Court name
Supreme Court of Zimbabwe
Case number
SC 122 of 2004
Civil Appeal 229 of 2004

Standard Chartered Zimbabwe Ltd. v Musanhu (29/04) (SC 122 of 2004, Civil Appeal 229 of 2004) [2005] ZWSC 122 (26 January 2005);

Law report citations
Media neutral citation
[2005] ZWSC 122













REPORTABLE
(97)



Judgment No. SC. 122/04


Civil
Appeal No. 229/04









STANDARD
CHARTERED ZIMBABWE LIMITED





v
GEORGE MUSANHU








SUPREME
COURT OF ZIMBABWE


CHIDYAUSIKU
CJ, ZIYAMBI JA & MALABA JA


HARARE,
NOVEMBER 1, 2004 & JANUARY 27, 2005








L
Uriri
, for the appellant





D
Mbidzo
, for the respondent







MALABA JA: This is an appeal against the judgment of the Labour
Court delivered on 19 July 2004, granting with costs an
application by the respondent (“Musanhu”) against the appellant
(“Standard Chartered”) for an interim determination in terms
of
s 97(4) of the Labour Relations Act [Chapter 28:01]
as amended (“the Act”), pending the final determination of the
appeal from a judgment of the senior labour relations officer
(now a
“labour officer”).





The
background facts of the case are these. Musanhu was employed by
Standard Chartered, a financial institution, as Head of Money
Markets
Division. He sometimes acted as Head of Treasury when the incumbent
was on leave. On a date not disclosed in the record,
but probably
in 2002, Musanhu was suspended from work and an application made
forthwith to a senior labour relations officer for
an order
terminating the contract of employment in terms of s 3(a) of the
Labour Relations (General Conditions of Employment)
(Termination of
Employment) Regulations, Statutory Instrument 371 of 1985 (now
repealed).





Standard
Chartered believed that Musanhu had abused his authority as Head of
Money Markets Division or as acting Head of Treasury
to commit acts
inconsistent with the fulfilment of the express or implied conditions
of his contract of employment, justifying his
dismissal. The
allegation made against him was that he had fraudulently withdrawn
foreign currency from the bank for personal use
or allocated foreign
currency to his wife, relatives and a friend.





The
evidence placed before the senior labour relations officer at the
hearing of the application on 20 November 2002 was thus
–






On 17 May 2001 the Head of Treasury approved payment of tuition
fees in the sum of ?2 080 and ?12 500 for board,
fares
and stationery in terms of an invoice from Emile Woolf College for
Musanhu’s sister. On 8 June 2001 Musanhu accessed
the sum of
?12 500 from the Highlands Branch of Standard Chartered on the
authority of the invoice granted on 17 May
2001. That left the
sum of ?2 080 unpaid. On 12 June 2001 Musanhu is said
to have forged the invoice by writing on
it the words “approved
?18 000”. He presented the forged invoice at the Avondale
Branch of Standard Chartered and withdrew
the sum of ?10 000
instead of ?2 080. Standard Chartered was prejudiced of
?7 920.






On
20 June 2001 Musanhu was alleged to have presented a DSTV
invoice of US$209 for his subscription fees. He was paid the
foreign currency in cash. On 26 June 2001 he presented a
duplicate of the invoice to Priority Banking and obtained US$209
in
the form of a bank draft. The allegation was that he had
misrepresented the fact that the invoice had not been paid when he
presented it to Priority Banking for payment of the money to
Multichoice by means of a bank draft.





On
30 July 2001 Musanhu is said to have authorised allocation and
payment of US$3 000 to his wife at the exchange rate
of 55:1
instead of 56.962:1. The bank was prejudiced of $9 625. The
authority was granted under reference no. 3945/01.
He also
used the same reference number to allocate and have paid to a friend
of his US$150 000. This meant that there was
in fact no
authority for this allocation and payment, as each allocation and
payment of foreign currency had to have its own authority
identified
by a reference number. The amount allocated to Musanhu’s friend
was way above the maximum of US$5 000 an individual
could
access.





