Court name
Supreme Court of Zimbabwe
Case number
SC 8 of 2004
Civil Appeal 401 of 2002

University of Zimbabwe v University of Zimbabwe Staff Associations (01/02) (SC 8 of 2004, Civil Appeal 401 of 2002) [2004] ZWSC 8 (22 February 2004);

Law report citations
Media neutral citation
[2004] ZWSC 8
















DISTRIBUTABLE
(7)


Judgment
No. SC 8/04


Civil
Appeal No. 401/02








UNIVERSITY
OF ZIMBABWE v





UNIVERSITY
OF ZIMBABWE STAFF ASSOCIATIONS








SUPREME
COURT OF ZIMBABWE


SANDURA  JA,
ZIYAMBI JA & MALABA JA


HARARE,
FEBRUARY 12 & 23, 2004








T
Biti
, for the
appellant





S
V Hwacha
, for the
respondent





SANDURA  JA:
This is an appeal against a judgment of the Labour Relations
Tribunal (now the Labour Court) (“the Tribunal”)
which dismissed
with costs the appeal by the University of Zimbabwe (“the
University”) against the determination made by the
senior labour
relations officer. The senior labour relations officer had
dismissed the University’s appeal against the determination
made by
the labour relations officer in terms of which the University was
ordered to increase the salaries of its employees by forty
per
centum
.





The
background facts are as follows. On 10 June 1998 the
representatives of the University and the respondent associations
(“the associations”) met and discussed various proposed increases
in the salaries and allowances payable to the members of the
associations from 1 July 1998 to 31 December 1998. The
meeting was chaired by the Vice-Chancellor, Professor Hill
(“Hill”).





What
was agreed at that meeting was recorded in the minutes as follows:





“The
meeting recommended

the following:





4.1.1. 60%
salary increase.






4.1.2. 50% increase in
allowances. Association Presidents (to) be invited to make
(re)presentations to Salaries and Conditions of
Service Committee.





4.1.3. That
the effective date for the proposed increase be 1 July 1998 and
that in December 1998 there be fresh negotiations
for increases to be
effective from January 1999.” (emphasis added)






Subsequently,
on 27 July 1998 the Salaries and Conditions of Service Committee
met and was chaired by Hill. Its decision
was recorded in the
minutes as follows:






“33.2 The
Committee was recommending

a 40% across the board salary adjustment on salaries (
sic)
and allowances.” (emphasis added)






After
that recommendation had been conveyed to the Secretary for Higher
Education and Technology (“the Secretary”), the Secretary
wrote
to the Ministry of Finance (“the Ministry”) requesting it to
approve the recommended increase in salaries and allowances.





On
10 September 1998 the Ministry replied to the Secretary’s
request as follows:





“Treasury
has considered your request and approved a salary increase of 5% to
21% on a sliding scale for the six months from 1 July
to
31 December 1998. However, allowances have been retained at
existing levels. …





Given
the financial constraints the Government is facing, it is incumbent
upon the Universities to seriously consider broadening and
intensifying their revenue generating programmes/activities. We
believe there is a lot of potential to raise revenue at the
Universities
which have (
sic)
remained largely untapped.”





Later,
a salary increase of 15% to 21% on a sliding scale was substituted
for 5% to 21%.





Thereafter,
on 19 September 1998 the Council of the University held a
meeting at which various matters were discussed. With
regard to the
cost of living adjustment, the minutes of the meeting indicate that
the following report was made to the Council and
noted:





“The
University had submitted to the Ministry of Higher Education and
Technology a request for a 40% across the board cost of living
adjustment. The University had also submitted the recommendations
on new salaries made by the Ernst & Young Human Resources
Consultants. Responses to both submissions were awaited.”





Two
days later, on 21 September 1998, the Secretary wrote to Hill,
informing him that the Ministry had approved a salary increase
of
only 5% to 21% on a sliding scale. Annexed to the Secretary’s
letter was a copy of the memorandum dated 10 September
1998
which the Secretary had received from the Ministry.





In
his reply to the Secretary, dated 1 October 1998, Hill expressed
his deep sense of shock and extreme disappointment at the
cost of
living adjustment approved by the Ministry, and requested that the
award be urgently reconsidered. He denied the allegation
by the
Ministry that the University had not done much to raise its own
revenue, gave examples of how the University had raised large
sums of
money, and said the following:





“The
above are just a few examples of a serious revenue generation
campaign at the University. It is disheartening to allege that
the
institution has not exploited its potential in that area. We have
not relied on the exchequer for all our operational requirements.

It
is only in those areas where donor and other external support are not
yet possible, such as in the area of salaries, that we have
naturally
relied on government funding

(emphasis added)





I
have set out this part of Hill’s letter because, in my view, the
Tribunal misinterpreted it and relied upon that misinterpretation
when it concluded that the University could pay its employees the
difference between the salary increase approved by the Ministry
and
the salary increase of forty
per
centum
recommended to
the Ministry by the University. I shall deal with that issue later
in this judgment.





