One
morning, in February 2009, Zimbabweans woke up and found themselves
subjected to a 'multi-currency system'. The Zimbabwean dollar was
no longer accepted as legal tender. A basket of other currencies,
such as the United States dollar and the South African Rand, were
introduced into our society.
The
truth of the matter is that these currencies had ...
One
morning, in February 2009, Zimbabweans woke up and found themselves
subjected to a 'multi-currency system'. The Zimbabwean dollar was
no longer accepted as legal tender. A basket of other currencies,
such as the United States dollar and the South African Rand, were
introduced into our society.
The
truth of the matter is that these currencies had been circulating on
what had been dubbed a 'parallel market' for quite some time.
There are those who welcomed the formal adoption of those currencies
as legal tender in this country which had been ravaged by the
knock-on effects of super hyper inflation. Others bemoaned the
symbolic annihilation of our currency which they associated with a
corresponding perception of the annihilation of our national
sovereignty. The majority of the people were perturbed by the effect
of the introduction of the multi-currency system on their pensions,
insurance policies, and life savings.
This
case is about a group of workers who, between them, gave more than
twenty years of loyal service to their employer. In terms of the
pension policy that was in operation at the outset both employer and
employees diligently contributed monthly to a pension fund.
The
issue that falls for determination, put simply, is whether all sixty
seven employees are entitled to challenge the determination by the
employer as to what constitutes their basic annual salary for
purposes of calculating their pension benefits. Depending on the
answer to this question, the court will have to determine, further,
whether these employees are entitled to demand further payments by
the employer towards their eventual pensions.
At
the heart of these issues lies the contentious issue of the effect of
the introduction of the 'multi currency' system on the
calculation of pension contributions which had previously been based
on our local currency, and were now set to be calculated on the basis
of the United States dollars, the currency that the employees were
now remunerated in.
Some
would say that the question ought to be holistically and definitively
addressed by Parliament as a matter of policy. Others feel that it is
simply a question of implementing the provisions set out in the
relevant pension fund.
We
have been asked to issue an interdict and a declaratur
as to the parties' rights and obligations in terms of the rules of
their pension fund.
The
application before the court was filed of record on 16 December 2013.
The founding affidavit was deposed to by G. Chiparaushe in a personal
capacity and as the duly authorized representative of the sixty six
other applicants who attached supporting affidavits authorizing him
to represent them.
The
first respondent is a sugar cane growing and processing company duly
registered in accordance with the laws of this country and the
employer of the sixty-seven applicants.
To
avoid confusion, the first respondent shall be referred to as
TRIANGLE. The second respondent is the Triangle Senior Staff Pension
Fund (to be referred to as TSSPF), a properly constituted pension
fund, duly registered with the Commissioner of Insurance, Pension and
Provident Funds Act (IPEC), in terms of section 6 of the
Pension
and Provident Funds Act [Chapter
24:09].
The
Triangle Senior Staff Pension Fund (TSSPF) is governed by its rules
(the Fund Rules).
The
first applicant averred that the application before the court was
brought in accordance with Rule 9 of the Triangle Senior Staff
Pension Fund Rules which provides that a member or any person whose
claim is derived from a member shall have the right to refer a
dispute to a court of law in this country for determination.
The
applicants had previously approached an arbitrator, Honourable J.T
Mawire, in terms of the Labour Act [Chapter
28:01]
to determine the dispute, and, on or about the 5th
of September 2013, the arbitrator found that he did not have the
jurisdiction to determine the dispute between the parties.
It
was submitted, on behalf of the applicants, that they had a clear
right to the interdict and declaratur
that they sought.
The
first applicant averred that he became an employee of TRIANGLE on the
1st
of April 1980, and a member of the Triangle Senior Staff Pension Fund
(TSSPF) on the 1st
of July 1996. As from the date of his membership to the Triangle
Senior Staff Pension Fund, TRIANGLE commenced deducting his share of
pension contributions from his basic salary. The applicant remains a
member of the Triangle Senior Staff Pension Fund to date.
The
first applicant averred, further, that in terms of clause 11 of his
contract of employment, membership to the Triangle Senior Staff
Pension Fund (TSSPF) became compulsory on the date of his
appointment, and his contribution of 7% of his basic monthly salary
was automatically deducted and forwarded to the Triangle Senior Staff
Pension Fund (TSSPF), by TRIANGLE, every month. According to the
Terms and Conditions of the employment of C Band
staff (Loss Control Manager), as at 1 July 1996 the basic salary was
pegged at ZW$90,948=. The pension contribution of 13% came to
ZW$11,823=. Under the heading “remuneration” was a note to the
effect that:
“The
basic salary is pensionable and the company currently contributes 13%
to the Triangle Senior
Staff Pension Fund.”
