This
matter has trudged a long and tortuous journey.
The
applicants are former employees of the respondent who were charged
with misconduct and dismissed in 2005 following disciplinary
processes. The applicants challenged their dismissal right up to the
Labour Court in case number LC/H15/06. The Labour Court found for the
applicants on 5 July 2007 and ordered ...
This
matter has trudged a long and tortuous journey.
The
applicants are former employees of the respondent who were charged
with misconduct and dismissed in 2005 following disciplinary
processes. The applicants challenged their dismissal right up to the
Labour Court in case number LC/H15/06. The Labour Court found for the
applicants on 5 July 2007 and ordered their reinstatement,
alternatively, payment of damages in lieu of reinstatement. The
respondent opted to pay damages, caused their quantification on 10
December 2008 equivalent to 5 years salary using the cut off date of
5 July 2007 and tendered them to the applicants.
The
tender, dated 11 February 2009 from the respondent's legal
practitioners addressed to the applicants' erstwhile legal
practitioners, Mwonzora & Associates, reads:
“RE:
L MAWERE AND OTHERS v FLEXMAIL: QUANTIFICATION OF DAMAGES
In
line with the judgment of the Labour Court handed down on 10 December
2008, please find herewith our client's cheque in the sum of
$12,594=77 (revalued) in full settlement of the amounts due to your
clients. A copy of the schedule as to how the various figures were
arrived at is attached hereto.
You
will note from the computation that the amounts have been revalued
and inflation adjusted to February 2009.
The
matter is accordingly closed…,.”
The
applicants, through their then legal practitioners mentioned above
rejected the tender and returned the cheque in question. The attempt
at payment was tendered after breakdown of quantification
negotiations. The primary reason for rejecting the tender was that
the respondent attempted to pay the damages in Zimbabwe dollars in
February 2009 when the currency had become moribund.
In
their amended draft order the applicants are seeking a declaratory
order in the following terms:
“IT
IS HEREBY ORDERED:
1.
The respondent be and is hereby ordered to pay damages in lieu of
reinstatement to the applicants in United States Dollars using the
initial United States Dollar salary scales which were used by the
respondent when it started paying its employees in foreign currency.
2.
That the respondent pay the costs of suit.”
The
main thrust of the applicants' argument, as gleaned from the
founding affidavit and heads of argument, is as follows:
The
applicants have approached this court, since it is the only court
with inherent jurisdiction, seeking a declaratur
that the principle of currency nominalism has no place in Labour Law
(a common law principle) as it would be at variance with the Labour
Act's aim of achieving social justice. Further, they seek a
declaration to the effect that damages in lieu of reinstatement have
to be paid in an effective manner, that is in an amount, currency,
and quantity that achieves fairness as required by the Labour Act.
The applicants further seek an order compelling the respondent to pay
damages in United States dollars using the initial United States
dollar salary scales which were used by the respondent when it
started paying its employees in foreign currency i.e. in February
2009. A successful appellant, so the argument went, should have a
discretion to choose payment of damages in the currency that will
redress the injury suffered and adequately compensate him/her/ it for
the loss as well as fulfil the objectives of the Labour Act.
Interpreting
the order of the Labour Court to mean payment in Zimbabwe dollars
would amount to making the order a brutum
fulmen
because the Zimbabwe dollar, by the time of the tender, had became de
facto
valueless and useless, this
would amount to non-payment thereby reducing court orders into empty
judgments which is both unfair and against public policy.
The
respondent's opposition was premised on the following main planks:
1.
The matter is res
judicata
in that the Labour Court handed down judgment in case number
LC/H/15/06 ordering the respondent to either reinstate the applicants
or pay damages in lieu thereof. Following quantification of such
damages, the amount due and payable was duly remitted to the
applicants. In the event, this application disguised as an
“application for a declaratory order” is merely meant to deal
with the same issues which were concluded by the Labour Court.
2.
The issue brought before this court is an employment/labour issue and
by virtue of section 89(6) of the Labour Act [Chapter
28:01],
the jurisdiction of this court is ousted.
3.
What the applicants are asking this court to do is to:
3.1
Ignore the salaries payable to the applicants as at 5 July 2007 when
an order of reinstatement was made by the Labour Court.