Musanhu
was given authority under reference no. 641/01 to access foreign
currency for his holiday and official travel allowance.
On
16 January 2001 he allocated US$5 000 to his sister and had
it paid under reference no. 641/01. There was no
proper
authority for the allocation and payment of foreign currency to his
sister.






It was also alleged that whilst Musanhu was supposed to be attending
a course in Nyanga he was arrested at Chirundu Border Post smuggling
into Zambia about $1 200 000 concealed in a plastic fuel
container. He was convicted of the crime. The criminal conduct
was said to be unbecoming of a senior bank employee and an
embarrassment to Standard Chartered






In his
defence Musanhu did not deny the acts of misconduct. He gave
irrelevant explanations which unfortunately misled the senior
relations officer into believing that they constituted defences to
the charges of misconduct.






For example, he claimed that he could not get the ?14 580 paid
on 8 June 2001 because the Highlands Branch of Standard
Chartered did not have enough foreign currency. He said he had a
right to approach the Avondale Branch of Standard Chartered for
the
payment of the balance on the invoice. But the gravamen of the
allegation against him was that as a result of the forgery he
committed, in endorsing on the invoice the words “approved
?18 000”, he fraudulently induced the Avondale Branch of
Standard
Chartered to pay him more than the ?2 080 he was
entitled to.






On the
allocation of foreign currency to his wife, his friend and his
relatives, he said the fact that they were people related
to him did
not disentitle them to receive foreign currency from Standard
Chartered. He did not address the gravamen of the allegation,
which
was that not only did he put himself in a position where there was a
conflict of interest but also allocated foreign currency
higher than
the official limits and without the authority of the Head of
Treasury.





All
Musanhu could say in respect of the criminal conduct committed at
Chirundu Border Post was that it took place outside the performance
of his duties. He forgot that for conduct to constitute misconduct
inconsistent with the fulfilment of the express or implied conditions
of a contract of employment it is not necessary that it should have
been committed during working hours or in the carrying on of
the
service or the business of the employer. In Pearce v Foster
1886 QB 536 at 539 LORD ESHER MR said:







“But if a servant is guilty of such a crime outside his service as
to make it unsafe for a master to keep him in his employ the
servant
may be dismissed by his master, and if the servant’s conduct is so
grossly immoral that all reasonable men would say that
he cannot be
trusted, the master may dismiss him.”






The same
view was taken by LORD JAMES OF HEREFORD in Clouston & Co
Ltd v Corry
1906 AC 122, a case of dismissal of a manager who had
been convicted by a magistrate of drunkenness.





The
senior labour relations officer took a shockingly superficial view of
the evidence produced by Standard Chartered to prove the
acts of
misconduct alleged against Musanhu and concluded that it had not
established the offences charged. He said:







“1) It does appear that there is nothing wrong with or fraudulent
in the respondent using two separate branches to withdraw his
forex
allocation. In any case it is common knowledge that there was a
critical shortage of foreign currency in Zimbabwe during
the period
in question. If the respondent failed to get the full amount
authorised at Avondale Branch, there is nothing fraudulent
in
proceeding to draw the balance at Highlands Branch.





2) …





3) …





4) The
applicant seems to take great exception to the fact that some of the
people issued forex were known to the respondent. But
the totality
of evidence led appears to show a farfetched attempt by the applicant
to desperately find fault on the respondent’s
part and impute evil
into otherwise transparent transactions. The bottom line is that
all these people were customers of the bank
just like the hundreds
(of) others the respondent transacted with as part of his duties
during the course of his employ.





