Home » General » Is Termination On Notice Fair? [column]

There has been a lot of talk within the Zimbabwean labour market that several companies have abandoned formal retrenchment procedures, opting instead to simply terminate the contracts on notice despite such actions being challenged at the Supreme Court.

According to last Thursday’s edition of The Herald, a Senior Court reporter stated that employers are taking a cue from a contested Labour Court Judgement delivered against two Zuva Petroleum managers in 2014 which gave the company the nod to terminate the two employees’ contracts without any disciplinary hearing or the involvement of a retrenchment authority.

The two employees appealed to the Supreme Court challenging both the ruling of the provisions of the Labour Act which the learned Judge Maxwell of the Labour Court relied on in delivering his judgement. This matter was heard by the Supreme Court three months ago but the judgement was reserved.

This article shall attempt to give a background with particular regards to termination on notice, look at legal developments that took place concerning termination on notice between 1985 and 2002, and share the amendments to the Labour Act Chapter 28:01 introduced a new section on Unfair Dismissal.

The writer will also give an overview and analysis of the Labour Court’s decision on Zuva Petroleum (Pvt) Ltd v Don Nyamande and Another LC H 19514 which is awaiting the ruling of the Supreme Court.

In 1985, the dismissal of employees was regulated by the Labour Relations (General Conditions of Employment) (Termination of Employment) Regulations 1985 (Statutory Instrument (SI) 3711985).

These regulations were repealed and substituted by the Labour Relations (General Conditions of Employment) (Termination of Employment) Regulations SI 130 of 2003 which were subsequently repealed and substituted on 27 January 2006 by the Labour (National Employment Code of Conduct) Regulations SI 15 of 2006. SI 37185 did not have any provisions to allow employers to terminate on notice.

In 1989, the Supreme Court refused termination on notice and said SI 37185 applied. The legal authorities which include Art Corporation Ltd v Moyana 1989 (1) ZLR 340 (S) at 308G – 309(G), Commercial Careers College (1980) (Pvt) Ltd v Jarvis 1989 (1) ZLR 344 (S) at 346 – G – H and Masundire v Willowvale Mazda Motor Industries (Pvt) Ltd HH – 5958 – 95 became authority for the proposition that giving legal effort to termination of employment contracts on notice would result in employees not enjoying protection from arbitrary exercise of power by employers to terminate contracts of employment without any reasons being given.

In 1990, Zimbabwe experienced the birth of Labour Relations (Employment Codes of Conduct) SI 379 of 1990 as amended by SI 561992 which gave provisions for Works Councils to apply for the registration of codes which if registered by the Ministry of Labour would become binding in respect of that workplace undertaking or industry.

This then meant that if you have a registered code, SI 37185 would not apply. Consequently, employers with registered codes of conduct were then allowed to terminate on notice because they were not governed by SI 371 of 1985.

In 2003, the Supreme Court ruled that dismissal on notice was not unlawful if the employer had a code of conduct. In the matter between Chirasasa and others v Nhamo N.O. and Another SC 13502, the Supreme Court held that “The appellants perhaps failed to appreciate that a contract of employment cannot remain static throughout the whole of its existence regardless of the changes in the fortunes of the business.

“Refusal to accept a change in the terms and conditions of employment necessitated by the commercial interests of a business maybe a good enough reason for terminating a contract of employment on notice. The decision to terminate the appellants’ contracts of employment on notice without hearing them was not unlawful”.

The 2002 amendments to the Labour Act brought the concept of unfair dismissal under Section 12B which stipulates that

(1) Every employee has the right not to be unfairly dismissed.

(2) An employee is unfairly dismissed–

(a) if, subject to subsection (3), the employer fails to show that he dismissed the employee in terms of an employment code or

(b) in the absence of an employment code, the employer shall comply with the model code made in terms of section 101(9).

(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

(b) if, on termination of an employment contract of fixed duration, the employee–

(i) had a legitimate expectation of being re-engaged and

(ii) another person was engaged instead of the employee.

What seems interesting from the provisions of Section 12B of the Labour Act is the missing definition of the word dismissal under the list of definitions enshrined in Section 2 of the Labour Act.

It is interesting and important to note here, that the Zimbabwean Labour Act does not have a specific definition on dismissal unlike Labour Acts for other countries e.g. South Africa which differentiate dismissal from termination.

Overview of the Labour Court’s decision on Zuva Petroleum (Pvt) Ltd v Don Nyamande and Another LC H 19514

The case of Zuva Petroleum (Pvt) Ltd v Don Nyamande and Another LC H 19514 has inspired a lot of interest in Zimbabwe’s labour law circles as it has brought a new millennium through departure from numerous rulings that upheld the illegality of termination of a contract purely on notice and for no other cause.

This was an arbitral case that was brought to the Labour Court on appeal.

The Labour Court upheld the appeal and set aside the arbitral award on the basis that termination of the two employees’ contracts on notice was lawful. The Judge stated that the law should be applied as it stands meaning it should not be deviated from.

Most employers have welcomed the new judgement with a view that the figure of justice must be evenly balanced between both employers and employees. The norm has been that in most cases it is employees who terminate their contracts of employment on notice and the employers are left with little or no remedy as the cost of litigating far exceeds the damages suffered by an abrupt departure from employment.

As reported in The Herald edition of May 14 2015, an investigation conducted by The Herald revealed that hundreds of employees have been dismissed on notice by different employers using the new Labour Court judgement.

In my opinion the Labour Court judgment brought a turning point in that the employer is at liberty if done within the confines of the law to terminate a contract of employment on notice.

Furthermore employers have welcomed this new law especially because they are operating in economic challenges that include liquidity crunch, viability problems, and stiff competition from imports.

On the contrary, the major challenge emanating from the Labour Court’s judgement is that employees are construing it as constituting a material departure from the concept of the rules of natural justice that defines employment jurisprudence.

The key ingredient of such is that an employee has the right to be heard before aerse decisions are taken against himher. Under the circumstances, it is clear that the right to be heard cannot be exercised when termination on notice is carried out.

Does termination on notice amount to unfair dismissal?

Some employers within our labour market have gone on to use the Labour Court’s decision in the case of Zuva Petroleum (Pvt) Ltd v Don Nyamande and Another LC H 19514 to dismiss employees on notice.

The employees on the other hand are challenging such dismissals citing unfair dismissal. The decision of the Labour Court in the case of Zuva Petroleum (Pvt) Ltd v Don Nyamande and Another LC H 19514 was challenged at the Supreme Court by the two employees through their legal representatives.

It remains to be seen, however,

how the Supreme Court which has already heard the case and reserved its judgement will determine and associate with the reasoning of the learned

Judge Justice Maxwell of the Labour Court. In my opinion it is prudent for employers to wait for the Supreme Court’s determination in order to avoid complications that may arise between now and then should the Supreme Court decide otherwise when it unveils its findings and determination.

We will wait to see how the Supreme Court define and distinguish between the semantic meaning and context of termination and dismissal and whether or not these two verbs necessarily imply or expressly mean the same act.

Disclaimer: Opinions expressed herein are solely those of the author.

Matthias Ruziwa is an experienced and growing Strategic Human Resource Practitioner. He is also an independent arbitrator practicing in the Midlands Province, City of Kwekwe.

Source : The Herald