Court name
Supreme Court of Zimbabwe
Case number
SC 42 of 2004
Civil Appeal 63 of 2002

African Gold Zimbabwe (Pvt) Ltd. v Dube and Others (63/02) (SC 42 of 2004, Civil Appeal 63 of 2002) [2004] ZWSC 42 (26 July 2004);

Law report citations
Media neutral citation
[2004] ZWSC 42



5


SC
42/04












REPORTABLE
ZLR (37)





Judgment
No. SC 42/04


Civil
Appeal No. 63/02








AFRICAN
GOLD ZIMBABWE (PRIVATE) LIMITED v





A     DUBE
AND ONE HUNDRED AND FIFTY-SEVEN OTHERS








SUPREME
COURT OF ZIMBABWE


CHIDYAUSIKU
CJ, CHEDA JA & MALABA JA


HARARE,
MAY 6 & JULY 27, 2004








R
Y Phillips
, for the
appellant





C
M Jakachira
, for the
respondents





CHEDA
JA: The appellant is a gold mining company and the respondents
were its employees.






In December 1999 the appellant
found itself in what it called serious financial problems and decided
to retrench some of its workers.
A meeting of the appellant’s
Works Council was called and it was decided that the respondents
should be retrenched from employment
with effect from 31 January
1999.






The parties failed to agree on
the retrenchment packages for each employee. The dispute was
referred to the Retrenchment Committee
in terms of s 6 of the
Labour Relations (Retrenchment) Regulations, 1990. Recommendations
were made to the Minister of Public
Service, Labour and Social
Welfare (“the Minister”), who approved the following package for
each retrenchee –






(a) three months’ salary
severance pay;



(b) relocation allowance -
$5 000.00;


(c) $50
for each year served;


(d) disturbance
allowance - $3 500.00;


(e) one
month’s salary notice pay; and


(f) other
terminal benefits.





The
appellant was not happy with the Minister’s decision and took the
matter to the Labour Relations Tribunal. It raised the
following
complaint:





“The
Minister misdirected herself in that she failed to take into account
that it was in financial dire straits.”





The
appellant submitted various statements of its accounts and
correspondence from its banks to support its allegation of serious
financial problems. The statements show losses made by the
appellant. There were also threats to close the accounts, dishonour
cheques and also threats of court action. There is therefore no
doubt that the appellant could not continue to operate. Auditors’
reports pointed out that there were excess liabilities over assets.
The appellant said some mines were sold but no funds were generated.

Some of the appellant’s bank accounts were overdrawn.





When
authority to retrench was sought, the appellant’s retrenchment
committee recommended the following package –





(a) three
months salary severance pay $4 402.08


(b) relocation
allowance $5 000.00


(c) $50
for each year of service (50 x 18) $900.00


(d) disturbance
allowance $3 500.00


(e) notice
pay $1 467.36



_________


TOTAL
$15 269.44



_________ .





The
employees recommended the following –





(a) six
months salary severance pay $8 804.16


(b) relocation
allowance $5 000.00


(c) inconvenience
allowance $3 500.00


(d) notice
pay $1 467.46



_________


TOTAL
$28 772.62



_________ .








On
the other hand, the appellant was offering the following package –





(a) three
months salary severance pay $4 402.08


(b) relocation
allowance $250.00


(c) $50
bonus for each year as bonus served (50 x 18) $900.00


(e) one
month’s salary notice pay $1 467.36



_________


TOTAL
$7 019.44



_________ .





The
offer by the appellant is about half of the amount recommended by the
retrenchment committee and about one-third of the amount
claimed by
the employees.





The
Minister approved the retrenchment package submitted by the appellant
but with the following adjustment –






(b) relocation allowance
$5 000.00 instead of $250.00.





The
Minister also said the employees were to be paid, in addition, other
terminal benefits such as leave pay, gratuity/pension, etcetera,
where applicable.





It
will be seen from the above that the difference between what the
Minister approved and what the appellant had offered is very
small.
However, the appellants alleges that the Minister failed to pay
regard to the fact that the appellant was in serious financial
difficulty.





When
asked where the appellant would source the funds that it offered, the
appellant pointed out that another mine, Inez Mine,
was working
and generating money. The appellant did not show or allege that
Inez Mine could only afford what it was offering
and not more,
bearing in mind that the difference was very small.





I
do not agree with the submission that the Minister failed to take
into account the financial position of the appellant because,
while
she could have approved the package recommended by the employees or
the retrenchment committee, she chose a package as close
as possible
to the package offered by the appellant.





There
is, therefore, no basis for alleging that she did not consider the
difficult financial position of the appellant.





As
I said earlier, there is nothing to show that the appellant could not
get a little more from the other mine. The suggestion
that the
other mine is controlled by different people does not assist, as we
have been told that this mine is in a position to assist
the
appellant financially.





It
is not correct to say that the appellant in this case had “virtually
zero cash flow”, as was observed by McNALLY  JA
in
Continental Fashions v
Mupfuriri & Ors

1997 (2) ZLR 405. The appellant has revealed that, although it may
have no funds of its own, it is able to source funds from another
mine of the same company.





The
Tribunal did not just hear the matter as an appeal. It heard
evidence, and had the appellant’s statements of accounts for
consideration, before it made its decision.





I
find that there is nothing that can be said to be grossly
unreasonable in the decision made and, as such, there was no
misdirection.





Accordingly,
there is no merit in the appeal and it is dismissed with costs.


CHIDYAUSIKU  CJ:
I agree.


MALABA
JA: I agree.


Y
A Mukadam
, appellant's
legal practitioners


Jakachira,
Gahadzikwa & Partners
,
respondents' legal practitioners