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Davies Ndumiso Sibanda Labour Matters
TERMINATION on Notice Judgment by the Labour Court which now awaits the decision of the Supreme Court left many trade unionists and workers uncomfortable and many employers praying that the decision of the Labour Court be confirmed by the Supreme Court.

While the matter is subjudice we cannot speculate on what the Supreme Court is going to say, there is a need to clarify certain issues which have left the labour relations environment very unstable after the Zuva Petroleum (Pvt) LTD vs Nyamande and Arthur case (LC/H/254/14).

I am of the view that whatever decision comes from the Supreme Court the implications of the decision will be limited considering the fact that the arguments raised by parties follow a narrow path as the dispute centres on whether section 12(4) should be read with section 12B and section 5 of Statutory Instrument 15 of 2006. I shall not venture into the arguments related to those matters as we all wait for the Supreme Court to decide whether employees can be terminated on notice or not.

Where an employer terminates employees on notice instead of retrenching them, this is usually with the hope that at arbitration the employer at worst will be ordered to reinstate or pay damages. This route is very risky as workers can approach the dispute, not from an angle of saying the termination on notice is lawful but could argue that what the employer did was retrenching without following procedure. When that happens then the issue before the courts would be for the courts to decide whether what indeed happened was retrenchment or not. In the event the court finds that what the employer did was retrenchment, it is highly probable that the courts will declare the termination on notice a nullity and the employer is ordered to reinstate and follow the retrenchment procedures if he wishes to terminate employees. This shows clearly that each case will have to be dealt with on its merits and depends on line of argument raised by parties.

It would be interesting to see how the Labour Court would have handled the Zuva Petroleum case had the workers argued that their termination was retrenchment and asked the court to apply the dominant impression test on what was done by the employer. I have no doubt in my mind that the case could have been concluded differently considering the fact that at law where express procedures to deal with a particular situation are legislated then parties cannot depart from the set procedures.

Further, employers who terminate employees on notice run the risk of having their cases parked by the lower courts while waiting for direction from the Supreme Court and that leaves the organisation with a risk of having to reinstate the workers in the event the Supreme Court rules that the termination on notice is illegal or if the judgment of the Supreme Court is based on different circumstances from those of the employer.

There is also a chance that the Supreme Court may wait for the alignment of labour legislation to the constitution and leave Parliament to resolve the matter. It is not known when this will happen and how parliament will craft the legislation meaning that whoever takes a chance with terminating on notice is exposing himself to the risk of an open ended liability.

The assumption that damages are better than paying retrenchment packages is misreading the law on payment of damages in lieu of reinstatement. While there is no case law on the meaning of punitive damages mentioned in the Labour Act. I am of the view that where someone abandons the retrenchment route and terminates employment contracts using other means found to be unlawful. The courts might impose punitive damages which could be worse than retrenchment because the word “Punitive” means that the damages should be such that the offender should not do it again. It only takes a brilliant lawyer to convince the Labour Court on the meaning of punitive damages and the employer will be in serious problems.

In conclusion, whatever route the parties take will be guided by the facts of the case and I am of the view that the Zuva case is unlikely to have earth shattering implication as each case will depend on how it is argued by the parties as there are a number of ways of arguing against legality of termination on notice and the Supreme Court could arrive at different decisions depending on how the legal issues raised and argued as guided by the Labour Act and Constitution. Further, in not, a so distant future, the issues of contracts and retrenchment will be dealt with by the legislature taking away any ambiguities which might exist with the present labour legislation.

• Davies Ndumiso Sibanda can be contacted on: e-mail: [email protected] <mailto:[email protected]>. Cell:: 0772 375 235.