This is an appeal against a judgment of the Labour Court dismissing an appeal
against an award rendered by an arbitrator. That arbitral award quantified the damages payable to
the appellant pursuant to an earlier award ordering his reinstatement into the
service of the respondent.
Background
The respondent is a statutory body established under the
Agricultural and Rural Development Authority Act [Chapter 18:01]. The appellant
was employed by the respondent in January 2008 as its Chief Executive Officer
cum General Manager. On 26 February
2009 he was sent on special leave and on 19 May 2009 he was notified by the
respondent of its decision to terminate his
employment.
The matter was then referred to an arbitrator.
On 26 January 2010, the arbitrator found that the appellant
had been unlawfully dismissed and ordered his reinstatement with effect from the date of his purported dismissal. Thereafter, negotiations
for reinstatement having failed, the matter was again referred to the arbitrator.
On 27 October 2010, the arbitrator quantified his award for
damages in lieu of reinstatement. He
based his award on a monthly salary of US$1,009= in accordance with documentary evidence furnished by the respondent. He then ordered
the respondent to pay
the following amounts:
(i) $19,384= as back-pay and benefits from the date of dismissal
to the date of his first award;
(ii) Cash in lieu of leave;
(iii) $60,540= being sixty months'
salary as damages for loss of employment;
(iv) A further $60,540= being sixty months' salary as
punitive damages for failure to reinstate; and
(v) Interest at the prescribed rate on all of these amounts.
The appellant, being
dissatisfied with the arbitrator's award,
appealed to the Labour Court on several grounds
pertaining to the question of his reinstatement, the date of termination of his
employment, his correct monthly salary, and his entitlement to contractual
benefits.
The respondent, in turn, cross-appealed, defending the
propriety of its decision not to reinstate the appellant, and challenged the
arbitrator's award of punitive damages and his failure to deduct certain
amounts allegedly owed by the appellant to the respondent.
Decision Appealed
The court a quo dismissed the appeal and partially allowed
the cross appeal for the
following reasons.
It found, having regard to
the relevant correspondence, that the possibility of reinstatement was not part
of the arbitrator's mandate. The effective date of termination of employment
was 4 February 2010, when the respondent opted to pay damages, and not when the
Labour Court ruled against the appellant's reinstatement. The court also found
that the arbitrator's reliance on a monthly salary of $1,009= was based on
irrefutable evidence and more in accordance with reason, as compared with the
figure of
$5,000= claimed by the appellant. As regards the
appellant's claim for contractual benefits, no documentary or other evidence
was placed before the arbitrator to substantiate that claim. Again, his claim
for punitive damages was neither placed before the arbitrator nor substantiated
by any supporting evidence. Similarly, the respondent's claim to deduct certain
amounts owed by the appellant was not raised before the arbitrator.
In the event, the court a quo dismissed the appeal and allowed the cross-appeal to the extent of
setting aside the arbitrator's award of punitive damages.
The issues raised
in the notice of appeal
herein are largely
identical to those before the Labour Court and may be
summarized as follows:
(i) Whether the question
of reinstatement was an issue before the arbitrator, in addition
to the quantification of damages in lieu thereof.
(ii) What was the effective date of termination of
employment? (This issue was not pursued by counsel for the appellant and
appears to have been abandoned).
(iii) What was
the correct amount of the appellant's monthly
salary?
(iv) Was the appellant entitled to his claim for
contractual benefits?
(v) Whether the claim for punitive damages was properly
before the arbitrator and correctly awarded by
him.
Reinstatement
and Quantification of Damages
At the hearing
of this matter,
counsel for the appellant largely
focused his argument on the question of reinstatement. He submits that
damages are only payable if reinstatement is not tenable. This is not a matter
for the employer's election but, as envisaged
in sections 89(2)(c)
and 97(2) of the Labour
Act [Chapter 28:01],
a matter of fact to be alleged and proved by the employer.
There must first be an inquiry as to whether reinstatement is no longer
tenable and the employee remains
employed until that inquiry is finalized. Despite the appellant's submissions on this point, the arbitrator proceeded
on the basis that he was only
dealing with quantification. Similarly, although this was raised before the
court a quo, it misdirected itself in not upholding this ground of appeal. The
matter should therefore be remitted to that court to determine this question.
Counsel for the respondent submits that section 89(2)(c) of the Labour Act [Chapter 28:01] does not give the Labour Court the power to order reinstatement without
damages. The same applies
to an arbitrator by virtue of section 98(9) of
the Labour Act [Chapter 28:01]. The alternative of damages in lieu of reinstatement must be stipulated. This codifies the common law position enunciated in Hama v National
Railways of Zimbabwe 1996 (1) ZLR 664 (S).
For the purposes of this case, it only becomes necessary to
consider and interpret the provisions of the Labour Act [Chapter 28:01] adverted to by counsel if it is
found that the question of reinstatement was properly and squarely before the
arbitrator in the first instance. If it was
not, there would be little point in embarking on an abstract and academic
exercise of no present significance.
In addressing
this aspect, it is necessary to consider the relevant correspondence between
the parties' legal practitioners….,.
There is a
further and more important aspect of this case that must be considered in relation to the events preceding the second arbitration.
