In or about December 2010,
the Chief Executive of the appellant was looking for an “international GM at Rainbow Towers Hotel”. She was eager to have
a “passionate hotelier of [the respondent's] stature to
run this place”. She emailed to enquire as to whether the respondent was
interested or whether he could recommend someone.
The respondent was interested. Besides, he responded via email:
“The family, as you know, is keen to move to Zim or to the Region.
Despite the opportunity costs associated with my move out of the US, family
values have to take precedence.”…,.
Matters moved quickly,
and, on 7 December 2010,
the appellant, through
its Human Resources Manager,
addressed a letter of employment to the respondent. It read:
“Dear
Richard
RE: APPOINTMENT TO THE
POSITION OF GENERAL MANAGER, RAINBOW TOWERS HOTEL & CONFERENCE CENTRE
Following discussions held with you, this letter serves to
appoint you to the position of General Manager for Rainbow Hotel and Conference
Centre, a unit of Rainbow Tourism Group.
1. EFFECTIVE DATE
Your appointment is effective 1 January 2011.
2. REMUNERATION
See attached schedule.
3. JOB GRADE
This position is Hay (sic) Executive level 3.
4. REPORTING
This position reports to the Chief Executive of Rainbow
Tourism Group.
5. PROBATION
You will initially be employed on a three months
probationary period ending 30 March 2011.
6. EXECUTIVE EMPLOYMENT
CONTRACT
Following successful completion of your probation period
you will be on a five (5) year Executive Employment contract which shall be
negotiated with yourself along the guidelines of the Employment Conditions laid
down in the RTG Executive employment Contracts.
7. ANNUAL LEAVE
Leave will be granted at a rate of 30 days per annum
effective only if you have been with the company for 12 months. Leave will not
be granted during our busy periods and cash in lieu of leave is normally not
permitted. All employees are required to go on leave annually.
8. All employees enjoy a free 24 hours accident insurance cover.
9. During your contract with Rainbow Tourism Group, you
will not take any gainful employment with any other organization. Full and
total written disclosure of any business that you
may be involved in is required before commencement of service.
10. All the conditions of service and code of conduct are
available in booklet form and will be given to you on commencement date.
11. Termination
of contract after successful completion of probation will be three months'
notice on either side.”
The respondent duly commenced employment with the appellant
in terms of the letter.
It is common cause that
the five year Executive Employment contract referred to in Clause 6 of the
letter of employment was never negotiated.
By operation of law, therefore, the respondent, upon the expiry of the
probationary period on 30 March 2011, became an employee on a contract without
limit of time. See section 12(3) of the Labour
Act [Chapter 28:01].
Cracks in the employment relationship began to surface in
about December 2011.
The respondent's unit had been audited for the period June
2011 to October 2011 and received an adverse report citing 'violation of the
provisions of the (appellant's) Motor Vehicle Loan Scheme and seemingly
excessive entertainment expenses by management
team.'
When asked to respond to certain specific findings in the
report, the respondent had avoided a direct response, and, instead, alluded to
his conditions of service which he complained had not been met. He also made specific reference to 'the vehicle scheme and the grossing up of [his] salary relative to the monthly
repayment dollar'; a benefit allegedly enjoyed by his colleagues, and, in his
case, the absence of a housing allowance, 'a
benefit that is prevalent to the generality of the Group.'…,.
This led the Chief Executive to respond by email:
“I am worried that I am not on the same
wavelength with you. Breach
of Company Policy is a serious matter
that even touches on your values as the leader in Towers. No amount of
explanation can justify, especially if these matters have been covered by an audit.
If you have issues with company policy and your conditions
of service, these have to [be] brought out clearly and addressed not as a
result of an audit. We cannot have a situation where grievances are now being
brought out due to audit. May I also state that no one, including myself, is
above the law. When auditors report on their findings, unfortunately, they
cannot separate matters in terms of seniority. My answer to your name having
been brought up is that this is what Corporate Governance calls for and
unfortunately no one can be spared. So, the main issue for me is that just
ensure full compliance. I will ensure that I document this issue properly to
you to avoid doubt.