3.2
Depart from the current position of law and order payment of damages
based on a date after the order of reinstatement was made.
3.3
Ignore the lawful currency that governed the contractual relationship
between the parties as at 5 July 2007 (which required payment of
salaries in Zimbabwe dollars) and set aside that trite position to
enable the applicants to be paid afresh damages in lieu of
reinstatement in US dollars. This is despite the fact that, as at 5
July 2007, the applicants' employment contracts entitled them to
remuneration in Zimbabwe dollars and not in US dollars sought by the
applicants.
4.
The issues raised by the applicants have been dealt with by the
courts on many occasions and are not unique to the applicants.
I
am mindful of the fact that what the applicants are inviting this
court to do, as submitted by counsel for the respondent, boils down
to two pertinent issues, viz:
1.
To do that which Parliament should, i.e. to make law by repealing the
common law principle of currency nominalism; and
2.
To “overrule” those decisions of the Supreme Court which have
already made the point that in quantification of damages in respect
of labour disputes, the rates that are applicable are those that
applied at the time of dismissal or suspension. See Redstar
Wholesalers v E Mabika
SC52-05 and First
Mutual Life Limited v Jackson Muzivi
2000 (1) ZLR 325 (S).
Points
3 and 4 of the respondent's opposition cited above are interwoven
with point 2 cited immediately above so I shall deal with them pari
passu…,.
First, let me deal with points one and two of that opposition quoted
above. They allude to the issue of res
judicata
and ousting of this court's jurisdiction by virtue of section 89(6)
of the Labour Act.
As
regards the issue of res
judicata,
I have not been persuaded that it is applicable in the instant case.
In
order to successfully ground such a defence, the litigant raising it
must show that the dispute has been conclusively settled on the
merits by a court of competent jurisdiction and that the two actions
are between the same parties, concerning the same subject matter
founded on the same cause of complaint. See Gwaze
v National Railways of Zimbabwe
2002
(1) ZLR 679.
The
original dispute before the Labour Court was concerned with the
lawfulness or otherwise of the applicants' dismissal and the
quantum of damages payable in lieu of reinstatement. That court did
not deal with the issue of the form of currency of payment - which is
the gravamen of the present application.
That
issue only arose following the introduction of the multi-currency
regime in January/February 2009 – well after the Labour Court had
already handed down its judgment which was silent on the currency to
be used thereby providing the basis of discretion being asserted by
the applicants. The present application seeks not to reverse, amend
or modify the order that the applicants be paid five years salary as
damages for the unlawful dismissal, but simply seeks a declaratory
order that in view of the introduction of the multicurrency and the
judicial and State recognition of the de
facto
redundancy of the Zimbabwe dollar, a successful litigant may choose
to be paid in any applicable foreign currency in the country and that
payment in a moribund currency is not an effective fulfilment of the
court's order.
The
Labour Court, not being endowed with inherent jurisdiction to make
such a declaration, it cannot be said that the dispute was dealt with
on the merits let alone conclusively settled.
Regarding
the issue that this court's jurisdiction is ousted by section 89(6)
of the Labour Act [Chapter 28:01], I am unable to subscribe to this
view. The subsection cited provides that:
“(6)
No court, other than the Labour Court, shall have jurisdiction in the
first instance to hear and determine any application, appeal or
matter referred to in subs (1)”.
Subsection
(1) has six paragraphs listing the functions to be exercised by that
court to the exclusion of all other courts. Those functions do not
include issuing declaratory orders. This meant that the Labour Court
has no inherent jurisdiction to issue declaratory orders, and, in the
event, the jurisdiction of the High Court remains intact.
In
Sibanda
& Anor v Chinemute NO & Anor
HH131-04, MAKARAU JP…, put it aptly thus:
“Thus,
the power to issue a declaratory order is not available in all courts
that apply common law. It is specific to this court…,.
It
is common cause that the Labour Court has not been specifically
empowered to issue declaratory orders as this court has been. It
cannot create such a relief or the procedure for granting such relief
as it is not a court of inherent jurisdiction.”
