It never ceases to amaze how parties to an agreement happily append their signatures
to an agreement then a few months later fail to agree on the interpretation of
their written word and require some other person, in this instance the court,
which was not part of the negotiations, to tell them what they meant.
This is an appeal against the whole judgment of the Labour
Court which was granted on 14 February 2014.
The facts giving rise to the dispute between the parties are mainly common
cause and may be summarized as follows.
The appellant is the Employers Association for the banking
industries. The respondent is the Union which represents the workers for the
banking industry. Following protracted negotiation, they signed an agreement on
10 June 2011. This was later reduced into a Collective Bargaining Agreement
which was subsequently published as Statutory Instrument, S.I.150 of 2013.
However, when the parties tried to implement the Collective Bargaining
Agreement a dispute arose on its interpretation. A certificate of no settlement
was duly issued and the matter was referred to arbitration. It was the contention of the Employers Association
that the workers would be awarded a salary increment which would be in line
with the inflation figures for that year in order to stop any further disputes.
On the other hand, the workers union was of the view that the inflation figure
would form the basis of any future negotiations that they would have with the employer.
After hearing submissions from both parties, the arbitrator
found in favour of the workers union and made the following award:
“1. The parties, i.e. Zibawu and Beaz, are hereby ordered
that clause 6 of the July 2010 to December 2011 Collective Bargaining Agreement
means that the year on year inflation figure for every Collective Bargaining
Cycle was to be used as the starting point in negotiating salary increases in
each and every Collective Bargaining Cycle.
2. The parties
are further ordered that the appropriate percentage is 10 per cent which should
be used to adjust the salaries for the period 1 January 2012 to 31 December 2012.”
The appellant, aggrieved by the award, appealed to the
Labour Court which dismissed the appeal. It also ordered that each party bear
its own costs.
The appellant, still dissatisfied, has approached this
Court on the following grounds of appeal:
“1. The court a
quo erred and misdirected itself in
law in failing to find that the arbitrator acted ultra vires the agreed Terms of Reference between
the parties, to wit, the determination of a costs of Living Adjustment for the
period January 2012 to December 2012.
2. The court a quo erred
in law in failing to find that in the context of Clause 6 of the Collective
Bargaining Agreement, the parties had agreed to effect future salary reviews
based on verifiable inflation figures from the agreed sources.
3. The court a
quo erred and grossly misdirected
itself on the facts and in law in confirming a salary increase of 10 per cent
when there was no factual and/or legal basis to justify such an increase.”
An examination of the wording of the Statutory Instrument,
in my view, seems to indicate that the
parties were intent upon removing any uncertainty when determining future
salary increments. It is apparent
that the parties, in setting out what should be taken into account in
determining the inflation figure were agreed that the best way to resolve the
dispute was to come up with a scientific formula upon which they would, in
future, implement salary reviews for workers in the banking sector.
At the hearing, it was apparent that the parties were of
the view that the main bone of contention was the interpretation of clause 6 of
the Collective Bargaining Agreement. In particular, they were of the view that
it was necessary to interpret the meaning of the word “base” in clause 6 of the Agreement.
In interpreting this clause, the court a quo agreed with the award made by the
arbitrator. The court was of the view that the Agreement entailed the
application of a value judgment which meant that the parties would start
negotiations from the inflation figure. At page 2 of the judgment, the court a
quo stated as follows:
“I consider that the word 'base' was used advisedly. It
contemplated a foundation or starting point. It
was not the structure or end point. It
was to be used for salary reviews. In other words, the arbitrator in
casu was not obliged to set
increments tallying with the inflation figure. He would naturally consider it
as a baseline. I therefore find that he did not stray beyond his mandate…,.”
I respectfully disagree with the interpretation of the
court a quo.
In my view, the Court fell into the error of interpreting
one of the provisions of the Agreement without taking into account the other
provisions of the Collective Bargaining Agreement. In order to give a proper interpretation to the intention of the
parties, it was incumbent upon the court to examine the whole Agreement and not
just to rely on a single word. It is
necessary to set out the relevant provisions in full;
“3. With effect from first January, 2011 going forward, the
NEC has agreed to combine the basic salary, housing and transport allowances to
come up with a basic salary. For the avoidance of doubt, there will be no
separate negotiations for housing and transport allowances going forward.
4….,.
5. With effect from first January, 2012, the negotiating
cycle shall be January to December.
