GOWORA
JA:
This
was an appeal against the whole judgment of the Labour Court
delivered on 17 May 2012. After perusing the record and hearing the
submissions of the parties, this Court allowed the appeal and
indicated that the reasons would be availed in due course.
The
following are the reasons for the order.
The
facts arising in this matter are that in 2002, the respondent was
employed by the appellant as a Revenue Trainee on a fixed term
contract of three years. It specifically stated the following:
“upon
successful completion of the probation period the employment contract
shall run for a further period of 24 (twenty-four) months after which
the authority, may at its sole discretion offer you permanent
employment on such terms and conditions as determined by it at the
time.”
The
literal meaning of that clause is that the respondent's contract
was subject, first to the successful completion of the probation
period and then would terminate at the end of 36 month.
In
2005, the respondent was based at the Beitbridge Border post and was
charged with failing to uphold ethical and professional standards of
behaviour within the workplace as well as carrying out an act
inconsistent with the express or implied conditions of the contract
of employment.
He
was arraigned before a disciplinary committee and was found guilty of
both charges. He was as a consequence dismissed from employment.
He
appealed to the appeals committee without success.
The
respondent appealed against that decision to the Labour Court which
upheld the appeal and held that the he had been unlawfully dismissed.
The court a
quo
ordered the appellant to reinstate the respondent without loss of
salary or benefits and, in the event that reinstatement was no longer
tenable, to pay damages in lieu
of reinstatement.
This
decision was not appealed against.
Instead,
the parties decided to negotiate the quantum
of damages but failed to agree resulting in the respondent applying
to the Labour Court for quantification.
He
claimed that when he was dismissed he had not completed his training
period but it was common cause that he was going to continue with his
job after training and thus he was entitled to compensation as if he
was a permanent employee.
The
appellant opposed the quantification on the basis that the respondent
was employed on a fixed term contract and he had failed his
examinations and thus the contractual relationship would have ended
at the expiry of the 36 months provided in the contract.
The
Labour Court ruled in favour of the respondent and ordered the
appellant to pay:
(a)
US$19,740.16 as back-pay and benefits.
(b)
Twelve (12) months' salary that the respondent would have earned in
August 2011 minus US$150.00 earned by the respondent per month for a
period of twelve months.
The
appellant was aggrieved by the decision and with the leave of this
court has appealed the order of the court a
quo.
It
is criticized for the following reasons:
(i)
failing to put due weight to the fact that the respondent was
employed as a Revenue Trainee on a fixed term contract of 36 (thirty
six) months.
(ii)
failing to give proper weight to the fact that when the respondent
was dismissed he was left with a period of 6 (six) months before
expiration of the contract.
(iii)
failing to give proper weight to Clause 1.3 of the Zimbabwe Revenue
Authority offer of employment which provides that permanent
employment could only be offered at the sole discretion of the
appellant.
(iv)
failing to give proper weight to the submission that even if the
respondent had not been dismissed, he would not have been offered
permanent employment as he had failed two (2) core courses in
November 2004 and supplementary exams in 2005.
(v)
failing to distinguish between a permanent employee and an employee
on a fixed term contract in its quantification of damages, especially
after finding that the respondent did not have a legitimate
expectation to be offered permanent employment.
(vi)
in finding that the respondent's entitlement to damages accrued up
to the date of the court's judgment.
(vii)
in failing to deduct the US$150.00 earned by the respondent per month
for a period of twelve (12) months from the total amount awarded as
back pay and benefits.
(viii)
in failing to appreciate that the respondent could have easily
obtained alternative employment within a period of six (6) months.
(ix)
in rejecting the evidence of the appellant's expert witness on the
factual issues and accepting that of the respondent and his witness
on unclear grounds.
The
respondent raised three preliminary objections to the appeal. The
objections were respectively that;
(i)
the notice of appeal did not state the correct date of judgment;
(ii)
the grounds of appeal were not clear and concise; and lastly
(iii)
that the grounds of appeal did not raise questions of law.
The
respondent abandoned the first objection after conceding that the
notice of appeal in point of fact reflected the correct date of
judgment.
The
other two points were dismissed by the court.
Quite
apart from the fact that in mounting the objections, the respondent
sought to rely on the Supreme Court Rules, 1964 which are not
applicable to appeals from the Labour Court, in attacking the grounds
of appeal, the point that the grounds of appeal were not clear and
concise had no merit.
The
respondent was unable to show to this court in what way the grounds
of appeal were not clear and concise. The grounds set out by the
appellant may have been inelegantly drafted but they articulate the
basis upon which the appeal is founded.
Regarding
the point taken that the grounds of appeal were not on a question of
law, the court was of the view that the point was improperly taken.
The
issue of what is a question of law has been addressed in a plethora
of cases. See for example, Muzuva
v United Bottlers (Pvt) Ltd
1994
(1) ZLR 217 (S) and
Hama
v National Railways of Zimbabwe
1996
(1) ZLR 664 (S).
The
respondent submitted that the appellant should have expressly stated
in its grounds of appeal that the factual findings of the court a
quo
are gross as to amount to a question of law.
