-139D).” (emphasis added)
The
principle that can be drawn from the cited authorities is that an
inference of tacit relocation is dependent upon the continued
existence of an employer-employee relationship after the expiration
of the contract. The employee will continue rendering his services to
the employer who in turn pays remuneration in terms of the expired
contract.
Tacit
relocation
is based on the intention of the parties which must be consistent
with their conduct. The court, in determining such an issue,
considers all the facts holistically as it draws inferences which are
consistent with the proved facts.
The
principle of tacit relocation of contracts of employment appears to
be embodied in statute, in particular s12 of the Labour Court Act
[Chapter
28:01]
which provides:
“12
Duration, particulars and termination of employment contract
(1)
Every person who is employed by or working for any other person and
receiving or entitled to receive any remuneration in respect of such
employment or work shall be deemed to be under a contract of
employment with that other person, whether such contract is reduced
to writing or not.
(2)
An employer shall, upon engagement of an employee, inform the
employee in writing of the following particulars —
(a)
the name and address of the employer;
(b)
the period of time, if limited, for which the employee is engaged;
(c)
the terms of probation, if any;
(d)
the terms of any employment code;
(e)
particulars of the employee's remuneration, its manner of
calculation and the intervals at which it will be paid;
(f)
particulars of the benefits receivable in the event of sickness or
pregnancy;
(g)
hours of work;
(h)
particulars of any bonus or incentive production scheme;
(i)
particulars of vacation leave and vacation pay;
(j)
particulars of any other benefits provided under the contract of
employment.
(3)
A contract of employment that does not specify its duration or date
of termination, other than a contract for casual work or seasonal
work or for the performance of some specific service, shall be deemed
to be a contract without limit of time:
Provided
that a casual worker shall be deemed to have become an employee on a
contract of employment without limit of time on the day that his
period of engagement with a particular employer exceeds a total of
six weeks in any four consecutive months.
(3a)
A contract of employment that specifies its duration or date of
termination, including a contract for casual work or seasonal work or
for the performance of some specific service, shall, despite such
specification, be deemed to be a contract of employment without
limitation of time upon the expiry of such period of continuous
service as is —
(a)
fixed by the appropriate employment council; or
(b)
prescribed by the Minister, if there is no employment council for the
undertaking concerned, or where the employment council fixes no such
period; and thereupon the employee concerned shall be afforded the
same benefits as are in this Act or any collective bargaining
agreement provided for those employees who are engaged without limit
of time.”
Section
12(2) has been interpreted to merely impose an obligation on the
employer to supply the information and does not require the parties
to sign a written contract. See Rumbles
v Kwa Bat Marketing (Pty) Ltd
(2003) 8 BLLR 811 LC. The statement of particulars is not the
contract itself nor is it even conclusive evidence of the contract.
See L. Madhuku, Labour
Law in Zimbabwe,
2015 at p 31.
However,
a proper construction of s12(1) yields the result that where an
employee renders services in return for remuneration, a contract of
employment exists notwithstanding that such a contract has not been
reduced to writing.
Tacit
relocation is therefore presumed.
This
is made clearer by the provisions of s12(3a) which states that a
fixed term contract shall be deemed to be a contract without limit of
time upon the
expiry of such period of continuous service.
APPLICATION
OF THE LAW TO THE FACTS
A
determination of whether
a written contract was automatically renewed in accordance with the
principle of tacit relocation is a question of fact which has to be
answered after an analysis of the particular facts and circumstances
of each case. (See Sun
International (South Africa) Ltd v Crocodile Enterprises
[2014]
ZANWHC 52).
In
casu,
it is not in dispute that the parties' relationship was governed by
a written contract of employment which terminated by effluxion of
time on 30
April
2015. As at that date, the respondents would have ceased to be the
appellant's employees.
However,
the appellant allowed the respondents to continue working on the old
terms and conditions of their contracts until 22 June 2015 when it
then offered
the respondents one-year contracts with less favourable conditions.
It
can be reasonably inferred from this conduct of the parties that a
new contract had come into existence by the principle of tacit
relocation.
Applying
the dicta
in Golden
Fried Chicken
case,
supra,
that tacit relocation of an agreement is a new agreement and not a
continuation of the old agreement, it follows that
a
new agreement between the parties came into effect on 1 May 2015
owing to the appellant's
conduct of retaining the respondents in its employ on
the same terms and conditions of the expired contracts.
Such
a finding would have resolved the matter; however, a secondary issue
arises from the parties' submissions.
The
issue for consideration is the
effect of the alleged negotiations, if any, on the relocated
contract.
This
is necessitated by the appellant's position that the existence of
negotiations regarding a new contract negates any finding to the
effect that the old contracts were relocated. It is the appellant's
position that the engagements between the parties after the
expiration of the contract are a clear indication that it had no
intention of continuing on the old terms.
It
relied on communication by the appellant's Human Resources Manager
dated 7 July 2015 informing the respondents that the negotiations had
collapsed, thus a new contract would not materialize and the Work's
Council determination to that effect.