In as much as I appreciate your good efforts to bring
stability into Rainbow Towers, I cannot be seen condoning non-compliance.”
By letter, the Chief Executive Officer further stated:
“The internal audit
report indicated violation
of the provisions of the Motor Vehicle Loan Scheme and
seemingly excessive entertainment expenses by management team. In your response
to the audit issues, you indicated that both the fuel and the entertainment
expenses were for business.
Kindly account for all the business that was facilitated by
both the fuel and entertainment expenses. May I request that this report be
available at my office latest by
Tuesday 13 December 2011.”
The requested report was placed before the Acting Chief
Executive, Mr Changunda, (“Changunda”) who, on 19 December 2011, requested
the respondent:
“To itemize
the business that was facilitated by the fuel that you allocated
to both your management team and yourself. As you are aware, the motor vehicle
loan scheme has no provision for fuel allocation to beneficiaries. Again, for
entertainment account, please report on the expenses incurred and business that
was facilitated by the activity.”
The respondent was required to reply by 23 December 2011.
He did so on 27 December 2011.
Mr Changunda wrote to him on 13 January 2012 expressing his
expectation that the respondent would “study
and understand
company policy and ensure
strict adherence of policy provisions in your unit.” He indicated the company's
willingness to assist the respondent in facilitating operational efficiencies
in order to improve the image of Rainbow Towers.
On 10 April 2012, the respondent was advised of a salary
adjustment “for non-NEC category, including for Executive positions, effective
from 1st April 2012.” His performance rating for the year 2011 was a D category
and he was awarded a 5% salary increase.
On 22 August 2012, Mr Changunda wrote to the respondent in
the following terms:
“Dear
Richard
YEAR TO DATE
RAINBOW TOWERS HOTEL & CONFERENCE CENTRE PERFORMANCE
I write to register my concern
with your unit performance. As at July 2012, four key performance indices
(revenue, profitability, return on sales and cash credit ration) are below
budget, a situation the company cannot sustain.
I have summarized, for your reference, year-to-date
performance for your unit (copy attached). The negative position is not
sustainable and you are required to turnaround this business.
As a way forward, I expect you to meet August 2012 forecast
of USD962,531= revenue and a profitability of USD31,261=. Further, I am giving
you two months, being September and October to achieve the forecast figures.
The figures are shown below;
(i) September
2012 - revenue of $942,558= and a PBT of $16,175=.
(ii) October 2012
- revenue of $904,040=, which must result in a break-even position.
I will review and discuss your unit performance on a
monthly basis (August to October). If this communication is not clear please
feel very free to discuss my expectations of your performance with me.
Thank you
P Changunda
ACTING CHIEF EXECUTIVE.”
On the same date, Mr Changunda wrote another letter. This
time it related to the respondent's second quarter of 2012 (Q2 2012) performance
review. It read, in part:
“You are
aware that we have not concluded review of your April to June performance. Ideally this review was due
by mid-July 2012. Management has concluded the Q2 report and presented it to
the HR Board Committee.
I had no choice but to record a zero for you for Q2 because
we have not finalized as I have referred it back to you a number of times and
to date not finalized. At your level as General Manager, I expect you to be
competent to handle performance reviews.
Going forward, I expect your Q2 review, which will be due
by mid-October 2012, to be handed in on time. I expect it to be done properly
so that I do not have to refer it back. If you are facing challenges with the
performance review systems seek assistance from Human Resources Department or
the consultant that the Group worked with during the course of the year.”
On 22 November 2012, the appellant, through its Human
Resources Director, wrote to the
respondent in the following terms:
“Dear Richard
NOTICE OF TRANSFER
As you are aware, the company is struggling with Rainbow Towers Hotel performance. Indices indicate that the
unit performance is getting worse. For your reference find attached the unit
cash analysis report indicating that year to date, the net cash adequacy has
trebled to US$1.1m negative, rendering this business technically insolvent.