In
Reserve
Bank of Zimbabwe v Granger and Anor SC34/01,
MUCHECHETERE JA (as he then was), at page 5 to 6 of the cyclostyled
judgment, said:
“An
appeal to this Court is based on the record. If it is to be related
to the facts there must be an allegation that there has been a
misdirection on the facts which is so unreasonable that no sensible
person who applied his mind to the facts would have arrived at such a
decision. And a misdirection of facts is either a failure to
appreciate a fact at all or a finding of fact that is contrary to the
evidence actually presented.”
These
remarks were qualified by GARWE JA in Zvokusekwa
v Biita Rural District Council
SC-44-15 as follows:
“In
my view, the remarks made in Granger's case (supra) need to be
qualified, to the extent that they may be interpreted as saying that,
to constitute a point of law, in all cases where findings of fact are
attacked, there must be an allegation that there was a misdirection
on the facts which was so unreasonable that no sensible person
properly applying his mind would have arrived at such a decision. One
must, I think, be guided by the substance of the grounds of appeal
and not the form. Legal practitioners often exhibit different styles
in formulating such grounds. What is important at the end of the day
is that the grounds must disclose the basis upon which the decision
of the lower court is impugned in a clear and concise manner.”
The
essential principle outlined above is that regard must be had to the
substance of a ground of appeal as opposed to its form in order to
determine whether it raises a question of law.
The
court was of the view that the grounds of appeal raised by the
appellant in essence attacked the alleged failure by the court a
quo
to consider relevant facts which failure led to an error at law.
The
grounds complied with the requirements of s92F of the Labour Act
[Chapter
28:01]
and therefore the point in
limine
was dismissed.
On
the merits the issues which are pertinent in the determination of the
appeal are the following:
(a)
Whether or not the court a
quo
correctly applied the principles on fixed term contracts;
(b)
Whether or not the respondent had a legitimate expectation of being
offered employment on a permanent basis;
(c)
Whether or not the court drew a distinction between a permanent
employee and one on a fixed term contract in its quantification of
damages; and
(d)
Whether or not the court grossly misdirected itself in respect of the
factual findings it arrived at on the evidence presented.
It
was the appellant's contention that the court a
quo
erred in law by quantifying damages as if the respondent was a
permanent employee prior to his dismissal, yet it is clear from the
contract of employment that he was on a fixed term contract.
One
of the first categoric statements on the assessment of damages for
unlawful dismissal was enunciated by GUBBAY CJ in Gauntlet
Security Services v Leonard
1997 (1) ZLR 583 (S) in which he said:
“The
employee is entitled to be awarded the amount of wages or salary he
would have earned save for the premature termination of his Contract
by the employer. He may also be compensated for the loss of any
benefit to which he was contractually entitled and of which he was
deprived in consequence of the breach.”
The
remarks by the learned judge show that in assessing damages for
unlawful termination of an employment contract, the court has to
place the employee in the position he would have been save for the
premature termination of the contract.
This
is in line with the object of damages which is to place a party in
the position he or she would have been save for the premature
termination of the contract.
This
position was aptly captured in
Goedhals
v Graaff-Reinet Municipality
1955 (3) S.A 482 in which HALL J, at 487C-E said;
“The
general principle upon which damages are to be assessed was laid in
Victoria
Falls and Transvaal and Power Co. Ltd v Consolidated Langlaate Mines
Ltd
1915 A.D. at p22, where it is stated that, so far as possible, the
person injured must be placed in the same position as he would have
been if the contract had been performed. On this principle it appears
to me that the question which the trial court would have to decide in
order to assess damages in this case is what would the opportunity of
finding water be worth to the plaintiff under the circumstances of
the case.”
What
is derived therein is that damages are awarded for what can be termed
as expectation loss. There
was no dispute between the parties regarding the nature of the
respondent's contract of employment with the appellant. Thus his
status was never in issue. His was a fixed term contract. Further, it
was not in dispute that when he was dismissed his contract only had
six months before it was due to expire.
Mr
Mucheche
conceded, properly in my view, that a distinction had to be drawn
between reinstatement to a contract without limit of time and one
that was of fixed duration.
He
however, detracted from this concession by submitting that there
should be no distinction between the two when considering
consequential damages arising out an unlawful termination of a
contract of employment.
In
casu,
the contract of employment signed by the parties as outlined above,
was for a duration of 36 months, which point was conceded by the
respondent. This means that the relationship between the parties was
expected to expire on the last day of the 36th
month.
The
appellant submitted that based on the principles of law that one is
compensated for the loss he suffered as a result of the breach, the
respondent was entitled to be awarded the amount of wages or salary
he would have earned save for the premature termination of the
contract.
This
is the correct position.
Damages
for unlawful termination in relation to an employee who was on a
fixed term contract ought to be calculated in relation to unexpired
period of that contract.
This
position is fortified in Myers
v Abramson
1952 (3) SA 121 (C) in which, in relation to damages for breach of a
fixed term contract of employment, the court stated the following:
“The
measure of damages accorded such employee is, both in our law and in
the English law, the actual loss suffered by him represented by the
sum due to him for the unexpired period of the contract less any sum
he earned or could reasonably have earned during such latter period
in similar employment.' (at 127 D-E).”
