GWAUNZA
JA: This
is an appeal against the entire judgment of the Labour Court which upheld an
award made by the arbitrator, in favour of the respondent.
The facts of the matter are set out in the judgment of
the court a quo and have been amplified
with details from the appellant's heads of argument and the arbitrator's
award. The additional details are
necessitated by the need to consider a point
in limine raised for the first time on appeal by the appellant.
The undisputed facts are these. On 2 August 2000 the
respondent, who was in the appellant's employ, was suspended from work for
alleged misconduct pending the determination of an application by the appellant
to dismiss him. On 12 July 2002, a labour officer
found that there were no grounds for the respondent's dismissal and ordered his
reinstatement without loss of salary or benefits. Alternatively the labour officer ordered that
the respondent be paid an agreed exit package as cash in lieu of reinstatement. A dispute thereafter arose over both the
payment and quantification of the damages ordered. The dispute was initially placed before an
arbitrator who sadly passed on before it could be resolved. In 2011 the matter was finally taken over by
another arbitrator, who on 12 March 2012 awarded the respondent back pay and
benefits from the date of suspension (2 August 2000) to the date reinstatement
was ordered (12 July 2002). The arbitrator
in addition awarded the respondent 36 months' damages in lieu of reinstatement, which were denominated in Zimbabwe
dollars. The arbitrator went on to convert
this amount and the amount representing back pay and benefits, at the rate of 1
USD – ZIM $55.04 and came up with a combined total of USD28,154.26. This is the award that the court a quo upheld, and against which this
appeal has been filed.
The point in limine raised by the appellant is to the effect that the respondent's
claim has prescribed. The court heard argument on this point but reserved its judgment
on it. The parties then proceeded to
argue the merits of the matter. I will
deal first with the point in limine,
and the court's ruling on this point will determine whether or not it is
necessary to consider the merits of the dispute.
1. Prescription
The appellant contends
that the respondent's claim for damages prescribed on 12 July, 2005, 3 years
after the “cause of action” arose. It is the appellant's
submission that the relevant cause of action arose on 12 July 2002 when a
labour officer ordered that the respondent, unless reinstated, be paid damages in lieu of reinstatement. Further, that
although the respondent initiated quantification proceedings in relation to these
damages before a labour officer in October 2003, he had not waited for
completion thereof but went to his rural home in Buhera. He had only
re-surfaced on 1 September 2011 to institute fresh quantification of
damages proceedings.
The respondent challenges
the point in limine, and prays that
it be dismissed.
I will start with a
consideration of whether or not the point in limine meets the requirements for being raised for the first time
on appeal. The appellant correctly avers that a point of law may be raised for
the first time on appeal where the point;
(i)
is covered by the pleadings,
(ii)
there would be no unfairness to the other
party;
(iii)
the facts are common cause and
(iv)
no further evidence would be required to
support the point.
(See Austerlands (Pvt) Ltd v Trade and Investment Bank Ltd & Ors
2006 (1) ZLR 372(H).
1.1
Was the point covered in the pleadings?
The point in limine was raised for the first time
in the appellant's heads of argument before this Court. It is not in dispute that in all the post
July 2002 proceedings in this protracted dispute, no mention was made –
directly or indirectly – of the prescription issue. In reality, the question of who between the
parties contributed to the delay in the finalisation of the matter was raised
and canvassed in relation to the date up to which any damages due to the
respondent were to be paid, and not in relation to prescription. The respondent took the opportunity to
respond to the appellant's contention on this issue, in its own heads of
argument. The court has not been pointed to anything in the documents on
record, that suggests that the question of prescription was ever raised in the
pleadings. My own perusal of the record
does not reveal any mention in any of the pleadings, of this issue. I
accordingly find that beyond listing the requirements for the raising of a
point of law for the first time on appeal, the appellant has not proffered
sufficient evidence to substantiate its averment that this first requirement
was met. The court was thus not been able to properly
determine this matter.
Accordingly this point is
determined against the appellant.
1.2
Unfairness to the other party
The appellant in its
heads of argument has not advanced any argument to support a finding that the introduction
of the point of law in question for the first time on appeal would cause no
unfairness to the other party. The
respondent has also not been helpful in this respect, having only stated in his
heads of argument that the issue of prescription “has no basis”. I take the time to point out that parties are
expected to argue their cases so as to persuade the court to see the merit, if
any, in the arguments advanced for them.