After
the basic salary was a list of benefits which were to be paid on
behalf of the employee on a 50% contribution basis, such as CIMAS
medical aid and a drug scheme. Further benefits included an education
allowance which was expressly qualified as being taxable.
The
first applicant averred that, currently, in terms of Rule 19 of the
Triangle Senior Staff Pension Fund Rules, TRIANGLE is obliged to make
a corresponding monthly contribution to the Triangle Senior Staff
Pension Fund of 13.5% of the first applicant's basic monthly
salary. On the basis of the aforesaid, the first applicant averred
that he and his fellow applicants have a clear right to have a
deduction of 7% of his basic monthly salary made and to have a
corresponding 13.5% of his basic monthly salary contributed by
TRIANGLE. Failure to match the first applicant's contribution would
be a failure by TRIANGLE to abide by the Triangle Senior Staff
Pension Fund Rules.
It
was submitted that, in or about October 2000, the Managing Director
of TRIANGLE, Mr. J. M. Cleasby, advised members of the Triangle
Senior Staff Pension Fund (TSSPF) that it was closed to new entrants
on the basis that its existing members would be given an option to
transfer to a different pension fund, the Triangle Pension Plan
(hereinafter referred to as The Money Plan). In November 2000, Mr.
Cleasby wrote a letter to the members of the Triangle Senior Staff
Pension Fund and advised them that the date of transfer to The Money
Plan was the 1st
of January 2001. Paragraph 3 of the letter stated that:
“To
assist you in making a decision please find enclosed;
(a)
Comparison booklet.
(b)
Illustration letter.
(c)
Option form.”
It
was submitted, on behalf of the applicants that, TRIANGLE caused a
booklet called 'Defined Benefit Triangle Senior Staff Pension Fund
or Defined Contribution The Money Plan', which compared the two
schemes to be published. All sixty seven applicants opted to remain
members of the Triangle
Senior Staff Pension Fund (TSSPF).
The
first applicant averred that the applicants suffered an injury and/or
that, alternatively, an injury is reasonably apprehended by them. In
support of this contention is the averment found in paragraph 18 of
the first applicant's founding affidavit, that TRIANGLE has
unilaterally decided to refuse to make its share of contributions to
the Triangle
Senior Staff Pension Fund and/or
to deduct their 7% contributions from their basic monthly salaries.
The allegation against TRIANGLE is that, by refusing to recognize
most of the earnings of members of the Triangle
Senior Staff Pension Fund (TSSF)
as 'pensionable', it has, by its conduct, breached the terms of
the Triangle
Senior Staff Pension Fund Rules
and interfered with the accrual of pension benefits.
In
support of this averment, the first applicant referred to a letter to
the trustees of the Triangle Senior Staff Pension Fund (TSSPF), dated
1 April 2009, written by the TRIANGLE managing director, Mr. S. D.
Mutsambiwa. The letter was entitled “Pensionability of US$
Salaries”. It reads as follows:
“Kindly
note that the January 2009, February 2009 and March 2009 salaries
have been paid in USD$ to employees who are members of the Triangle
Senior Staff Pension Fund (TSSPF). These
salaries were paid in USD$ without any confirmation by the employer
whether or to what extent the salaries would constitute pensionable
emoluments.
A decision in this regard is still to be made pending a review of the
'dollarisation' of the Zimbabwean economy and the bearing this
will have, amongst other things, on the functioning of the Fund. The
company will be arranging a meeting with the Board of Trustees in the
near future to consider the way forward both in relation to existing
pensioners and active member. In the meantime, and until further
notice, contributions will be remitted to the Fund Administrators as
an interim measure pending final decisions regarding the way forward
in respect of the Triangle Senior Staff Pension Fund (TSSPF). This
interim arrangement should under no circumstances be regarded as an
implied decision having been taken that current USD$ salaries are
indeed classified as pensionable emoluments.”…,.
On
8 July 2009, TRIANGLE introduced the “guaranteed package” to
employees in the Executive grade, backdated to June 2009….,.
In
paragraph 24 of his founding affidavit, the first applicant avers
that all the applicants were forced to sign the acceptance letter in
unilateral variation of their conditions of employment.
To
prove this claim, he referred to an electronic mail communication
dated 15 December 2009, addressed to Mr, Eston, in which Fred Nyangwe
advised that Mr. Eston's failure to sign the letter which contained
the new conditions of service, meant that, with effect from 1
December 2009, his salary, as set out in the letter, would be
discontinued and he would go back to earning his old salary as at 31
May 2009. He was also advised that the difference between the two
salaries, which he had been paid, would be deducted from his old
salary until it had been recovered in full.