I
am in respectful agreement with this view.
I
now turn to the other points raised in opposition cited supra.
Regarding
the point raised, that the applicants are inviting this court to do
what Parliament should, viz
to make law by repealing the common law principle of currency
nominalism, it is settled that it is not impermissible of the
judiciary
to make law by way of decided cases if an opportunity presents itself
to plug a legislative gap especially where not to do so will leave
many an unlawfully dismissed employee languishing in the asylum of
financial misery.
The
applicants are not asking this court to declare that the principle of
currency nominalism no longer has any space in our common law
generally. They are simply asking the court to pronounce that
following the introduction of the multi currency regime, in
January/February 2009, and the concomitant disuse of the Zimbabwe
dollar which had become moribund as a result of economic and many
other circumstances which had conspired to facilitate this major
unprecedented conflagration, and Parliament has remained in a near
catatonic state in addressing this occurrence, this court should
declare that in the realm of employment relations, the principle of
nominalism has, for now, no place until economic normalcy has been
restored.
This
court is enjoined to take judicial notice of the reality that
immediately before and after the country adopted the multi-currency
regime, in about February 2009, the Zimbabwe dollar was so valueless
that it had ceased to be the medium of exchange in all financial
transactions. To therefore have an employer tender damages in lieu of
reinstatement in the form of Zimbabwe dollars in February 2009, as
what the respondent did to the applicants in casu,
is tantamount to giving someone an ordinary stone and expect him/her
to transact using that stone as a medium of exchange. It does not
make any sense in any sane society.
Should
Zimbabwe continue being immutable to change on this score?
On
principles of equity, this court should tread a path that will avoid
iniquity and injustice where legislative intervention is not
forthcoming.
The
words of GUBBAY ACJ…, in the case of Zimnat
Insurance Company Limited v Chawanda
1990 (2) ZLR 143 (S)…, regarding judicial law-making, bear useful
repetition for clarity:
“Even
if confirmation of the appellant's liability to the respondent
should meet with disapproval as being an encroachment upon the
discretion reposed in the law-giver to change the law, we would
strongly defend the Judiciary's
right to do so. Law in a developing country cannot afford to remain
static. It must undoubtedly be stable, for otherwise reliance upon it
would be rendered impossible. But, at the same time, if the law is to
be a living force it must be dynamic and accommodating to change. It
must adapt itself to fluid economic and social norms and values and
to altering views of justice. If it fails to respond to these needs,
and is not based on human necessities and experience of the actual
affairs of men rather than on philosophical notions, it will one day
be cast off by the people because it will cease to serve any useful
purpose. Therefore, the law must be constantly on the move, vigilant
and flexible to current economic and social conditions.”
After
quoting the celebrated American jurist, OLIVER WENDELL HOLMES opening
page of his famous work, The Common Law which reads:
“The
life of the law has not been logic; it has been experience. The felt
necessities of the time, the prevalent moral and political theories,
intuitions of public policy, avowed or unconscious, even the
prejudices which judges share with their fellow-men have had a good
deal more to do than the syllogism in determining the rules by which
men should be governed. The law embodies the story of a nation's
development through many centuries and it cannot be dealt with as if
it contained only the axioms and corollaries of a Book of
Mathematics.”
The
learned ACTING CHIEF JUSTICE, at page 154 paragraphs A-E of Zimnat
Insurance Company Limited v Chawanda
1990 (2) ZLR 143 (S),
went on to say:
“Today,
the expectations amongst people all over the world, and particularly
in developing countries, are rising, and the judicial process has a
vital role to play in moulding and developing the process of social
change. The judiciary
can, and must, operate the law so as to fulfil the necessary role of
effecting such development. It sometimes happens that the goal of
social and economic change is reached more quickly through legal
development by the Judiciary than by the Legislature. This is because
judges have a certain amount of freedom or latitude in the process of
interpretation and application of the law. It is now acknowledged
that judges do not merely discover the law - but they also make law.
They take part in the process of creation. Law-making is an inherent
and inevitable part of the judicial process. The opportunity to play
a meaningful and constructive role in developing and moulding the law
to make it accord with the interests of the country may present
itself where a judge is concerned with the application of the common
law, even though there is a spate of judicial precedents which
obstructs the taking of such a course. If judges hold to their
precedents too closely they may well sacrifice the fundamental
principles of justice and fairness for which they stand.”