They are not expected to make bold, unsubstantiated averments and leave
it to the court to make of them what it can.
In as much as the court is handicapped in terms of being able to properly
determine this point, so too is the respondent.
He has not been given enough detail to enable him to understand, and
properly defend, the case posed against him in this respect. The effect of
this, in my opinion, is to visit unfairness on the respondent. The appellant
bore the burden to prove its case on this point but lamentably failed to do so.
This point too is
determined against the appellant.
1.3
Are the facts common cause?
I have indicated that the
facts outlined above were undisputed.
This is however, not the case with the specific facts on which the point
in limine is premised. The appellant avers that after the labour
officer set aside the respondent's dismissal and ordered that he be reinstated
and paid back pay and benefits, alternatively damages in lieu thereof, he approached a labour officer seeking the payment
of damages on 16 October 2003.
Further, that the
respondent had thereafter not pursued the issue of quantification of damages
because he was in his rural home, Buhera. Neither party has enlightened this Court as
to the exact nature of the respondent's non-pursuance of the issue of
quantification of damages. Did he
withdrew the matter, did it lapse of want of prosecution, or also importantly,
did the appellant for its part, seek to have the matter dismissed for that
reason? The answers to these questions
would have been of assistance to the Court.
The lack of answers might also explain why neither the arbitrator nor
the Labour Court made an issue out of the alleged filing of an earlier case by
the respondent for quantification of damages. The respondent in any case
contends that any prescription that could be said to have operated against him,
was interrupted by the appellant's filing of an appeal. He elaborates on this averment
as follows in his heads of arguments:
“Page 84 (of the
record) will show that the delay in finalising the matter between the parties
was caused by the appellant herein. The
appellant filed an appeal which they did not prosecute. The respondent was resident in his rural home
and when he decided to check with the court he discovered that the appeal had
not been prosecuted and decided to take up this matter.”
As can be seen from this
statement, the respondent has not given an indication as to when this appeal
might have been filed, nor against what and for what relief. The appellant in its turn has made no submission,
nor commented, on this alleged appeal, especially considering that it was
raised before the arbitrator and might therefore, conceivably, have had a
bearing on its point in limine. This Court again finds itself incapacitated
in any effort to determine whether or not the alleged prescription was, in fact
interrupted. More importantly, it cannot be said, in view of all this, that all
the facts in this matter were common cause.
This point is also
determined against the appellant.
1.4
Is further evidence required?
My determination on the
disputes of fact surrounding the issue of delays in finalising this matter,
which has a bearing on the point in
limine relating to prescription has, in my view settled the point on
whether further evidence is required.
Further evidence would indeed be required to support the arguments on
the point in limine.
This point is, once more,
determined against the appellant.
I find in the result,
that the appellant has failed to establish the requisite basis for raising the
point of law in question, for the first time on appeal.
The point in limine is accordingly dismissed.
2. Merits
I will now turn to the
merits of the appeal.
The appellant raises two main grounds of
appeal, as follows;
i)
The Labour Court grossly misdirected
itself in upholding the arbitrator's award of 36 months' damages to the
respondent when, in fact, there was no evidence on record to support this
finding.
ii)
Whether the respondent was entitled to
damages in lieu of reinstatement
(including back pay) denominated in US Dollars when the lawful currency of
Zimbabwe at the date the order of reinstatement or payment of damages was made (July 2002) was Zimbabwe dollars,
and further, when the cause of action
arose, and the alleged damages were suffered, in Zimbabwe dollars.
It is evident from the
appellant's grounds of appeal that it does not take issue with the award, per se, of back pay and damages to the
respondent. The appellant does not question the amounts cited as representing
the respondent's salary for the period August 2000 to July 2002, nor that the latter
should be the cut-off date for calculating both the back-pay and damages. Rather, the appellant's concerns are centred
on the period of 36 months awarded in terms of damages and the conversion of
both amounts from Zimbabwe to United States dollars. Accordingly, the
arbitrator's award to the respondent in terms of back – pay and benefits from
August 2000 to July 2002, stands uncontroverted. This amount according to the
arbitrator's calculations on page 90 of the record, adds up to Z$446,442.00. The court a
quo's decision in respect of this amount, will accordingly be upheld.
2.1 The
award of 36 months'damages
It has already been
observed that the appellant initially brought his claim for quantification of
damages before a labour officer. It is
noted in the arbitrator's award that the matter was subsequently referred to an
arbitrator, a Mr M.T. Vareta who
unfortunately passed on before he could finalise the matter. It is not clear from the record what specific
terms regulated the mandate of the arbitrator in casu, in relation to the proceedings before the first arbitrator.
