Case Analysis of Zuva Petroleum

A Critical Overview of the Labour Court’s decision in
Zuva Petroleum (Pvt) Ltd vs Don Nyamande and Another LC/H/195/14

  1. The case of Zuva Petroleum (Pvt) Ltd –vs- Don Nyamande and Another LC/H/195/14 (“this case”) has inspired a lot of intrigue in labour law circles in that it represents a material departure from numerous rulings that upheld the illegality of termination of a contract purely on notice and for no other cause.
  2. This case calls to mind Art Corporation Ltd v Moyana 1989 (1) ZLR 304 (S) at 308G-309B, Commercial Careers College (1980) (Pvt) Ltd v Jarvis 1989 (1) ZLR 344 (S) at 346 G-H, Masundire v Willowvale Mazda Motor Industries (Pvt) Ltd HH-5958-95 which have been authority for the proposition that giving legal effect 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 on notice without any reasons being given.
  3. The case is a reincarnation of the decision in Chirasasa & Ors v Nhamo &Ors wherein the supreme court held: 
“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 may be 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.”
  4. This was an arbitral case brought on appeal to the Labour Court. The Zimbabwean Labour Act provides for alternative dispute resolution mechanisms before parties appear in the Labour Court. The provisions and spirit of the Act facilitate less expensive and more expedient methods of resolving employment disputes.
  5. The Labour Court upheld the appeal and set aside the arbitral award on the basis that the termination of the Respondent’s contract of employment on notice was lawful. This reasoning seems to also find confirmation in Mbira v Insurance Brokers of Zimbabwe HH 9-05 as follows:

“In fact it is the position that the applicant was dismissed on notice in terms of his contract of employment. Clearly therefore the respondent did not, in terminating the contact of employment proceed in terms of the Code. In my view the applicant could only have proceeded in terms of the Code following a decision that the applicant had been found guilty of misconduct, irrespective of whether or not the procedures outlined in the Code had been adhered to. I agree with the submission in the applicant’s heads of argument that in view of the fact that the applicant’s dismissal was outside the code the appeal process provided therein was not available to him.“

  1. What is of importance in the current case as said by the Honourable Judge is that the Law should be applied as it stands meaning it should not be deviated from. An example of this can be taken from the case of Samuriwo v Zimbabwe United Passenger Company 1999 (1) ZLR 385 where it was held by GARWE J: 
“…that s 1A of the Regulations contained very clear and unambiguous language, the effect of which was that prior written approval of the Minister to terminate on notice a contract of service with an employee to whom the provisions of a registered Code of Conduct applied was not required. The learned judge made the pertinent observation that the legislature must be presumed to have been aware when enacting s 1A of the Regulations that employment Codes of Conduct contained provisions which dealt with matters of discipline and administration of discipline at workplaces”.
  2. The figure of justice must be evenly balanced between both employers and employees. What is extremely important to note is that mostly it is employees who terminate contracts of employment on notice usually on 24 hour notice and employers are left with little or no remedy as the cost of litigating far exceeds the damage suffered by an abrupt departure from employment. This case has brought about a turning point in that the employer is also at liberty if done within the confines of the law to terminate a contract of employment on notice.
  3. Furthermore, usually labour laws tend to favour the employee leaving the employer with little or no redress however in this case the Honourable Judge changed the face of things. This may be a critical school of thought and necessary intervention from the judiciary that is awake to the harsh economic environment in which employers are operating in as acknowledged as follows: 
“Economic challenges, liquidity crunch, viability problems, competition – the list is not exhaustive for these and other phenomena which have conspired to hamstring a lot of business entities in this country with the consequent result of threatening their very existence. Too ghastly to contemplate are the possible consequences.”1
  4. The challenge in the view taken by the labour court is that it may be construed as constituting a material departure from the concept of rules of natural justice that define our employment jurisprudence. A key ingredient of such being the right to be heard before adverse decisions are taken against an employee. Could termination of a contract of employment be exercised without regard to the principle of natural justice expressed in the maxim audi alteram partem (“the audi rule”)?The audi rule is a common law principle which has been applied by courts in proceedings as part of rules of natural justice, to grant an opportunity to be heard to persons whose rights, liberty, property, or legitimate expectation have been adversely affected.
  5. On the other hand, the decision to terminate contracts of employment on notice is made in the exercise of a contractual right; a mere contract of employment between private individuals, cadit. It follows therefore that where it was not an express term of the contract of employment containing the right to terminate on notice that the employee should be heard before the decision to give them notice was taken then indeed there is no basis on which such an obligation can be implied into the contract.
  6. The question arises as to whether these two positions are parallel to each other or simply speak the same language. That is, when a contract of employment is terminated on notice by either party it remains what it is, a contract, a commercial transaction, from which either party to it may choose to withdraw. This position finds ample legal support as follows:

“If there is one thing which more than any other public policy requires, it is that men of full age and competent understanding shall have utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice. Therefore you have this paramount public policy to consider-that you are not lightly to interfere with this freedom of contract”

[JESSEL, M.R., in Printing Registering Co v Sampson, 19 Eq. 462atp. 465.]

  1. The concepts of natural justice come into play when the right to be heard is invoked where termination is for cause, say for misconduct in terms of a registered code of conduct. Perhaps the learned judge’s reasoning ushers in not only an era in which employees cease to be cry babies, but one in which the legal mind is called upon to define and distinguish between the semantic meaning and context of termination and dismissal and where or not these two verbs necessarily imply or expressly mean the same act. In making an opinion on the critical reasoning of the learned judge it is important to call to mind that:

“It is presumed that the legislature does not intend to make any change in the existing law beyond that which is expressly stated in, or follows by necessary implication from, the language of the statute in question. It is thought to be in the highest degree improbable that Parliament would depart from the general system of law without expressing its intention with irresistible clearness, and to give any such effect to general words merely because this would be their widest, usual, natural or literal meaning would be to place on them a construction other than that which Parliament must be supposed to have intended. If the arguments on a question of interpretation are “fairly evenly balanced, that interpretation should be chosen which involves the least alteration of the existing law.

  1. It remains to be seen however, how the Supreme Court will determine and associate with the reasoning of the Learned Justice Maxwell. The matter further brings to the fore an intriguing complication in between the time when the supreme court makes its findings and the present when the learned labour court judge’s decision is extant and binding.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s