The
learned ACTING CHIEF JUSTICE then quoted a famous passage by LORD
ATKIN, referring to judicial precedents:
“When
these ghosts of the past stand in the path of justice clanking their
medieval chains the proper course is for the judge to pass through
them undeterred.”
The
quotations cited above are not only attractive and persuasive but fit
the instant scenario of the application before me like a fiddle.
The
principle of currency nominalism works fairly in an economy which can
be described as normal or stable, or, at the very worst, in which
inflation is not hyper, not like in an environment with a runaway
inflation as was the case in this country in the period immediately
preceding the introduction of the multi-currency regime.
After
introduction of multiple currency, in February 2009, it is beyond
cavil that the Zimbabwe dollar died a natural death by disuse. To
then give someone such currency, which no one nationwide was prepared
to accept in any transaction, let alone beyond our borders, as
damages in lieu of reinstatement, and after having laboured for the
employer for periods ranging between 25 and 46 years like what the
respondents did in casu
is not only immoral but an infringement of a human right.
If
judges continue to cling to their precedents in such a scenario of
social and economic change, like the grasp of an epileptic during a
fit, they will certainly be sacrificing the fundamental principles of
justice and fairness for which they stand.
I
am prepared in the instant case not to let the ghosts of the past
stand in the path of justice clanking their medieval chains but to
pass through them undeterred in the interests of justice and
fairness.
In
any event, the assertion that by granting the order sought would be
usurping the role of the Legislature has no legal leg to stand on for
the issuing of orders in foreign currency has been decisively dealt
with before locally, regionally, and internationally.
In
Makwindi
Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe
1988 (2) ZLR 482 (SC) GUBBAY JA…, was of the view that in the
absence of any legislative enactments which require our courts to
order payment in local currency only, the innovative approaches taken
in England and South Africa, making orders in foreign currency, had
to be adopted in order to bring Zimbabwe into line with other foreign
legal systems. In that case, the court relied on the House of Lords
decision in Owners
of the MV Eleftherotria v Owners of the MV Despina
R (1971) 1 ALL ER 421 (HL).
In
South Africa, a similar approach was followed in the case of Elgin
Brown & Hammer v Dampskibsselskabet Torm Limited
1988 (4) SA 671 (NPD).
After
reviewing the three authorities cited immediately above, MAKARAU JP…,
awarded delictual damages in foreign currency to a party who had
purchased a house in local currency against a seller who had failed
to effect transfer as a result of a prior sale to another party in
Kwindima
Fabiola v Mvudura Louis
HH25-09.
At page 5 of the cyclostyled judgment the learned judge reasoned as
follows:
“It
appears to me that the issue I have to determine is whether to extend
the approach that has been taken in the Makwindi
case and be innovative enough to suggest that where a loss has been
suffered and can be calculated in both the local and in a foreign
currency, the court has a discretion to award judgment in that
currency that will redress the injury suffered and adequately
compensate the plaintiff for the loss. It would then follow that
where that currency is the foreign currency as opposed to the local
currency, then judgement should be in the foreign currency, for to
award damages in the local currency, where the local currency has
been rendered valueless by inflation might be to deny a plaintiff the
redress that he or she seeks.”
Adopting
the approach taken in Kwindima
Fabiola v Mvudura Louis
HH25-09,
I am persuaded that in the instant case, in order to adequately
compensate the applicants, the currency which the respondent must pay
them as damages for unlawful dismissal in lieu of reinstatement
should be in foreign currency. I say so because in a multi-currency
regime where the local currency has become moribund, to award damages
to an unlawfully dismissed employee who has toiled for the employer
for between 25 and 46 years in such local currency is not only
clinging to a positivist jurisprudential approach but iniquitous and
offends against all known tenets of justice in a civilised and
democratic society.
Such
an award should not be a brutum
fulmen
but must be meaningful and beneficial to the beneficiary.
Even
on an international plane, in terms of Article 10 of the I.L.O.