5) The
Chirundu Border Post incident is yet another farfetched charge. The
incident is divorced from the respondent’s duties and,
in any case,
the matter is sub judice







Absent from the judgment of the senior labour relations officer was
a critical and objective analysis of the evidence to determine
whether acts of misconduct inconsistent with the fulfilment of the
express or implied conditions of employment had been shown on
a
balance of probabilities to have been committed. Standard Chartered
was ordered to reinstate Musanhu from the date of suspension,
presumably (it was not specified in the order) without loss of salary
and benefits, failing which to pay him damages in lieu of
reinstatement.
The amount of damages to be awarded was not
specified, nor was the method of their quantification stated.





On
28 March 2003 Standard Chartered appealed to the Labour Court on
the ground that the decision that the evidence produced
did not
establish acts of misconduct by Musanhu inconsistent with the
fulfilment of the express or implied conditions of his contract
of
employment was so outrageous in its defiance of logic that no
sensible person who had applied his mind to the evidence could have
arrived at such a conclusion.





Section 97(3)
of the Act provides that an appeal against a determination such as
the one made by the senior labour relations
officer shall not have
the effect of suspending the determination or decision appealed
against. Although the Labour Court could,
upon application being
made to it under s 97(4) of the Act and in the exercise of its
discretion, may have ordered suspension
of the execution of the
judgment pending determination of the appeal, no such application was
made by Standard Chartered. The judgment
remained enforceable by
process of execution appropriate to its nature.





On
28 April 2003 Standard Chartered advised Musanhu by letter that
it was not going to reinstate him in its employment, leaving
the
award of compensatable damages as the only remedy for the enforcement
of the judgment of the senior labour relations officer.





Notwithstanding
this development, Musanhu made an application to the Labour Court on
12 July 2003 in terms of s 97(4)
of the Act for an interim
determination. In the founding affidavit he said:







“… the appeal is being filed just for the purposes of delay. In
the meantime, however, I have no source of livelihood and I
pray to
this honourable court for an order compelling payment of salary and
benefits per month pending finalisation of this case
in terms of the
law. This to be effected whether or not the appellant reinstates me
to my previous job.”






The draft
order to be the interim relief was that:







“1. In the interim the respondent be and is hereby ordered to
reinstate the applicant without loss of pay or benefits.






Alternatively –






Pay the applicant from date of suspension to date of determination
and thereafter the applicant is to be paid his salary per month
and
benefits until such time as the appeal has been finalised.






2. The
respondent bears costs of this suit.”






In
opposing the application, Standard Chartered denied that the appeal
had been noted for purposes of delay as opposed to a genuine
desire
to reverse an outrageous decision. It averred that the prospects of
success in the appeal were good. It denied that Musanhu
was
indigent.





Upon the
hearing of the application on 9 July 2004, it was argued on
behalf of Standard Chartered that the cause of action
had been
misconceived because it was believed that the noting of the appeal
had the effect of suspending the execution of the determination
of
the senior labour relations officer. As the effect of s 97(3)
of the Act was that the determination was enforceable pending
the
determination of the appeal and there had been no application for
stay of execution in terms of s 97(4) of the Act, the
making of
the order sought was unnecessary. It was argued that the
application for interim relief in terms of the draft order was
ill-conceived. It was not in the interests of justice to make a
second order in terms identical to the determination appealed
against.
No useful purpose would be served by duplicating orders.





The
argument did not find favour with the presiding President of the
Labour Court, who said:







“I am unpersuaded by these submissions. The effect of
subsection 3 is that the labour officer’s determination is not
suspended
by the respondent’s appeal to this court. Therefore the
respondent is legally obliged to either reinstate the applicant to
pay
him damages. The only way the respondent could avoid complying
with the determination was to file an urgent application under
subsection 4
for stay of execution pending the outcome of the
appeal.





The
respondent has not done so. Therefore the applicant is lawfully
entitled to enforce his rights under the determination. Whether
you
call such enforcement a mandamus or interim relief is neither
here nor there.