Per
contra,
the respondents aver that negotiations regarding the new offer made
by the appellant did not have any legal effect on tacit relocation as
a new contract had already materialised.
In
their written submissions, they aver that the purported negotiations
were induced by duress as the appellant's Human Resources'
Manager threatened to dismiss them if they did not abandon the claim
for tacit relocation and dispense with
the services of their legal practitioners.
As
such, they submitted that the 'alleged collapse of negotiations' in
the circumstances, could not be a basis for the termination of
employment.
Since
tacit relocation is inferred from the presumed intention of the
parties to the contract and their conduct, where it is established
that both parties accepted that the old contract had terminated and
engaged in negotiations regarding a new contract, tacit relocation
will be negated. This is for the reason that neither of the parties
would have conducted themselves in a manner that gave rise to the
inescapable inference that both desired the revival of their former
contractual relationship on the same terms as existed before.
In
this regard, the court a
quo
made a factual finding that there was no evidence to the effect that
there were any negotiations between the parties from 1 May 2015.
It
further found that although the appellant may have intended to
terminate the contracts, it failed to communicate that intention.
It
also took into account the manner in which the parties dealt with the
same issue in the past. When the initial two year contracts expired
the employer did not immediately renew the contracts. It merely
allowed the employees to continue rendering services on the same
terms and conditions of the expired contracts.
It
only regularised the contracts after 11 months.
It
is settled law that an appellate court may only interfere with the
decision reached by a lower court based on factual findings where
gross misdirection has been established. [See Hama
v National Railways of Zimbabwe
1996 (1) ZLR 664 (S)].
The
appellant has not alleged such a gross misdirection which
necessitates this court's interference.
More
importantly, there is nothing on record to show that the parties
engaged in negotiations during the period 1 May 2015 to 22 June 2015
when they were without contracts.
There
is no evidence that during this period the appellant communicated to
the respondents its intention as to whether or not the two-year
contracts would be renewed or terminated.
The
first meeting on record occurred in the appellant's board room on
29 June 2015, notably after the period upon which the respondents
base their claim for tacit relocation. This is followed by the
appellant's letter of 7 July 2015 indicating the collapse of the
alleged negotiations.
Given
this, the court a
quo's
finding cannot be assailed.
Its
decision was based on a correct application of the principle of tacit
relocation as enunciated in the Gumbo
case, supra.
The
fact of the matter is that for the two-month period, that is 1 May
2015 to 22 June 2015, the conduct of the parties reflects that they
intended to be bound by the expired contracts.
Those
contracts were therefore tacitly relocated and were to expire after
two years, just like the expired contracts.
In
the circumstances of this case, a mere attempt to negotiate a new
contract does not operate to vary an existing binding contract. The
appellant's new offer thus amounted to an attempt to unilaterally
vary the respondents' relocated contracts.
This
is a classical case of the application of subsections 12(1) and (3a)
of the Labour Act which seek to protect employees by estopping an
employer from alleging the non-existence of a contract of employment
where there has been continued service in terms of an expired
contract. Mr Mpofu
argued that it would be wrong to invoke s12 everytime there is a
delay in renegotiating an expired contract. He contended that s12
uses “shall” in a directory sense and not in peremptory terms.
It
is the generally accepted rule of interpretation that the use of the
word “shall” as opposed to “may” is indicative of a
peremptory intent on the part of the legislature.
Failure
to comply with the mandatory dictates of law renders the act done a
nullity.
However,
where the legislature has not explicitly provided that non-compliance
is fatal, there is a presumption that the legislature left it to the
courts to determine the consequences of non-compliance.
In
Shumba
& Anor v The Zimbabwe Electoral Commission & Anor
SC11/08 at p21
the
court had occasion to deal with the issue of interpreting a Statute
that does not prescribe the consequences of non-compliance with a
statutory provision.
In
interpreting the provisions of the Zimbabwe Electoral Commission Act,
CHIDYAUSIKU CJ remarked as follows at pp.21-23 of the cyclostyled
judgment:
"It
is the generally accepted rule of interpretation that the use of
peremptory words such as 'shall' as opposed to 'may' is indicative of
the legislature's intention to make the provision peremptory.
The
use of the word 'may' as opposed to 'shall' is construed as
indicative of the legislature's intention to make a provision
directory.
In
some instances the legislature explicitly provides that failure to
comply with a statutory provision is fatal. In other instances, the
legislature specifically provides that failure to comply is not
fatal.
In
both of the above instances no difficulty arises.
The
difficulty usually arises where the legislature has made no specific
indication as to whether failure to comply is fatal or not.
In
the present case, the consequences of failure to comply with the
provisions of s18 of the Zimbabwe Electoral Commission Act are not
explicitly spelt out. In
those statutory provisions where the legislature has not specifically
provided for the consequences of failure to comply, it has to be
assumed that the legislature has left it to the Courts to determine
what the consequences of failure to comply should be.