The company is convinced this situation may be turned around to profitability.
With this background, it is management's view that you are
assigned to a unit without operational problems and acclimatize you to the RTG
culture and the Zimbabwean hospitality industry in general.
The company intends to transfer you to A'Zambezi River
Lodge, Victoria Falls at the same level and remuneration of Hotel General
Manager. It is the intention of the Group
to expose you to a resort hotel operation. In addition, in Victoria Falls, the Group
has a Resident Manager for Victoria Falls Rainbow Hotel who is on skills
development to a hotel General Manager who needs assistance from an experienced
General Manager,(sic) a role the company believes you will be able to execute.
Kindly let me have your views by noon on Friday 23 November 2012.”…,.
On 23 November 2012, the appellant received a letter from
the respondent's legal practitioners. It was therein alleged that the
respondent's employment contract specifically appointed him to the position of
General Manager, Rainbow Towers Hotel and Conference Centre
and that no provision was made therein
for transfer within
the Group. In addition, the appellant, so it was alleged, was aware that
the respondent's wife required specialist medical care and facilities which are
not available in Victoria Falls.
It was advised that the respondent could not accept the transfer.
On 27 November 2012, the appellant's Human Resources Director
responded pointing out that while note was taken of the respondent's family
circumstances, the appellant's assessment of the business was such that there
was need for the transfer and that the respondent would be required to transfer
on 1 January 2013. Reference was made to his conditions of employment which it
was alleged were contained in the booklet referred to in clause 10 of the
employment contract set out above. He was to use the remainder of his working
days in November to do a 'handover take over' with the Operations Manager and
he needed not report for duty in December.
On 28 November 2012, a further letter was written to the
respondent by the appellant. In that
letter, the Human Resources Manager referred to 'follow up discussions' with
the respondent and confirmed the terms of the transfer. The respondent was
advised of the availability, at Victoria Falls, of a residence for him and a 'disturbance
allowance' to be paid to him 'through the January pay run.'
Thereafter, on 29 November 2012, a circular to 'all
Associates' advised of the pending transfers of the respondent to A'Zambezi
Victoria Falls, as General Manager, and Tichawona Shumba from A'Zambezi to
General Manager - ICC both effective 1 January
2013.
On 30 November 2012, the respondent, through his legal
practitioners, lodged a claim of constructive dismissal with the Labour
Officer.
The letter was not copied to the appellant.
The respondent did not report for duty on 1 January 2013.
On 15 January 2013, the respondent's legal practitioners
wrote to the appellant's legal practitioners as follows:
“Re: RICHARD NKOMO
RAINBOW TOURISM GROUP
We confirm that subsequent to the reference to arbitration
this morning, the disciplinary hearing
scheduled for this afternoon has been rescheduled to Friday the 18th
January at 11.15a.m. We await the requested documents.”…,.
However, on 30 January 2013, when the notice of the
disciplinary hearing was served on the respondent's legal practitioners, the
latter wrote to the appellant's legal practitioners:
“…,. Your client subsequently delivered a Notice of Hearing to ours. Our client ceased to be
an employee of yours when he was constructively dismissed by yours, and
accordingly cannot be dismissed by yours…,.”
The disciplinary hearing was held by the appellant on 1
February 2013. The charge was:
Absence from work for 5 or more consecutive days in that
the respondent had failed to report for duty on 1 January 2013.
The respondent did not attend the hearing but was advised
by the Designated Officer, in a letter dated 5 February 2013, that he had been
found guilty of misconduct and was invited to tender his 'submissions and
evidence for purposes of mitigation' by Friday February 15, 2013.
The arbitration referred to above took place on 12 March
2013. The arbitrator ordered:
“That the
claim of constructive dismissal
be upheld and the respondent is ordered to reinstate the claimant.”
