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Windfall for retrenched workers. . . ConCourt orders employers to pay damages for loss of jobs

By Daniel Nemukuyu

Thousands of workers whose contracts were arbitrarily terminated on notice pursuant to the infamous Zuva Petroleum judgment of July 2015 will now be paid damages for loss of employment.

Chief Justice Luke Malaba
Chief Justice Luke Malaba

The highest court in the land yesterday ruled that amendments to the Labour Act compelling employers to pay damages to fired workers by taking into account the number of years served apply in retrospect.Chief Justice Malaba, with concurrence of eight other judges of the Constitutional Court, ruled that employers must compensate workers fired in terms of Section 12C of the Labour Act.

Section 12C outlines the retrenchment procedure.

The Constitutional Court issued the judgment in a case in which Greatermans Stores and Meikles were challenging the constitutionality of the retrospective application of the law.

They argued that since the workers were fired before the amendment to the law, as employers they should not be bound by a law that came into effect well after the workers were fired.

However, the Constitutional Court ruled that the retrospective application of the law was legal.

“The court holds, on the main ground on which the constitutionality of the transitional provision is challenged, that there is no constitutional provision which prohibits the use by the legislature of the method of retrospectivity to implement civil legislation.“On the alternative ground of the challenge to the constitutionality of the transitional provision, the court holds that the applicants failed to prove the alleged infringement of any of the fundamental rights they relied upon.

“The retrospective imposition of new financial obligations on the applicants to pay compensation to the employees whose employment they terminated on notice for loss of employment, respects their rights enshrined in Section 56(1), 65(1) and 71(3) of the Constitution,” reads part of the judgment.

Section 12(4) of the amended law allows termination of employment in cases where the employee and the employer mutually agree in writing.

The same law allows termination of contracts for those employed on fixed terms.

In terms of that law, the employer may terminate employment in terms of the employment code (disciplinary proceedings) or pursuant to the retrenchment route as stipulated under Section 12C of the Labour Act.

The same piece of legislation states that in cases where one is not employed for a fixed-term period and is not in agreement with the employer, the retrenchment route must be followed.

The amended law, in terms of a transitional provision gazetted by Government after the 2015 terminations, should apply in retrospect to cover all people fired prior to the amendment.

Chief Justice Malaba said retrospective application of the law was meant to achieve fairness and justice, considering that the workers who had served for years were now wallowing in poverty after being sent packing empty-handed.

“All that the legislation did was to impose a restrospective obligation to conduct that was past, justifiably so, to achieve fairness and justice.

“Acting in accordance with the fundamental principles of fairness and justice, the employers would have realised that long-serving employees deserved more than three months’ notice pay.

“Long-serving employees would have become what they were in society because of their work.

“The legitimate legislative purpose of protecting employees, whose contracts were terminated on notice from the harm of loss of employment for no fault of their own, ensured that the public interest in the fundamental values of fairness and justice which underlay the employment relationships ought to have been taken into account by employers in terminating employment on notice,” ruled Chief Justice Malaba.

The court found that most employers who fired workers on notice pursuant to the Zuva judgment only used the opportunity to offload workers cheaply.

The amendment was effected to control employers who were firing workers at will without the need for fair compensation.

“A system that allows an employer to just wake up one bad day and decide, for undisclosed reasons, to terminate a contract of employment by giving notice of intention to do so without any regard to the need to compensate the employee for loss of employment, is fundamentally unfair,” reads the judgment.

Ms Vernanda Munyoro appeared for Government in the challenge while Advocates Thabani Mpofu and Garikai Sithole represented the two companies.  The Chronicle