What is however implied by both parties, through their references to it,
is that oral argument on the dispute was heard before Mr Vareta. The appellant
refers to what was said in cross-examination by the respondent on the issue of
mitigation of his loss. The respondent,
on the other hand, alludes to the oral proceedings before Mr Vareta, and avers that evidence
relating to his age, his qualifications and health had been led in relation to
the issue of quantification. Whatever the truth of the matter might be, the
arbitrator in casu makes no direct
reference to the evidence placed before Mr
Vareta nor, specifically, whether he determined the issue pertaining to the
quantification of damages in lieu of
reinstatement based on what had been submitted before Mr Vareta. All the arbitrator
said was:
“It is of course
trite that in considering the amount of damages to be paid, what should be
considered is the period of time it would have taken a dismissed employee to
find alternative employment and allow him that period's salary as damages. It is my considered view that the claimant
could have gotten reasonable alternative employment in 3 years' time (36
months) considering his age, health
and qualifications see Baison
Ncube's v Delta Beverages
LC/MT/81/87. Claimant is therefore entitled
to 36 months' salary as damages, albeit
in US dollars.”(my emphasis)
It is pertinent to note
that the arbitrator did not specify the respondent's age, health and
qualifications that he mentioned. The period of 36 months, according to his
award, was to be reckoned from 12 July 2002, the date on which reinstatement or
damages in lieu thereof, was ordered
by the labour officer. While the arbitrator gives the impression that he
considered the respondent's age, health and qualifications in computing the
period for which the damages in question were to be paid, it is not in dispute
that, with the consent of the parties, he determined the matter on the basis of
written submissions from them. In his summary of the respondent's submissions
before him, the arbitrator makes no reference to the fact that the respondent
had made any allusion to his health, age and qualifications as a basis for his
claim for damages. The respondent avers, a fact which is denied by the
appellant, that he submitted before Mr
Vareta, details concerning his age, qualification and health status in
relation to the question of damages. It
is significant that he does not state that he placed this evidence before the
arbitrator in casu. I find in view of
this that there is merit in the appellant's submission that the arbitrator
erred by awarding the respondent 36 months damages in lieu of reinstatement without hearing any evidence as to his
age, health and qualifications. The court a quo, being none the wiser concerning whether or not the
arbitrator had direct knowledge of these issues, resorted to speculation and
stated as follows in its judgment.
“It is important
to observe that, even though the record before the court does not show such,
the age, health and professional qualifications of the respondent would have
been placed before the arbitrator at the pre-arbitration hearing by the parties
concerned.”
I am persuaded by the
appellant's submissions that the court a
quo misdirected itself by going beyond what was placed before it to speculate
on what might or might not have been placed before the arbitrator. The parties, as indicated were not in
agreement on this point. The arbitrator
did not allude to the fact that he had before him, either at pre-arbitration or
arbitration level, a record of the incomplete proceedings commenced before the
late Mr Vareta, nor what details, if
any, such record might have contained on the issue. More importantly, whether
and on what basis, it would have been proper for him to rely on such evidence. Clearly,
there was no basis for the court a quo
to make, much less rely, on this particular speculation. Even assuming that the court's speculation
was correct, that the arbitrator must have had before him the details in
question, this did not absolve the court from its obligation to assess the
evidence in question and satisfy itself that the decision of the arbitrator was
justified on such evidence. I find that the court a quo, as an appellate court, abdicated its responsibility in this
respect.
The upshot of all this is
that in the absence of any evidence on this point being led before the
arbitrator, no reliable evidence was placed before the court a quo, nor this court, to support a
finding that the arbitrator properly took into account the respondent's health,
age and qualifications in assessing the period for which the damages concerned
were to be paid. Further to this I find that the appellant is correct in its
assertion that the arbitrator compounded his error by not, additionally, considering
other factors normally taken into account in making assessments of this nature.
Specifically he did not consider whether or not the respondent made any effort
to mitigate his loss, nor the economic environment prevailing in 2002 and the
prospects, if any, that such environment offered in terms of alternative employment.