On
7 October 2010, TRIANGLE announced that the Triangle
Senior Staff Pension Fund (TSSPF)
would be discontinued and its active members moved to the Money Fund
with effect from 1 November 2010. The Triangle
Senior Staff Pension Fund Trustees
refused to sign a resolution to approve the disbanding of the Fund on
the basis that this violated the Triangle
Senior Staff Pension Fund Rules
and constituted a reversal of the undertakings made by TRIANGLE to
the Fund members.
The
Trustees were of the view that the procedure set out by Rule 36 of
the Triangle Senior Staff Pension Fund Rules had not been followed.
A
meeting was held at which TRIANGLE announced the transfer of the
Triangle
Senior Staff Pension Fund members
to the Money Plan and told the members that the transfer values would
be based on January 2009 salaries and not on current salaries.
Again,
this was alleged to be in violation of the Triangle
Senior Staff Pension Fund Rules.
The
applicants' contention is that the relevant Rule equates
pensionable emoluments to a member's basic salary or wage. Members'
basic salaries had increased significantly since 2009, in some
instances by 500%. TRIANGLE contended that following the Triangle
Senior Staff Pension Fund Rules
would result in its bankruptcy.
On
19 October 2010, the Triangle Senior Staff Pension Fund members
delivered a petition to the trustees of the Triangle Senior Staff
Pension Fund to demonstrate that they did not wish or agree to
transfer from the Triangle Senior Staff Pension Fund (TSSPF) to the
Money Plan. On 15 February 2011 the trustees addressed a letter to
the TRIANGLE Human Resources Manager. Paragraph 3 of the letter reads
as follows:
“…,.
Of concern by members is why the trustees are not being consulted on
the future of the Fund in accordance with the Fund's rules. Member
trustees are not being kept informed as to what is happening and are
not being asked for input or direction…”
In
February 2011, TRIANGLE announced a further annual salary review
together with changes to the structure of employment benefits.
Members were asked to agree to and sign for these changes by 7 March
2011. Part of a letter written to Mrs. Eston (one of the applicants)
on 21 February 2011, by Human Resources, reads as follows:
“Dear
Mrs Eston,
The
structure of your remuneration package has been reviewed in the
context of the need to align the employee remuneration framework…,.
It
is confirmed that your actuarily calculated benefit in the TSSPF is
to be based on the USD$ salary that has been used to determine your
Fund contributions since 1 January 2009…,.”
In
response to the petition by members of the Triangle
Senior Staff Pension Fund (TSSPF),
the Insurance and Pensions Commission (IPEC) called a meeting and
advised that TRIANGLE was at liberty to disband the Triangle
Senior Staff Pension Fund (TSSPF)
- but only after fully funding it and complying with the requisite
termination procedures.
In
paragraph
38 of the founding affidavit, it is averred, on behalf of the
applicants, that they have no other remedy. Various meetings with the
trustees have not yielded any results. TRIANGLE has continued to
refuse to recognize members' basic salary as the pensionable
emolument. Repeated appeals to the Insurance and Pensions Commission
(IPEC) to intervene have not yielded any tangible solutions.
The
applicants reiterate that no other remedy other than a declaratur
and an interdict can assist them to assert their pension rights.
On
20 January 2014, TRIANGLE filed a notice of opposition.
The
opposing affidavit was deposed to by Fred Nyangwe, the Human
Resources director. He raised various points in
limine;
(i)
The
first of which was that the applicants had failed to exhaust domestic
remedies.
(ii)
The second preliminary point raised is that there are material
disputes of fact which make this matter incapable of resolution on
the papers filed of record.
(iii)
The third preliminary point raised in the founding affidavit is that
this matter is lis
pendens,
the decision of the arbitrator, Mr. Mawire, of 23 September 2013, not
being final.
(iv)
The final preliminary point raised is that this matter has prescribed
because the applicants' claims arose in August 2009, or,
alternatively, January and August 2010.
On
20 February 2014, an answering affidavit was filed on behalf of the
applicants. TRIANGLE was accused of usurping the power of the Board
of Trustees of the Triangle
Senior Staff Pension Fund (TSSPF)
and of attempting to close the Fund. The trustees deliberated over
the dispute for more than two years and it was alleged that they have
failed to resolve the issue because the chairman of the Fund
frustrated all efforts to settle the matter. It was contended that
TRIANGLE frustrated efforts by the
Insurance and Pensions Commission (IPEC)
to resolve the dispute starting with the meeting of 6 October 2011,
by failing to comply with the Insurance
and Pensions Commission directives.