The
standard in Myers
v Abramson
intimates that an employee will be entitled to his proven actual
damages, which is the loss of income for the unexpired period.
The
court a
quo
awarded the respondent damages in lieu
of reinstatement for a period of 12 months yet the remaining
period was
six months.
The
court a
quo
failed to take cognisance of the fact that damages in lieu of
reinstatement, are in fact, a substitute of reinstatement.
The
question that ought to have exercised its mind is; if the respondent
were to be reinstated, what would be the period of his engagement in
terms of the contract?
The
answer is obviously six months because it is clearly stated in the
contract that it was for the duration of 36 months.
The
court also accepted the appellant's reasoning that the court a
quo
in making the order it made, actually created a new contract for the
parties.
That
was a violation of the principle of sanctity of contracts.
In
Book
v Davidson
1988
(1) ZLR 365 (S),
the sanctity of contracts was discussed as follows:
“There
is however another tenet of public policy, more venerable than any
thus engrafted onto it under recent pressures, which is likewise in
conflict with the ideal of freedom of trade. It is the sanctity of
contracts... If there is one thing which more than another public
policy requires, it is that men of full age and competent
understanding shall have the utmost liberty of contracting, and that
their contracts when entered into freely and voluntarily shall be
held sacred and shall be enforced by courts of justice. Therefore you
have this paramount public policy to consider - that you are not
lightly to interfere with this freedom of contract... to allow a
person of mature age, and not imposed upon, to enter into a contract,
to obtain the benefit of it, and then to repudiate it and the
obligations which he has undertaken is, prima facie at all events,
contrary to the interests of any and every country.”
The
above dictum shows that the principle of sanctity of contracts
confines the court only to interpreting a contract and not creating a
new contract for the parties. It entails that the court should
respect the contract made by the parties and give effect to it.
The
dispute between the parties does not and cannot extend beyond the
life span of the contract. Clearly, the court a quo misdirected
itself in extending the dispute beyond the life of the contract. If a
contract is for a fixed term it automatically expires at the end of
the specified period unless the parties thereto mutually agree to its
termination. So too do any obligations entered into for performance
by the parties to the contract.
By
accepting that the dispute of the parties did not extend beyond the
life of the contract, Mr Mucheche
was in effect conceding that there was no place for a claim for
consequential damages.
Such
claim could only properly arise if there was a legitimate expectation
that the respondent would be offered permanent employment, which was
never the contention.
What
is at issue is the computation of damages for the unexpired period of
the contract.
In
terms of clause 3.1 of the contract the appellant had the sole
discretion in deciding whether or not to offer the respondent a
permanent position.
When
the respondent was dismissed the appellant had not exercised that
discretion.
As
a consequence the court a quo ought to have given effect to that
clause. Its failure to do so meant that it was extending the period
of the contract on its own volition contrary to the wishes of the
parties as expressed in the contract.
It
was therefore a serious misdirection on its part to award damages for
a period beyond the date of termination as stipulated in the
contract.
The
court a quo completely ignored the agreement that had been entered
into between the parties which stipulated the duration of the
relationship between the parties.
It
should also be noted that in the absence of a finding that the
respondent had a legitimate expectation that he would be given a
permanent contract, there was no justification for the method it used
to quantify damages.
The
respondent had not completed his training period at the time that he
was dismissed and he had failed two core courses which he resat for
examinations in 2005 and failed. He would only be competent to be
employed on a permanent basis after successfully completing the
training. Paragraph 9 of the Zimbabwe Revenue Authority Staff
Training and Development Policy provides:
“A
Revenue Trainee who fails to successfully complete level 2 and has a
negative mentor's report will have his/her contract of employment
terminated at the end of the prescribed traineeship period. However,
in exceptional cases or on recommendation by a mentor/supervisor,
he/she may be given one chance to re-sit the failed subject.”
He
did not deny that he had rewritten the required examinations and that
he had failed a second time.
His
explanation upon being shown the examination scripts was that he had
forgotten having written the said examinations.
Against
these clear admissions it was therefore a serious misdirection on the
part of the court to accept a contention from the respondent that he
had only seen the 2005 examination scripts for the first time in
court when the appellant produced them.
From
what is stipulated in the policy, it is clear that the respondent's
employment would have been terminated at the end of the 36 months
because he had failed the examinations.
There
was no basis upon which the respondent could have at law been
entitled to more than what he would have
earned
during the unexpired period of his contract with the appellant and
thus there was no legal basis upon which the court a
quo
made the order it did.
It
is for the above reasons that we allowed the appeal and made the
following order:
1.
The appeal be and is hereby allowed with costs.
2.
The order of the Labour Court is set aside and the following is
substituted:
(a)
The appellant shall pay the respondent the amount of US$1,470.00 as
back-pay and benefits less US$900.00 earned by the respondent from
informal jobs over a period of six months.
CHIDYAUSIKU
CJ (Deceased): I
agree
MUTEMA
AJA (Deceased): I
agree
