Zimbabwe’s Labour Bill: The trouble with retrospective legislation

By Alex T. Magaisa

I understand the plight of workers, but I disagree with retrospective legislation. It is a path beset with danger and booby-traps. In this piece, I explain my views on the Labour Amendment Bill No. 7 of 2015 currently going through the legislative process in the Zimbabwean Parliament.

The Bill has divided opinion. Those who support it believe it restores the right of workers after a landmark judgment of the Supreme Court of Zimbabwe a few weeks ago which resulted in mass terminations of jobs as struggling companies saw an opportunity to reduce their wage bills. Those who oppose it, especially business, believe the Bill is retrogressive and will discourage investment.

The Supreme Court judgment in the case of Nyamande & Donga v Zuva Petroleum (2015) confirmed and clarified the legal position that employers had a common law right to sack employees on notice, without the need to give reasons.

Although there had been similar rulings before, this decision made the position clearer and thus gave confidence to employers to sack employees on short notice. It allowed them to circumvent the circuitous and more expensive retrenchment procedures in the labour legislation.

Given the dire economic conditions, most businesses complained that they were carrying huge wage bills and the judgment allowed them an avenue to shed off unwanted labour.

The result was that many private companies went on a sacking spree. The Bill is the government’s response to the carnage on the labour market. In essence, it reverses the effect of the Supreme Court judgment, effectively banning termination on notice. If any employer wishes to terminate employment, it has to be done through an employment code. This closes the window opened a few weeks earlier by the Supreme Court.

Where an employer wishes to retrench, new rules have been set. The labour unions have welcomed the Bill while the employers are unhappy with it.

When the Supreme Court made its ruling a few weeks ago, I was critical of the judgment and the reasoning behind it. I argued that the law, which had previously favoured employees, had now veered in the opposite direction and now favoured employers.

The position on either end was disproportionate and was not mutually satisfactory. I argued that the challenge was to create a reasonable balance, which catered for the interests of both labour and capital without favouring one in a disproportionate way.

However, the fact that employers are complaining over the Bill suggests that there is a still a problem. But in some ways, one could say employers invited the hasty reaction of government (and in this case, the opposition).

Their own response to the Supreme Court judgment was rushed, inconsiderate and some might even say, rather callous. Just hours after the court delivered judgment, letters were being served to employees. More of the same was to come in the days that followed. It wasn’t a pretty sight but business didn’t care. They believed they were following the law.

Employers will say it was legal and that they were perfectly entitled to act as they did. That may be so but it also seemed heartless and ruthless. Day after day newspapers carried stories of mass sackings, which were effectively retrenchments disguised as terminations on notice.

I felt business could have approached the matter differently and more reasonably.  It was a failure in strategic reading and understanding of the political environment and a lack of foresight regarding the likely outcomes of their actions, however perfectly legal they were. The reprieve, if anything, would be temporary, and worse might come after it and this is precisely what has come to pass.

The result of their actions was an outcry across the country. Even state-owned companies joined the fray, adding to the woes on the labour market. Business didn’t read that politicians, by nature, are often populist. They will latch on to anything that gives a suggestion that they are people-oriented.

This is why parties sell themselves using the label that they are “pro-poor”.  No wonder then that the two major parties, the ruling Zanu PF and the opposition MDC-T, found themselves in a rare moment of unity, each in fact, working to out-compete the other as the best advocate for workers’ rights.

When political parties jostle over an issue with mass appeal, there is usually a suspension of reason, in favour of populism. I’m therefore not surprised that both political parties have taken the direction that favours labour – it is the market for votes they are after. It’s a popularity contest and no-one wants to be seen to be antagonising workers. But for their part, employers could have done better than present themselves as joyful executioners in the aftermath of the judgment that gave them disproportionate power.

Retrospective Legislation

A clause that is of particular concern, however, is s. 18 of the Bill, the transitional provision, dealing with matters arising between the time of the Supreme Court judgment and the passage of the Bill into law. It states that the new provisions of the amended law will apply to all employees who were sacked after the Supreme Court judgment.

This effectively means the new provisions protecting employees will have retrospective effect and will therefore reverse the decision of the Supreme Court. In effect, it will be as if the decision of the Supreme Court was never made, with all the terminations of employment that took place since then being rendered null and void. This is a very controversial provision and it does not give me a great deal of comfort.

I have never been comfortable with legislation that has retrospective effect. It renders unlawful things that would have been lawful when they were done. It leads to uncertainty, as actions done today in a perfectly legal way can be rendered unlawful tomorrow or at any point in future, through retrospective legislation. I do not like retrospective legislation because it is prone to abuse.