The
issues that fall for determination before this court are as follows:
1.
Whether this court is correctly seized with this matter.
2.
Whether the applicants failed to exhaust domestic remedies.
3.
Whether the applicants claim has prescribed.
4.
Whether there are material disputes of fact which are not capable of
resolution on the papers filed of record.
5.
What constitutes basic salary for purposes of calculating the
contributions due from the applicants and from TRIANGLE for onward
transmission to the Triangle Senior Staff Pension Fund (TSSPF) every
month.
6.
Whether the applicants are entitled to the relief sought...,.
(c)
Is this matter still pending before another forum?
It
was contended, on behalf of TRIANGLE, that the applicants had
referred a dispute to a labour officer who referred the matter to
compulsory arbitration in terms of section 93(5)(a) of the Labour
Act [Chapter 28:01].
The arbitrator made a series of awards, the latest of which is dated
5 September 2013. That award, it is argued, is an interim award based
on interim issues raised and is not a final award. For that reason,
the resolution of the pension and labour issues, on merit, is still
pending before the arbitrator.
It
was submitted that the principle of lis
pendens
is
one of public policy to avoid a litigant having to meet multiple
actions on the same subject matter before different fora
at
the same time. The second court has a discretion whether or not to
stay the additional proceedings having regard to the equities and to
the balance of convenience in the matter. The court was referred to
the following cases as authorities for this proposition. Baldwin
v Baldwin 1967 RLR 289 (G)
and
Mhungu
v Mtindi
1986
(2) ZLR 171 (SC).
The
applicants strenuously denied that this same matter is currently
pending before the labour arbitrator, Mr. Mawire. They accepted that
they had approached a labour officer on the basis that TRIANGLE was
depriving them of their pension benefits. They admitted that the
matter was referred to compulsory arbitration, and, after a
protracted hearing, the arbitrator concluded, in an award dated 5
September 2013, that the enforcement of pension rights falls outside
the purview of labour rights justiciable under labour courts and
tribunals. The arbitrator said that:
“While
pensions are referred to in labour jurisprudence, this does not
necessarily mean that they are exhaustively labour rights. They may
have labour tenets but for purposes of enforcement, they retain a
predominantly non-labour complexion. They fall outside the purview of
labour rights justiciable under labour courts and tribunals.”
Clearly,
the arbitrator declined jurisdiction to determine the dispute between
the parties, and no appeal was filed by TRIANGLE, to the Labour
Court, against this determination of lack of jurisdiction by the
arbitrator. The decision of the arbitrator is extant. The Labour
Court does not have jurisdiction to grant a declaratory order which
is granted in terms of section 14 of the
High
Court Act [Chapter 7:06]
as
follows:
“14
High Court may determine future or contingent rights
The
High Court may, in its discretion, at the instance of any interested
person, inquire into and determine any existing, future or contingent
right or obligation, notwithstanding that such person cannot claim
any relief consequential upon such determination.”
In
the case of Agribank
v Machingaifa
2008
(1) ZLR 244 (S)
the
court said that:
“The
High Court's inherent jurisdiction to grant declaratory orders in
labour matters has not been ousted. The only issue for determination
was whether the case was a proper one for the exercise of the
discretion under section 14 of the High Court Act. The fact that the
dispute could well have been determined in the Labour Court was not
the determining factor.”
In
Mushoriwa
v Zimbank
2008
(1) ZLR 125 (H)
it
was held that:
“The
power to issue a declaratory order is specific to the High Court. The
Labour Court, unlike the High Court, has not been specifically
empowered to issue declaratory orders and cannot create such relief
or the procedure for granting such relief as it is not a court of
inherent jurisdiction. Consequently, if the relief that an applicant
seeks is in the nature of a declaratory order, the High Court would
have original jurisdiction as that power has not been specifically
ousted by statute.”
It
is trite that the Labour Court does not have power to grant
interdictory relief. See NRZ
v Zimbabwe Railway Artisans Union & Ors
2005
(1) ZLR 341 (S).
It
is my view that the preliminary point that the matter is pending
before another forum clearly has no merit. Not only has an arbitrator
declined jurisdiction to deal with the dispute between the parties,
no appeal has been filed to challenge that finding by the arbitrator.
This court clearly has jurisdiction to grant the relief sought -
which the Labour Court does not. The Labour Court also cannot grant
interdictory relief.
There
is no matter pending before another court between the same parties in
regards to the same subject matter.