An appeal by the appellant to the Labour Court was dismissed.
THE ISSUES
ON APPEAL
As was submitted on behalf of the respondent, the nub of
the dispute was whether or not the court a quo was correct in finding that the respondent terminated his
employment with the appellant as a result of the latter wrongfully making
continued employment intolerable for him. If the answer to this enquiry is in
the positive, then the termination falls within the provisions of section
12B(3) of the Labour Act [Chapter 28:01] and the respondent was unfairly
dismissed.
Section 12B(3) of the Labour Act [Chapter 28:01] provides:
“(3) An employee is
deemed to have been unfairly dismissed –
(a) If the employee terminated the contract of employment
with or without notice because the employer deliberately made continued
employment intolerable for the employee;”
I propose to divide the enquiry into two parts, namely,:-
(i) Whether the appellant's conduct was such that it
deliberately made employment intolerable for the respondent; and
(ii) Whether the respondent terminated his employment with
the appellant because of such conduct.
WHETHER THE
APPELLANT'S CONDUCT WAS SUCH THAT IT
DELIBERATELY MADE EMPLOYMENT INTOLERABLE FOR THE RESPONDENT;
The stance taken by the appellant was that the respondent
was its employee up to the end of
January 2013. This is evidenced by his conduct in attending at work during
November to do the handover takeover exercise as instructed by the appellant,
the receipt of his salary and allowances, including cellphone allowances, up to
the end of January 2013, the request, as late as 15 January 2013, for documents
required to prepare for the disciplinary hearing, and the fact that at no stage
had the respondent tendered his resignation from employment. Therefore, so it
was submitted, by not reporting for duty on the 1st January 2013 the employee
committed the misconduct charged and the disciplinary committee had correctly
found him guilty as charged.
It was also submitted, on
behalf of the appellant, that the respondent, like all other Executive
employees, was bound by the transferability clause in the Code of Conduct
governing the appellant and its employees.
On behalf of the respondent, however, it was contended that
because the appellant had not given to him the booklet mentioned in clause 10
of the agreement…., an omission which was contrary to the peremptory provisions
of section 12(2)(d) of the Labour Act [Chapter 28:01], he was not bound by its
terms and was not transferable. Accordingly, by transferring him to Victoria
Falls, in breach of the terms of his contract of employment (which terms he
alleged were contained in the letter of employment)…, the appellant had made
continued employment with it intolerable.
The letter of transfer explained, in clear terms, why the
respondent was being transferred. The correspondence set out above clearly
showed that the respondent was not performing up to standard and that under his
watch the hotel had reached a state of near insolvency. This state of affairs
covered a period of two years after the appellant was hired to 'turn around'
the fortunes of the hotel. In these circumstances, I venture to suggest that an
employer would be within its rights to terminate the employment contract on
notice if so minded.
However, the appellant did not adopt that course.
The transfer was a lateral one to the A'Zambezi River Lodge
which is in the tourism hub of Victoria Falls and which was encountering no
operational problems. That posting, the appellant explained, would allow the
respondent both to acquaint himself with the Zimbabwe hospitality industry and
to share his expertise with the manager of the Rainbow Hotel, Victoria Falls.
There was no reduction of benefits.
What then about the transfer would make the respondent's
continued employment intolerable?
From the arguments presented by the respondent, the
following are his objections to the transfer;
(i) First, he was not transferable as he was employed to
the specific post of General Manager of the Rainbow Towers. That amounted to a
stipulation that he was to work there and nowhere else in keeping with the
principles set out in Guruva v Traffic Safety Council of Zimbabwe 2009 (1) ZLR
58…,.
(ii) Secondly, his wife is an invalid and is in need of
specialist medical care which is only available in Harare and the appellant was
aware of that fact.
Accordingly, the transfer made his continued employment
with the appellant intolerable.