However,
Hill’s request that the salary increase approved by the Ministry be
revised upwards was unsuccessful. As a result,
the University paid
the employees the salary increase approved by the Ministry.





Subsequently,
on 18 November 1998, the legal practitioners representing the
associations wrote to the labour relations officer
complaining that
the University had committed an unfair labour practice, the
allegation being that it had reneged on the agreement
to pay a salary
increase of forty
per
centum
.





In
her determination, the labour relations officer ordered the
University to pay its employees the difference between the salary
increase approved by the Ministry and the salary increase of forty
per centum
recommended by the University to the Ministry. That decision was
later confirmed by the senior labour relations officer and by
the
Tribunal. Aggrieved by that result, the University appealed to this
Court.





Two
issues arise for determination in this appeal. The first is whether
the agreement between the University and the associations
was subject
to a suspensive condition, and the second is whether the Tribunal
erred when it determined the salary increase to be
paid by the
University. I shall deal with the two issues in turn.





A
suspensive condition, also known as a condition precedent, suspends
the operation of all or some of the obligations arising out
of an
agreement until the occurrence of a future uncertain event. See
The
Law of Contract in South Africa

4 ed by R H Christie at p 159. Once that event
occurs, the agreement becomes operational and binding on the
parties.





Looking
at the facts of this case, there can be no doubt that the parties
agreed that the salaries were to be increased by forty
per
centum
. That is why
the University requested the Secretary to increase the salaries by
that percentage.





However,
there is no doubt in my mind that when the parties agreed on the
salary increase of forty
per
centum
they knew that
their agreement was subject to a suspensive condition, i.e. the
approval by the Ministry. I say so for two main
reasons.





Firstly,
the parties have in the past negotiated salary increases on the
understanding that whatever percentage increase they agreed
upon was
subject to approval by the Government. Thus, in a matter similar to
the present one and between the same parties, the
Tribunal said the
following at p 1 of its judgment, Judgment No. LRT/H/5/97, which
was handed down on 31 January 1997:





“This
is a curious case whereby both litigants have had to resort to
litigation when in fact there is no material dispute between the
parties. The apparent dispute arose simply because of a third
party’s disapproval of what the parties had agreed upon as an
appropriate
salary increase for the year 1992-1993.





The
background to this case is that during the 1992-1993 wage increase
negotiations
the
parties agreed that non-academic staff be awarded a salary increase
of 11% to 34% on a sliding scale subject to government approval
which
is responsible for funding the employees’ salaries
.





Upon
the agreement being referred to government for approval government
turned down the agreed recommended salary increase and proceeded
to
make a unilateral and arbitrary salary increase of 2.5% to 10% on a
sliding scale.” (emphasis added)





Secondly,
in the present case it is clear from what the Tribunal said in its
judgment that the associations were aware that the
agreement by the
University to increase the salaries by forty
per
centum
was subject to
a condition precedent. The relevant part of the judgment reads as
follows:





“It
is trite that for there to be a binding agreement the acceptance by
the offeree must be unqualified and unequivocal.
In
this case it is self-evident that the appellant through its
Vice-Chancellor made it clear to the respondent that it agreed with
the recommendation but needed to consult the Ministry of Finance
before adopting and implementing it
.
There was therefore no firm agreement that could be enforced. The
execution of the tentative or provisional agreement was dependent
upon the outcome of the appellant’s consultations with the Ministry
of Finance.” (emphasis added)





The
finding by the Tribunal that the “Vice-Cnancellor made it clear to
the respondent that it agreed with the recommendation but
needed to
consult the Ministry of Finance before adopting and implementing (the
recommendation)”, has not been challenged in this
appeal. In my
view, that is significant.





In
the circumstances, I am satisfied beyond doubt that the agreement on
the salary increase was subject to approval by the Ministry,
and that
as that approval was not granted the agreement is unenforceable.





I
now wish to deal with the second issue in this appeal, which is
whether the Tribunal, having found that the agreement was
unenforceable,
erred when it determined the percentage by which the
salaries were to be increased.





In
determining the salary increase, the Tribunal relied upon the
provisions of s 91(1) of the Labour Relations Act
[
Chapter 28:01],
now the Labour Act [
Chapter 28:01]
(“the Act”). That section, in relevant part, reads as follows:






“In determining an appeal in
terms of this Part, the Tribunal may confirm, vary or set aside the
determination appealed against, or
substitute its own determination
for the one appealed against …”.





