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Court rules out packages for retrenched workers

By Fidelis Munyoro and Tendai Rupapa

Workers who lost employment after a Supreme Court ruling that allowed employers to terminate employment contracts on three months notice will not get anything, the High Court has ruled.

Government relieved fired workers when it amended the labour law to provide for companies to pay fired workers retrenchment packages in retrospect.

Zimind Publishers (Pvt) Ltd, which fired 75 workers on August 20, 2015, following the July 17 Supreme Court ruling, went to the higher court challenging the constitutionality of amendments to the Labour Act, particularly the provision that companies pay fired workers in retrospect.

The publishing firm wanted the court to strike down section 18 of the Labour Amendment Act Number 5 of 2015.

The section had the effect of declaring all terminations that occurred after the Zuva judgment illegal, unless a minimum retrenchment package was paid by the employer.

In a landmark judgment yesterday, Justice Loice Matanda-Moyo ruled that Section 18 takes away the employers vested rights to terminate contracts of workers on notice, making it unconstitutional in a democratic society.

“While it may be lawful to legislate retrospectivity, such legislation may not take away vested rights,” said Justice Matanda-Moyo.

“I am of the view that taking away vested rights is contrary to the Constitution. It is also not in conformity with the principle of the rule of law to prescribe a law ex post fact. Accordingly, it is declared that section 18 of the Labour Act Number 5 of 2015 is inconsistent with sections 3(2) (k), 56(1) and section 86 of the Constitution of Zimbabwe and is therefore invalid.”

The matter will now be referred to the Constitutional Court for determination in terms of section 167(3) of the Constitution.

In August 2015, Zimind, fired the workers on notice.

The fired workers were paid their July and August salaries.

In addition, the workers were paid three months’ salaries in lieu of notice.

Later, the Government intervened with a cocktail of reforms to the Labour Act to halt the employment haemorrhage.

It amended the law by creating section 18, which provides for workers fired before the amendment of the law to be given retrenchment packages.

Arguing the matter for Zimind, Advocate Tawanda Zhuwarara said the amendment had the effect of imposing financial obligations on the employer.

This, he argued, forcibly deprived the employer of money to the benefit of the third parties who were never entitled to such money at the time of termination.

“Information which punishes certain conduct must be available before the conduct,” argued Adv Zhuwarara.

“If a conduct is lawful then, and one acts in terms of the law, such conduct cannot in future be impugned.”

Adv Zhuwarara also argued that the amendment was not justified in a democratic society.

The lawyer further argued that creating legislation with retrospective effect was a hallmark of tyranny as such laws placed citizens at the mercy of Government.

“The ordinary supposition is that legislation is crafted to deal with future events and circumstances, and has never been designed to deal with past demeanours,” argued Adv Zhuwarara.

Mr Ephraim Mukucha from the Attorney-Generals’ office who acted for the Ministry of Public Service, Labour and Social Welfare conceded that generally, the law should not apply in retrospect.

He, however, argued that there were exceptions to that general rule hence section 18 of the Labour Amendment Act fell under those exceptions.

“It becomes lawful to legislate retrospectively where there is a need to clear cases of injustice,” said Mr Mukucha.

“The amendment came about to correct a situation which Government perceived as unjust. The country’s workers were being short changed by their employers which resulted in a public policy decision being taken to remedy the breach.”

But Justice Matanda-Moyo in her judgment, noted that the parties were agreeable that the Labour Amendment Act Number 5 /15 was intended to apply in retrospect and take way the vested rights in an employer of terminating employment contract on three months’ notice without further compensation.

The judge agreed that the amendment had retrospective effect.

It was also clear to Justice Matanda-Moyo that the amendment was a response to the Supreme Court decision in the Zuva Petroleum case.

“It is trite that there is a presumption against retrospectivity of statutes,” said Justice Matanda-Moyo.

“But where the enactment in question provides for retrospectivity then such presumption is rebutted. As a rule, without clear words to the contrary, statutes do not apply to the past. They apply to a future state or circumstance.”

Many employers individually, or under the banner of the Employers’ Confederation of Zimbabwe (Emcoz), have approached both the High Court and Constitutional Court challenging the constitutionality of the amendments to the Labour Act – chief among them the provision that companies pay fired workers in retrospect. One such case is awaiting determination at the apex court. The Chronicle