Convention 158 Termination of Employment Convention 1982, adequate
compensation should be paid for unjustified loss of employment.
Certainly
payment in Zimbabwe dollars in this era will not amount to adequate
compensation.
The
last point to deal with relates to points 3 and 4 of the respondent's
opposition as encapsulated in the contention that the applicants are
inviting this court to “overrule” those decisions of the Supreme
Court which have already made the point that in quantification of
damages in respect of labour disputes, the rates that are applicable
are those that applied at the time of reinstatement as held inter
alia,
in the case of Redstar
Wholesalers v Mabika
SC52-05 and First
Mutual Life Limited v Jackson Muzivi
SC09-07.
In
the instant case, the applicants, in applying for payment of their
damages to be made in US dollars want the rate applicable to be “the
initial United States dollar salary scales which were used by the
respondent when it started paying its employees in foreign currency.”
In support of their contention in this regard, the applicants argued,
in their heads of argument, in this vein:
“As
to a potential objection of what would be the appropriate salary in
foreign currency to use, this is not an insurmountable obstacle.
Reference may be had to the salary scales of the first month that the
respondent first started fully and wholly paying its employees
remuneration in foreign currency. Alternatively, is to look at the
first National Employment Council (NEC) salaries in foreign currency
and applying those. After all, these are exactly the salaries that
the applicants would have been earning if they had been reinstated
rather (than) being paid damages in lieu of reinstatement. What is
called for here is not mathematical precision computation but
substantive justice and fairness that, in the words of OMERJEE J in
Stanmarker
Mining (Pvt) Ltd v Metallon Gold Corporation,
places the successful party 'as nearly as possible in the same
position as he would have occupied if the contract had been
performed…,.'”
Prima
facie,
the argument is titillating.
The
citation of Stanmarker
Mining (Pvt) Ltd v Metallon Gold Corporation is
HC3074/04. Therein, OMERJEE J made the pronouncement when holding
that regarding judgments sounding in foreign currency “it is the
plaintiff's prerogative to claim in a currency that will most truly
express his loss and accordingly most fully and exactly compensate
him for that loss. However, in order to succeed, a claimant is
required to lay a foundation that supports him claim.”
In
that case, the court found that the plaintiff had laid an adequate
foundation establishing its entitlement to damages in United States
dollars because the defendant was selling the disputed shares (which
it claimed were valued in Zimbabwe dollars) in United States dollars
including their final disposal.
I
am constrained to shy away from the applicants' contention in this
connection for two reasons;
(i)
Firstly, the pronouncements by OMERJEE J, in Stanmarker
Mining (Pvt) Ltd v Metallon Gold Corporation HC3074/04,
were confined to the choice of currency by the claimant which I have
already disposed of supra
in
the applicants' favour and not to the rate of salary to invoke when
calculating damages in lieu of reinstatement.
(ii)
Secondly, and more importantly, based on the doctrine of stare
decisis,
this court is bound by the plethora of Supreme Court decisions to the
effect that in calculating damages for unlawful dismissal in lieu of
reinstatement, the rate of salary to be used is the one pertaining at
the date of the reinstatement order - certainly not the one obtaining
at a later date.
Since
I have already held that the applicants must be paid their damages
not in Zimbabwe dollars but in foreign currency of their choice (and
they chose the United States dollars), the rate of salary to be used
in the calculation of the damages should be the one obtaining as at 5
July 2007 (the date of the reinstatement order) but being the
official rate of exchange of the Zimbabwe dollar – United States
dollar equivalent.
I
also find that the respondent, in the face of the stark economic
reality obtaining at the time of its tender of the damages, was quite
unreasonable in refusing to yield to reason. It should accordingly
pay the applicants costs of suit. In any event, costs always follow
the result.
In
the event, there is need to amend the applicants' amended draft
order to read as follows:
“IT
IS HEREBY ORDERED:
1.
The respondent be and is hereby ordered to pay damages in lieu of
reinstatement to the applicants in United States dollars using the
official rate of exchange of the Zimbabwe dollar-United States dollar
equivalent obtaining on 5 July 2007.
2.
That the respondent pay the costs of suit.”