The
learned author Francis Bennion in his work Statutory
Interpretation
suggests that the courts have to determine the intention of the
legislature using certain principles of interpretation as guidelines.
He had this to say at pp21-22:
'Where
a duty arises under a statute, the court, charged with the task of
enforcing the statute, needs to decide what consequence Parliament
intended should follow from breach of the duty.'
In
Sutter
v Scheepers
the court gave guidelines on how the real intention of legislature
can be arrived at. These were summarised in Pio
v Franklin NO and Another
1949 (3) SA 442 (C) as follows:
“(1)
The word shall when used in a statute is rather to be considered as
peremptory, unless there are other circumstances which negative this
construction.
(2)
If a provision is couched in a negative form, it is to be regarded as
a peremptory rather than a directory mandate.
(3)
If a provision is couched in positive language and there is no
sanction added in case the requisites are not carried out, then the
presumption is in favour of an intention to make the provision only
directory.
(4)
If when we consider the scope and objects of a provision, we find
that its terms would, if strictly carried out, lead to injustice and
even fraud, and if there is no explicit statement that the act is to
be void if the conditions are not complied with, or if no sanction is
added, then the presumption is rather in favour of the provision
being directory.
(5)
The history of the legislation also will afford a clue in some
cases.”
The
principle which comes out of the guidelines is that where strict
adherence to the wording of a statute leads to an injustice or even
fraud, in instances where no penalty is prescribed, it may be
desirable to lean in favour of making the provision directory.
From
the cited authorities, it is the general position that the use of the
word 'shall' in a statutory provision requires mandatory
compliance.
Where
the penalty for infraction of the provision is not explicitly stated,
it is for the courts to determine what the consequences of failure to
comply should be. In doing so, the court must interrogate the purpose
of the relevant statute and pronounce a penalty which is
proportionate to the mischief the legislature sought to remedy.
It
is my considered view that both provisions are peremptory owing to
the specific use of the word “shall” which has mandatory
connotations.
Section
12(1) provides:
“12
Duration, particulars and termination of employment contract
(1)
Every person who is employed by or working for any other person and
receiving or entitled to receive any remuneration in respect of such
employment or work shall be deemed to be under a contract of
employment with that other person, whether such contract is reduced
to writing or not.”
It
is accepted that there is no explicit obligation on an employer under
this provision to reduce a contract into writing. However, that fact
alone does not render the provision directory.
The
use of the word “shall” after a description of a factual set of
facts in an employment set up followed by the pronouncement of a
specific outcome is indicative of the fact that the legislature
intended the provision to be peremptory.
In
enacting s12(1), it appears that the legislature envisaged a
situation where services are rendered in return for remuneration but
the recipient of the services later disputes the existence of a
contract of employment.
The
peremptory nature of s12(1) is not dependent on whether or not a
particular act is done which in this case would be a mandate on the
employer to reduce a contract into writing. The peremptory nature of
the provision lies in the deemed existence of a contract of
employment which follows the rendering of services and remuneration
for such services.
Once
it is established that services have been rendered and there is a
correlative entitlement to remuneration or actual remuneration, a
contract is deemed to be in existence.
It
is prima
facie proof of
employment.
A
similar interpretation can be ascribed to s12(3). The peremptory
nature of the provision stems from the fact that a contract is deemed
to be without limit of time where no specific details of its duration
are provided.
The
same applies to a casual worker who continues rendering services
notwithstanding the expiry of the specific period for which he was
engaged.
Therefore
the onus to disprove the continued existence of the contract rests on
the party disputing its existence.
It
is my considered view that the legislature must have been cognisant
of the fact that employees are vulnerable under some unscrupulous
employers, hence the use of such peremptory provisions in s12 of the
Act.
Having
said the above, the circumstances of this case fall into the ambit
of the sentiments of the court in Melamed
and Hurwitz v Vorner Investments (Pty) Ltd 1984
(3) SA 155 (A)
at 165B-C: that:
“…a
court may hold that a tacit contract has been established where, by a
process of inference, it concludes that the most plausible probable
conclusion from all the relevant proved facts and circumstances is
that a contract came into existence …”
Applying
this approach to the matter at hand, an inference of tacit
relocation was justified on the facts of this case.
The
court a
quo's
finding that that respondents' contracts were tacitly renewed from
1 May 2015 is unassalable. Therefore, the appellant's termination
of the respondent's contracts of employment in the circumstances
was grossly irregular.
An
employer clearly cannot terminate a contract that has expired even
though it has been tactly renewed.
The
appeal therefore lacks merit and ought to be dismissed. Costs will
follow the cause.
It
is accordingly ordered as follows:
“The
appeal is dismissed with costs.”
MAVANGIRA
JA:
I
agree
CHATUKUTA
AJA: I
agree
Gill,
Godlonton & Gerrans,
appellant's legal practitioners
Caleb
Mucheche & Partners,
respondent's legal practitioners
1.
1932 AD 165 at pp. 173, 174