On 14 July 2010, both
parties received the arbitrator's notification to attend arbitration proceedings in “the matter concerning quantification of
damages in lieu of reinstatement.” On the date scheduled for the hearing,
i.e. 21 July 2010, the appellant's
legal practitioners wrote to the arbitrator seeking a postponement of the hearing
because the lawyer handling the matter was engaged
in a
continuing trial. The arbitrator proceeded
to hold a pre-arbitration hearing
on the same date and issued an interim order setting out the timelines
for the filing of submissions by the parties and a fresh date for the hearing
of the matter. Paragraph 1 of this Order explicitly stated that “the Claimant shall file his submissions on
quantification of damages in lieu of
reinstatement with the Arbitrator…,.” Subsequently, the arbitrator issued a
further notification to the parties to attend arbitration proceedings on 26
August 2010, again in “the matter
concerning quantification of damages in lieu of reinstatement.”
As is evident ex facie
the interim order, the pre-arbitration hearing was attended by the claimant
(the appellant) in person and by the respondent's counsel and instructing legal
practitioner. The written order itself appears to have been acknowledged as
having been received by both parties on 23 July 2010. It is abundantly clear
from all of the foregoing that the appellant and his legal practitioners were
fully aware of the purpose of the arbitration proceedings in question and the
sole issue for determination by the arbitrator, i.e. the quantification of damages in lieu of reinstatement. Despite that awareness, they did nothing to
disabuse the arbitrator or the respondent of the notion that this was the sole
issue for determination. Nor did they take any steps to have the interim order
revised to incorporate the question of reinstatement.
In these circumstances,
the arbitrator cannot be faulted for having disregarded that question in the
proceedings before him and in the terms of the award that he rendered. By the
same token, the court a quo cannot be found to have misdirected
itself in holding that the arbitrator did not err in confining himself to the
issue of quantification of damages and that he had no mandate to consider
whether or not reinstatement was still possible.
In the premises, I find that the question of reinstatement
was not an issue before the arbitrator in addition to the quantification of damages in lieu thereof. In the light of this finding…, it becomes
unnecessary to address the larger question as to whether the viability of
reinstatement must first be determined before proceeding to consider the
alternative of damages.
In any event, it follows
that the first ground of appeal cannot be sustained and must accordingly fail.
Correct Monthly Salary
and Contractual Benefits
In his submissions before the arbitrator and the court a
quo, the appellant's position was
that his salary before the termination of his employment was in the region of
US$5,000= per month. Both the arbitrator and the court rejected this position and adopted
the figure of US$1,009.= as the basic monthly salary, having regard to the
documentary evidence adduced by the respondent.
At the hearing of this appeal, counsel for the appellant
did not, quite correctly in my view, pursue
the grossly inflated
figure initially contended for by the appellant. Instead,
he submitted that the figure that should have been used in assessing
damages is not the basic salary of US$1,009= but the net salary of US$1,032=54
as appears from the monthly computation presented by the respondent.
Counsel for the respondent did not challenge this position and I see no basis for disallowing
the amount of US$1,032=54 as the net monthly salary for the purpose of
calculating the terminal payments due to the
appellant.
Insofar as concerns the contractual benefits payable to the
appellant, these appear from his letter of appointment, dated 7 November 2007,
enumerating the multifarious allowances and benefits offered to him as part of
his total remuneration package. Counsel for the appellant, in his submissions,
confined himself to the housing allowance, being 20% of basic monthly salary,
and professional and club membership allowance, being 2% of annual salary.
Having regard to the amounts reflected in the monthly
computation that I have alluded to above, it is clear that the housing
allowance of 20% was already factored into the appellant's pay structure in
arriving at his net monthly salary. However, the professional and club
membership allowance was omitted and must obviously be incorporated in
calculating the contractual benefits due to the appellant.
In the premises, I find that the sums payable to the
appellant (in respect of back-pay and benefits, cash in lieu of leave, and damages for loss of
employment) as quantified by the arbitrator and endorsed by the Labour Court, are to be re-calculated on the
basis of a monthly salary of US$1,032=54 (as opposed to US$1,009=) and with the
addition of 2% of annual salary for the professional and club membership allowance….,.
Disposition
In the result, the appeal succeeds to the very limited
extent that I have indicated in relation to the monthly salary and contractual
benefits that are due to the appellant. Consequently, the correct net monthly
salary of US$1.032=54 (instead of US$1,009=) and an additional 2% of the basic
annual salary for professional and club membership allowance (i.e. 2% of US$1,009= X 12) are to be
applied in recalculating the amounts payable to the appellant in respect of
backpay and benefits, cash in lieu of
leave and damages for loss of employment.
I should add that the resultant adjustments are
considerably smaller than would have been the case had the appellant succeeded
in his wholly insupportable claim to peg his salary in the region of US$5.000=
per month.
In all other respects, which constitute the bulk of the
issues before this Court, the appeal cannot be sustained and must therefore be
dismissed. Given the virtually
inconsequential extent of the success
enjoyed by the appellant, it seems appropriate that he should bear
the costs of this appeal.
It is accordingly ordered
that:
1. The appeal is partially allowed as regards the salary
and allowance figures to be applied in calculating the amounts payable by the
respondent to the appellant.
2.
The appeal be and is hereby dismissed in all other respects.
3. The appellant shall pay the costs of this appeal.