Regarding the first objection, in view of the finding above
as to the nature of the contract between the parties, namely, a contract
without limit of time, I consider that the respondent was bound by the general
rules of transferability in the organization. Since no further contract was
negotiated, there cannot be read into that contract, an appointment to a
specific post, for a specific period and at a specific place only.
The following words by CHEDA JA in Guruva v Traffic Safety
Council of Zimbabwe 2009 (1) ZLR 58 are applicable here:
“It must
be accepted that the right to transfer an employee
from one place to another is
the prerogative of the employer. It is the employer who knows better where the
services of an employee are required. The employer's discretion in determining
which employee should be transferred and to which point of the employer's
operations is not to be readily interfered with except for good cause shown. Good
cause in the circumstances, while not easy to define, would include such
matters as unfounded allegations, victimization of the employee, and any
disadvantage. The reasons for transferring the appellant were given in its very
first correspondence. It is not as if the reasons were made to counter the
appellant's objections. Even if the reasons had not been given in the first
correspondence to him, the reasons would still be valid as long as they are
genuine.
The employee who undertakes to work for an employer whose
business is carried out at different places takes the risk of being sent to
perform services for the employer wherever such services are required, unless
the employment contract stipulates that he is to be employed and remain at a
specific place only. See Ngema & Anor v Minister of Justice, Kwazulu &
Anor 1992 (4) SA 349 (N).
While the respondent may have erred in not giving the
appellant a hearing in the very first place, I am satisfied that, since the
respondent did not compel the appellant to go on transfer before he was heard,
but deliberated on the issue before re-affirming its previous decision, the
requirement of the audi alteram partem rule was complied with.”
The respondent was the General Manager of the Rainbow
Towers and it seems childish to submit, as he did, that he was ignorant of the
Code because it was not given to him. In his
position, he would have been responsible for drawing the attention of subordinate employees to the Code of Conduct.
It would be an affront to intelligence to say that he remained, and was content
to remain, blissfully unaware of its contents throughout the period of his
employment with the appellant - which spanned two years. The same would, in my
opinion, apply to any Code applicable to Executives if that were applicable to
the respondent.
Accordingly, the respondent cannot take refuge in the
defence raised to the effect that: 'I am not bound by it because I did not see
it because you did not give it to me.'
As to the second objection, there is nothing in the record,
either of the respondent's recruitment or in his employment with the appellant,
to suggest that the respondent's wife was an invalid, and, still less, that the
appellant was aware of it.
When the respondent accepted the offer to take up the
position offered by the appellant, he made mention of the opportunity costs
which could arise on his leaving the United States. No mention was made of the
availability or otherwise of medical and/or specialist facilities for his wife.
His later complaint, regarding his conditions of service, did not include his
wife or her needs. I mention these apparently trifling details because of a
fruitless search of the record for any suggestion that the appellant might have
been aware of the alleged medical condition of the respondent's wife. The only
reference to the illness of the respondent's wife was made before the
arbitrator where the respondent indicated that a former Director of 'the
Sheraton' was aware of his wife's illness.
In any event, unless his contract specifically provided (which
it did not) for his employment in Harare and no other location (see Guruva v
Traffic Safety Council of Zimbabwe 2009 (1) ZLR 58) because of his wife's
medical condition, that condition could not restrict
the appellant in the exercise
of its right to transfer
the respondent as it deemed fit.
The respondent, as an employee, was bound by the
transferability clause in the appellant's Code of Conduct. Any difficulties
which he had with the transfer should have been discussed with the appellant
when he was given an opportunity to do so. Instead, when asked for his views,
he chose not to discuss the matter personally with his employers but through
legal practitioners who indicated that he could not accept the transfer and
directed that all future correspondence should be with themselves.
I therefore agree with the submission by the
appellant that the respondent did not discharge the onus on him to establish
that the appellant's conduct was such that it made the respondent's employment
with the appellant intolerable. 