The arbitrator's approach, which the court a
quo endorsed, is the type that is described as 'wrong' in the following dictum from the case of Redstar Wholesalers v Edmore Mabika SC 52/05 and correctly cited by the appellant;
“The Labour
Court's approach was wrong and its consequent ruling grossly unreasonable. The
court is not entitled to pluck a figure out of a hat because it is of the view
that this figure 'meets the justice of the case'. Instead, the court is
required to hear evidence as to how long it would reasonably take a person in
the position of the dismissed employee to find alternative employment.”
These words apply with
equal force to an arbitrator seized with a similar matter, and are eminently
apposite in casu.
While ordinarily the
remedy would have been for this court to remit the matter to the court a quo for the hearing of evidence on the
factors requisite for a proper assessment of the damages in question, I take the
view that this is not a proper case for such action. Firstly, this dispute has
dragged on for some 15 years and remitting the matter would only lengthen the
delay and frustrate efforts to bring finality to this litigation. Secondly, but
for the respondent's age and health status, this court has before it the
requisite evidence and is in as good a position as any other court to reasonably
assess the damages in question.
The appellant argues
correctly that the respondent, by his own admission, took no effort to secure
alternative employment, but had simply decided to settle into a life of
subsistence farming. He had therefore neglected to discharge the duty, as was incumbent
upon him, to mitigate his loss. The respondent, in my view properly, did not
make the argument that subsistence farming could be viewed as alternative
employment for him. The duty to mitigate one's loss has been emphasised in a
plethora of case authorities. It has a direct bearing
on the assessment of appropriate damages in
lieu of reinstatement. The respondent's failure to make the attempt
accordingly works to his detriment in this respect.
The appellant also
alludes to the economic environment prevailing in 2002 and in my view correctly
asserts that it was more conducive in terms of employment prospects than later
became the case. It is the appellant's submission, therefore, that the
respondent should have been able to secure alternative employment within a
period of three months, had he taken the trouble to look for it.
I find that there is
merit in these submissions. The record shows that the respondent was a fork
lift driver, therefore a skilled worker. This Court takes judicial notice of
the fact that in 2002, the economic meltdown of 2006 – 2009, and it's
devastating effects on employment prospects, wages, salaries and the cost of
living generally, was some four years into the future. The economy was in a much
more robust state than what it descended into post 2006. My view is that it should have been possible
for the respondent, had he been so inclined, to obtain alternative employment
within a much shorter period than that assessed by the arbitrator. It follows that 36 months' salary as a
measure of damages in lieu of damages was not only excessive
given the period in question, it resonated more with the turbulent economic
environment prevailing in the country after 2006. The arbitrator and the Labour
Court appear not to have taken this important dynamic into consideration.
I find, in the final
analysis, and despite the fact that the court is in the dark as to what his age
or health status was, nor how much experience he had garnered during his
employment with the appellant, that the respondent did not prove a case for the
36 months' damages awarded to him by the arbitrator.
I am satisfied on the
basis of the factors considered above that an amount representing 6 months'
salary would have adequately compensated the respondent for the loss of his
employment. I have already determined
that the amount will be calculated on the basis of the salary applicable to the
respondent's grade on the date on which his reinstatement was ordered by the
labour officer, that is, 12 July 2002.
2.2 Appropriate currency denomination
This brings me to the
second issue raised by this appeal, which is whether or not the court a quo erred in upholding an award for back
pay, benefits and damages in favour of the respondent, which was denominated in
US dollars. The appellant argues that no
basis for such an award was established while the respondent contends to the
contrary.
Both
the arbitrator and the court a quo justified
the disputed currency conversion on the fact that any award sounding in
Zimbabwe currency would be a brutum fulmen. The court a
quo states as follows in its judgment:
“It is worth
noting that the basis upon which the arbitrator was asked to make an award
sounding in foreign currency was that if he made an award in Zimbabwe dollars
that would be tantamount to coming up with a brutum fulmen. This in the
court's view was sufficient ground to ask the arbitrator to make an award
sounding in forex as opposed to the Zimbabwe dollar” (my emphasis).
Earlier
in its judgment the court a quo had
correctly cited various authorities that have declared the competency of the
court to make awards sounding in foreign currency, in appropriate circumstances. This would be where the party seeking such relief
has pleaded or made out clearly that he or she is entitled to relief in foreign
currency. The court noted, however that
a number of the cases referred to were on appeal to the Supreme Court. This however did not deter the court in
making the following determination:
“The court is
therefore satisfied that the respondent by raising that argument, did lay
before the arbitrator sufficient grounds upon which the arbitrator had to make
an award sounding in foreign currency.