6. Furthermore, the parties have agreed to base salary
reviews on year-on-year inflation figures prevailing at the relevant time and
the sources of the inflation figures shall be the Ministry of Finance and
Economic Development, Central Statistical Office, and IMF.
7. The parties agree that this agreement resolves the
dispute in respect of July, 2010 to June 2011 salary negotiations currently
pending in the Labour Court and represents a full and final settlement of the
said dispute.
8. Parties have agreed to withdraw all pending disputes
related to salary reviews involving individual employers and their worker
representatives as well as ZIBAWU and BEAZ which may be at various levels of
dispute resolution mechanisms such as Works Councils, the Ministry of Public
Service, Labour and Social Welfare, arbitrators, and the Labour Court. This
clause relates to cases as from July, 2010 to
date.
9. Parties agree
that the issue of actual(s) will be dealt with by individual institutions.”
It was common cause that at the relevant time the inflation
figure, taking into account the factors set out in paragraph 6 of the
Collective Bargaining Agreement, was 4.9 per cent. In accordance with paragraph
8 of the Collective Bargaining Agreement, the parties decided to withdraw all
cases that were pending from the year 2010. Paragraph 5 of the Collective
Bargaining Agreement stated that it would be inclusive of the period to be
covered which was an eighteen month period.
The decision to award a 10 per cent salary review
completely defeats the intention of the parties in coming up with a formula to
implement future salary increments. It seems to me that if the parties had intended
to introduce other factors in determining future salary reviews they would have
said so in no uncertain terms. The fact that they agreed on a unitary yardstick
to determine future salary reviews means that they had no intention of
introducing other factors which would introduce uncertainty in the
determination of their salary reviews.
Clearly, in my view, the inflation figure was to be used
during the agreed period to effect all salary
increments.
I am fortified by the views expressed in the case of
Sagittarian (Pvt) Ltd v Workers Committee, Sagittarian (Pvt) Ltd 2006 (1) ZLR 115…, where GWAUNZA JA
relied upon the case of Director of Education (Transvaal) v McCageie & Ors 1918
AD 616 where INNES CJ stated that;
“Where general words have a wide meaning, their
interpretation must be affected by what precedes them; general words following
and connected with specific words are more restricted in their operation than
if they stood alone…,. They are coloured by their context and their meaning is
cut down so as to comprehend only things of the same kind as those designated
by specific words - unless there is something to show that a wider sense was intended.”
It seems, having regard to the wording of the Collective Bargaining
Agreement, that an interpretation which would include other factors such as
cost of living, the prevailing wage, and the take home pay would be doing
violence to the ordinary grammatical meaning of the word “base” and would be
clearly out of context with the other provisions of the Agreement. The
Collective Bargaining Agreement was meant to put an end to all future
negotiations as salary increments would be certain.
The award of a salary increment of 10 per cent, which was
granted by the arbitrator, and confirmed by the Labour Court, was not
substantiated. The appellant had offered 4.9 per cent salary increase and the
respondent was claiming 23.5 per cent. The 10 per cent award appears to have
been a thumb suck between the two conflicting amounts.
In my view, the award was
clearly ultra vires the terms of the
Collective Bargaining Agreement.
A proper reading of paragraph 9 of the Collective
Bargaining Agreement – namely, that the parties were agreed that the actual Banks
could award a salary increment which was higher than the 10 per cent agreed to
in the Agreement - suggests that it was meant to cater for institutions which
were performing better than the others financially and were thus in a position
to pay a salary increment which would be higher than the one agreed to by the
ZIBAWU and BEAZ.
In my view, a higher rate could not be said to be binding
on the two organizations as they had negotiated the minimum rate applicable to
all institutions that fall under them.
In view of the poor performance of the economy and the
rampant company closures due to high operating costs, the umbrella bodies had
negotiated a minimum amount which would be paid by all institutions without
straining their business operations. It was therefore the obligation of workers
who had evidence that their institutions were performing better than the others
to then negotiate with their employers for a salary increment which was higher
than the basic inflation rate. Such amounts could not be said to be binding on
the parties before me which were bound by the terms of the Collective
Bargaining Agreement.
Accordingly, I find that there is merit in the appeal. In my view,
the appellant has been successful and there is no basis upon which it should
not be awarded its costs both before this Court and the court a quo.
In the result, I make the following order:
1. The appeal is upheld with costs.
2. The judgment of the court a quo is hereby set aside and substituted with the following:
“(i) The appeal
is allowed with costs.
(ii) The Arbitral Award by Arbitrator P. Shawatu,
dated 5 July 2012, is hereby set aside.”