Relying
upon these provisions, the Tribunal substituted its own determination
for that appealed against. However, as the percentage
increase
determined by it was the same as the one determined by the labour
relations officer and confirmed by the senior labour relations
officer, i.e. 40
per
centum
, the Tribunal
dismissed the appeal by the University.





In
my view, the Tribunal erred. I say so for two reasons.





Firstly,
the sole issue before the labour relations officer, the senior labour
relations officer and the Tribunal was whether the
parties had
concluded a binding and enforceable agreement in terms of which the
University was to increase the salaries by forty
per
centum
. As the
Tribunal’s answer to that question was a negative one, that should
have been the end of the matter. The Tribunal should
have simply
set aside the determination appealed against, and left it to the
parties to decide whether or not to resume the negotiations
on the
salary increase, bearing in mind the decision made by the Ministry on
the matter.





Secondly,
the Tribunal should not have substituted its own determination for
that appealed against, unless there was evidence before
it on the
basis of which it could determine the appropriate percentage
increase. In this regard, the only evidence before the Tribunal
was
the agreement between the parties that the salaries were to be
increased by forty
per
centum
, which
agreement had been reached on the basis that the salary increase
would be paid out of funds provided by the Government and
not by the
University. In reaching the agreement the parties had not,
therefore, taken into account the University’s inability
to pay the
salary increase or any part thereof as alleged by Hill.





In
my view, there was no evidence before the Tribunal which indicated
that the University was able to pay the salary increase.
In this
regard, the chairman of the Tribunal seriously misdirected himself
when, after referring to the allegation by the Ministry
that the
University had a lot of potential to raise revenue which had largely
remained untapped, he said:





“I
did not hear the appellant (i.e. the University) to dispute the
assertions of facts made by its principal donor. That being the
case I find as a fact proven that the appellant has the capacity to
meet the balance of 25 to 19 percentage increase (
sic)
cost of living adjustment for the period 1
st July
to 31
st December
1998.”





This
was a serious misdirection because in his letter to the Secretary,
dated 1 October 1998, Hill made it quite clear that
as far as
salaries were concerned the University relied upon Government
funding. As already indicated, after setting out examples
of the
way in which the University had generated revenue he said:





“We
have not relied on the exchequer for all our operational
requirements. It is only in those areas where donor and other
external
support are not yet possible, such as in the area of
salaries, that we have naturally relied on government funding.”





The
letter was part of the record before the Tribunal.





In
the circumstances, there was no evidence before the Tribunal on the
basis of which it could have determined the appropriate percentage
increase in salaries. In addition, the matter had not been argued
before the labour relations officer, the senior labour relations
officer and the Tribunal. The Tribunal, therefore, erred when it
substituted its own determination for that appealed against.





Finally,
I would like to comment on the provisions of s 97(4) of the Act.
The section was repealed by the Labour Relations
Amendment Act,
No. 17 of 2002. However, as the section was in force at the
time the Tribunal determined the present matter,
Mr 
Hwacha,
who appeared for the associations, submitted that the Tribunal had
the power, in terms of that section, to determine as it did the
appropriate percentage increase in salaries. I respectfully
disagree.





The
repealed s 97(4) reads as follows:





“Upon
receiving notice of an appeal, the Tribunal may –






(a) proceed with the appeal by
way of a hearing; or





(b) decide
the appeal on the record; or






(c) remit the matter to the
senior labour relations officer concerned for further investigation
and, upon the conclusion of such investigation,
proceed with the
appeal by way of a hearing or decide the appeal on the record.”





In
my view, whether the Tribunal proceeded with the appeal by way of a
hearing or decided the appeal on the record, it was restricted
to the
determination of the issue between the parties. In the present
case, the sole issue between the parties, from the labour
relations
officer to the Tribunal, was whether the agreement to increase the
salaries by forty
per
centum
was subject to
a suspensive condition. That was the sole issue which the Tribunal
was supposed to determine, whether it proceeded
with the appeal by
way of a hearing or decided the appeal on the record. And that was
the sole issue which brought the parties
before the labour relations
officer in the first place.





It,
therefore, follows that the Tribunal erred when it substituted its
own determination on the appropriate percentage increase
in salaries.
Having concluded that the agreement was subject to a condition
precedent which had not been fulfilled, the Tribunal
should have
allowed the appeal and set aside the determinations of the labour
relations officer and the senior labour relations officer.





In
the circumstances, the following order is made –





1. The
appeal is allowed with costs.






2. The order of the Labour
Relations Tribunal is set aside and the following is substituted –







“1. The appeal is allowed with
costs.






2. The
determinations of the senior labour relations officer and the labour
relations officer are set aside with costs.”

















ZIYAMBI
JA: I agree.














MALABA
JA: I agree.














Honey
& Blanckenberg
,
appellant's legal practitioners


Dube,
Manikai & Hwacha
,
respondent's legal practitioners