I can see why the politicians think it is necessary to protect the interests of workers who were sacked in the wake of the judgment but I do not support this provision for the simple reason that it sets a dangerous precedent. Once you start using retrospective legislation in this manner, where does it stop? I have always been against retrospective legislation and I am not going to support it now.

In 2005, Government passed Constitutional Amendment No. 17, whose effect was to legalise the Fast Track Land Reform Programme (FTLRP). When the FTLRP was carried out from 2000, it was not in accordance with the existing constitutional provisions. The government was aware of this but went ahead anyway.

However, as some point, government knew that it had to formalise the process. This is why they passed the Amendment No. 17, whose provisions legalising what had happened since 2000 had retrospective effect. I was critical of the use of retrospective legislation at the time and I am not going to start supporting it now.

The trouble with retrospective legislation is that it can be a licence for impunity and illegality. It can allow the state to engage in illegal conduct, knowing fully well that it can legalise that conduct through retrospective legislation.

It can also, as we have seen, take away rights that existed under a lawful arrangement, by rendering them invalid through retrospective legislation. It would mean when you do anything, you are never certain whether it will be legal or not, just in case the state passes retrospective legislation. It can’t be good for anyone.

Legal Challenge?

Legally, I also foresee this clause facing stiff resistance in the courts of law and possibly being severely limited in its effect. The law does not prohibit retrospective legislation but the courts tend to interpret it very strictly.

This is not the first time that the government has used retrospective legislation. In the case of Barclays Bank v Nyahuma SC 86/04, the court used a very narrow interpretation to restrict the effect of retrospective legislation on the rights of employers.

In that case, the law provided that an appeal by a party to a labour dispute would suspend the judgment pending the determination of the appeal. This allowed Barclays Bank to refuse to reinstate the employee pending the appeal which it had noted at the Labour Tribunal.

However, before the appeal was heard government passed an amendment to the labour laws, to provide that an appeal by a party does not suspend a judgment. This meant the employee would have to be reinstated pending the appeal. However, Barclays had refused to reinstate the employee. The matter came before the Supreme Court, effectively to determine the scope of the retrospective provision.

The Supreme Court accepted that legislation could have retrospective effect if it explicitly says so.  While there is a presumption against retrospective legislation, this can be rebutted by explicit legislation.

This much had been stated clearly in a major case Nkomo & Anor v Attorney-General & Others 1993 (2) ZLR 422 (S). “The clear and unambiguous wording of a statute can rebut the presumption against retrospectivity”, the court stated in Barclays Bank v Nyahuma.

Nevertheless, having accepted the retrospective effect of legislation, the court went on to interpret the retrospective provision very strictly and therefore, limited its effect. It stated that retrospectivity would not take away rights that had already accrued.

It made a fine distinction between potential rights and accrued rights, holding that the retrospective provisions affected potential rights but not accrued rights – i.e. rights that had already accrued at the time of the amended legislation.

In that case, the court held that Barclays had already accrued rights to suspend the employee which could not be taken away by retrospective legislation.“There is nothing in the language of the amendment that evinces the law giver’s intention to take away accrued rights …” the court said in the case.

Much will therefore depend on how the court interprets the scope of the retrospective effect of s. 18 of the Bill and indeed, the amended s. 12 if employers choose to challenge its scope and legality.

Vested Rights in the Constitution

There is also a constitutional dimension to the issue, relating to the protection of vested rights. In this regard, it is worth noting s. 3(2)(k) of the Constitution, providing for Founding Values and Principles. It states that,

“The principles of good governance, which bind the State and all institutions and agencies of government at every level, include—

(k) due respect for vested rights …”

It can be argued in this regard that the rights of employers to sack employees on notice had accrued to the employers following the judgment and can therefore be classified as vested rights. In this regard, it could be argued that s. 18 of the Bill does not demonstrate due respect for vested rights of employers contrary to s. 3(2)(k) of the Constitution.

In this regard, it is much too early for employees to celebrate the passage of the Bill. It can still be challenged by employers and given the restrictive and pro-capital approach of the Supreme Court, it might still read this very narrowly in favour of the employers. The one other option would be strengthen the explicit character of s. 18 so that there is no room whatsoever for any other interpretation.

I was appalled by the Supreme Court judgment a few weeks ago. I thought its interpretation was too literal and too narrow, leading to absurdities and the unreasonable results that we have witnessed in the last few weeks. Nevertheless, I abhor retrospective legislation, even if the law recognises it in some exceptional circumstances.

I have great sympathy for the workers of Zimbabwe and have written strongly in their support, but I am looking at the bigger picture here and I fear celebrating retrospective legislation opens a path to abuse of the law. How will we stand up to challenge retrospective laws when we allow them to be used in some cases? Where do we draw the line?

You can contact Dr Alex Magaisa on [email protected]. This article was initially published on his website: Alex Magaisa.com