The court is therefore satisfied that there was no error of law which
the arbitrator fell into in respect of these two grounds of appeal.”
Some
of the cases that the judge cited as pending on appeal in this Court have since
been determined and remitted to the Labour Court for computation and conversion
of various Zimbabwe dollar amounts into US dollars. This Court has ruled that the Labour Court,
as a court of equity, is the only court vested with jurisdiction to perform
this task. Thus, contrary to the court a
quo's sentiments that there was “no error of law” on the part of the
arbitrator in respect of the US dollar denominated award that he made, it is
now settled that the question of which court is vested with authority to make
the appropriate currency conversions, is one of jurisdiction. Not being vested with such jurisdiction, the
arbitrator thus fell into an error of law by seeking to convert the back pay,
benefits and damages awarded to the respondent in casu, from Zimbabwe dollars into US dollars. The arbitrator compounded his error by
settling on a conversion rate whose validity was in doubt.
This Court has, in the
case of Madhatter Mining Company v
Marvellous Tapfuma SC 299/12 put
the matter beyond doubt when it cited s 2A
of the Labour Court Act and emphasised its purpose, which is to advance
social justice and democracy in the work place. It aims to do this by, among
other things, “securing the just, effective and expeditious resolution of
disputes and unfair labour practice”.
The court in Madhatter Mining Company (Supra) then
went on to state as follows:
“The principles of
equity and social justice as well as the imperative for the Labour Court to
secure the just and effective resolution of labour disputes, are all called
into question when it comes to determining the basis and formula for computing a debt (e.g. damages) suffered in Zimbabwe
dollars but claimed in foreign currency.
This is particularly so where such damages, being owed to an employee,
can no longer be paid in Zimbabwe currency realistically or in a way that gives
due value to the employee. The
undeniable fact is that a debt is not wiped out by the mere fact that there has
been a change to the realisable currency.
Equity would demand that a formula be found to give effect to the
employee's entitlement to payment of, and the employer's obligation to pay, the
debt in question.”
I find, on the basis of
this authority, that there is no merit in the appellant's submission that the
respondent, not having 'suffered' the said damages in US dollars, was not
entitled to damages denominated in that currency. Neither am I persuaded that
the respondent's damages were “incapable of calculation,” nor that only nominal
damages were appropriate. I have found that the respondent did suffer loss and
was entitled to damages in lieu of
reinstatement. Failure to award him the damages in a currency that
realistically compensates him for the harm suffered, would in my view undermine
the advancement of equity, social justice and democracy at the workplace.
In casu, the court a quo
simply endorsed the calculations made by the arbitrator, without questioning
his competency to do so under the law.
As the authority cited above makes it clear, this was a misdirection. It
is on this basis that the matter will be remitted to the Labour Court for a
proper computation and conversion to US dollars, of the damages that this Court
has determined are properly due to the respondent. The same applies with
respect to the back-pay and benefits that were awarded to the respondent.
In
the final result, it is ordered as follows:
1.
The appeal succeeds in part.
2.
The matter is remitted to the Labour Court
for a
determination of the question and the
applicable rate of conversion into foreign currency, of the amounts referred to
in paragraph 3(iii), (iv) and (v) below.
3. The
judgment of the Labour Court is set aside and is substituted with the
following:
i)
“The
appeal is allowed with no order as to costs;
ii)
The
Arbitrator's award be and is hereby set aside;
iii)
The
appellant shall pay the respondent back pay and benefits covering the period 2
August 2000 to 12 July 2002, and amounting to Zimbabwe $446,442.00;
iv) The appellant shall pay the respondent 6
months' salary as damages in lieu of
reinstatement, which shall be calculated in Zimbabwe dollars on the basis of
the salary rates obtaining on 12 July 2002;
v) The amounts referred to in
subparagraphs (iii) and (iv) above shall be paid together with interest at the
prescribed rate, from the date of the judgment of this Court to the date of
payment in full, and
vi) The amounts referred to in paragraphs (iii),(iv)
and (v) above, shall be converted to United States dollars in the manner and at
the rate to be determined by this Court in the exercise of its equitable
jurisdiction.”
4. Each party shall bear its own costs.
HLATSHWAYO
JA I agree
CHIWESHE
AJA I
agree
Dube,
Manikai and Hwacha, appellant's legal practitioners
Dondo and Partners, respondent's legal practitioners