Accordingly
I make the following order –






‘1. Pending the outcome of the respondent’s appeal, pending in
this court under reference LC/H222/03, the respondent shall reinstate
the applicant without loss of pay or benefits, as from the date of
suspension.






Alternatively, the respondent shall pay the applicant his salary and
benefits from the date of suspension until the date when the
respondent’s said appeal is finalised; and







2. The respondent shall pay the applicant’s costs.”







The contention on appeal was that the decision of the Labour Court
to grant the order was clearly wrong. I agree. Section 97(4)
of the Act, in terms of which the application was made and on the
authority of which the interim determination was made, provides
that:







“Pending the determination of an appeal the Labour Court may make
such interim determination in the matter as the justice of the
case
requires.”






Whilst
the Labour Court has a discretion in the matter whether or not to
make an interim determination in the matter, it has to
have regard to
the justice of the case. Assuming for a moment that the interim
determination could be made in the circumstances
of this case to
provide for the reinstatement of Musanhu without loss of salary and
benefits failing which payment of damages, did
the Labour Court
properly exercise its discretion?





The
Labour Court made the interim order without having considered the
prospects of success in the main appeal, the purpose of the
order,
the practicability of forcing the employee on the employer and the
possibility of giving the employee an unfair advantage.





The
Labour Court does not appear to have appreciated that it had a
discretion in the matter, which was to be exercised after having
regard to the requirements of justice. There was no consideration
of what the justice of the case required. The Labour Court
believed
that because the determination appealed against had not been
suspended, it was bound to make the order by way of enforcement
of
that determination.





I accept
the submission made by Mr Uriri, on behalf of Standard
Chartered, that it was not open to the Labour Court in the
circumstances of this case to make the order it
did. Reinstatement
was no longer a matter for which an interim determination under
s 97(4) of the Act could provide. It
had been adjudicated upon
by the senior labour relations officer and made the subject of a
valid order. Reinstatement had been
dispensed with as a subject of
controversy to be determined in terms of s 97(4) of the Act when
Standard Chartered indicated
on 28 April 2003 that it was not
going to reinstate Musanhu.





The
object of an interim determination made under s 97(4) of the Act
is to give a party in whose favour the determination appealed
against
was made an interim right which he would otherwise not have because
of the noting of the appeal. It may also be to grant
the party
against whom the judgment was made temporary relief from the burden
of the obligation imposed by the determination which
he would
otherwise not have because of the appeal.





In this
case, there was no hindrance at all to the enforcement of the rights
under the determination appealed against by Musanhu.
He could have
enforced the determination by the process of execution appropriate to
it regardless of the appeal. As correctly
pointed out, he was free
to have had the damages quantified and the order registered with the
magistrate’s court or the High Court
for purposes of enforcement of
payment.





It is
not necessary to decide in this case whether an interim determination
made under s 97(4) of the Act can take the place
of the ordinary
process of execution of a judgment appealed against. What is clear
is that the effect of the provisions of s 97(3)
and the absence
of an application for an order of stay of execution were
circumstances the Labour Court had to take into account
in deciding
whether a case had been made for an interim determination. It seems
that, contrary to the view taken by the Labour
Court that the effect
of s 97(3) and the absence of an interim order of stay of
execution obliged it to make an interim determination,
these factors
should have persuaded it against making the interim determination.
It should have realised that simply making yet
another order on the
same matter and in the same terms as those of the determination
appealed against was not the appropriate remedy
for the enforcement
of the judgment appealed against.





The
appeal is therefore allowed with costs. The order of the court
a quo is set aside and substituted with the following –







“The application for an interim determination in terms of
section 97(4) of the Labour Relations Act [Chapter 28:01]
is dismissed with costs.”






CHIDYAUSIKU
CJ: I agree.





ZIYAMBI
JA: I agree.





Honey &
Blanckenberg
, appellant's legal practitioners


Mbidzo,
Muchadehama & Makoni
, respondent's legal practitioners