Court name
Supreme Court of Zimbabwe
Case number
SC 77 of 2005
Civil Appeal 143 of 2005

Stanbic Bank Zimbabwe Ltd. v Charamba (43/05) (SC 77 of 2005, Civil Appeal 143 of 2005) [2006] ZWSC 77 (29 January 2006);

Law report citations
Media neutral citation
[2006] ZWSC 77













REPORTABLE
ZLR (65)



Judgment No. SC. 77/05


Civil
Appeal No. 143/05









STANBIC
BANK ZIMBABWE LIMITED v





ARTHUR
T.M. CHARAMBA








SUPREME
COURT OF ZIMBABWE


CHIDYAUSIKU
CJ, SANDURA JA & CHEDA JA


HARARE,
NOVEMBER 14, 2005 & JANUARY 30, 2006








E
T Matinenga
, for the appellant





S
V Hwacha
, for the respondent





SANDURA
JA: This appeal arose out of a labour dispute which was decided by
the Labour Court in favour of the respondent on 13 May
2005.






The
background facts in the matter may be tabulated conveniently as
follows –







1. The respondent (“Charamba”)
joined the appellant (”the Bank”) as a junior employee on
1 August 1988, and thereafter
rose through the ranks to the
position of assistant general manager, strategic planning.







2. On 28 February 2002, the
Bank’s managing director, Mr G R Brackenridge
(“Brackenridge”), wrote to Charamba
as follows:






“Following
on from the restructuring of the Bank to meet the challenges of
competing in the marketplace I regret to advise you that
your post
has become redundant with effect from 28 February 2002. The
Bank is not in a position to offer you alternative employment
and
Human Resources Department will be contacting you during the week
ending 8 March 2002 to negotiate your package.”






3. On 5 March 2002 Charamba
wrote to Brackenridge as follows:






“I
acknowledge receipt of your letter dated 28
th February
2002, and note your unilateral decision to retrench me and to offer
me an exit package.





Regrettably,
I must advise that it is not lawful for you to purport to have
terminated my employment with
effect
from the 28
th
of February 2002
.
The retrenchment regulations provide that a retrenchment is
void
if not in accordance with the regulations as set out.





In
the event, I remain an employee of the Bank and entitled to all
salary, benefits and or other allowances until the matter is
determined.
I reserve all rights in this regard.





Besides,
I wish to place on record that your decision to retrench me is not
justified … .”






4. On 21 March 2002
Mr S Z Kazhanje (“Kazhanje”), the assistant
general manager, human resources, wrote to
Charamba giving him the
details of the proposed severance package.







5. On 2 April 2002 Charamba
wrote to Brackenridge. In that letter he referred to the letter he
had received from Kazhanje,
and reiterated that the retrenchment was
void because it was not in accordance with the provisions of the
Labour Relations (Retrenchment)
Regulations, 1990 (Statutory
Instrument 404 of 1990) (“the Regulations”) (now repealed). In
addition, he made counter proposals
in respect of the severance
package, in the event that the retrenchment became compulsory. As
Brackenridge was no longer the Bank’s
managing director, Charamba’s
letter was placed before the new managing director, Ms P Nyandoro
(“Nyandoro”), who
immediately wrote to Charamba informing him
that she would respond to his letter in due course.





6. On
24 June 2002 Nyandoro, having obviously realised that
Brackenridge had not complied with the Regulations when he purported
to retrench Charamba on 28 February 2002, wrote to Charamba as
follows:






“Please
be advised that having examined previous correspondence with regard
to your situation, I now advise that based on the provisions
of
Statutory Instrument 404 of 1990, subsections 2 and 3 (
sic)
and Statutory Instrument 252 of 1992, subsection 3(ii)(a) (
sic),
the Bank gives one month’s notice of its intention to retrench you.
The retrenchment will be with effect from 31 July
2002.





As
a continuous process, the Bank re-examined its structures and
re-organised its operations to meet the challenges of competing in
a
shrinking market with increasing players. Consequently, the post of
Assistant General Manager, Strategic Planning, could not
be
accommodated in the new structure and thus became redundant. The
Bank examined all possible areas for re-deployment within the
Bank,
in particular marketing at Corporate and Personal Banking levels and
Risk Management. It is unfortunate that the Bank concluded
that you
could not be re-deployed elsewhere in the Bank. It is therefore on
the basis of abolition of post that the Bank seeks
to retrench you.





As
required by the above-mentioned legislation, by copy of this letter
the Bank has notified the Secretary of the Retrenchment Committee
of
its intention. Appendix I, attached, gives the Bank’s
separation package for discussion and agreement, after which the
agreement will be submitted to the Retrenchment Committee for
approval as soon as possible. It is the Bank’s wish that such
negotiations
be expeditiously and amicably concluded.”






7. On 4 July 2002 Charamba
responded to Nyandoro’s letter and stated that he did not believe
that there was a genuine need
for retrenching him. He added,
however, that he was prepared to discuss the matter further with her.







8. On 9 July 2002 the Bank
held a meeting with Charamba to discuss the Bank’s offer in respect
of the severance package.
Charamba rejected the offer out of hand.







9. On 16 July 2002 Nyandoro
wrote to the secretary of the retrenchment committee as follows:






“…
The Bank, having issued the
requisite notice, a meeting was convened on 9 July 2002 to
discuss the Bank’s offer with Mr Charamba
who strongly felt
that the offer was derisory and, therefore, unacceptable.





The
Bank is, therefore, left with no choice but to seek that the
Retrenchment Committee adjudicate on the package and finalise the
matter.”






10. On 1 August 2002 the
retrenchment committee held a meeting, which was attended by the
parties, and at which the parties made
their submissions. No
minutes of that meeting were kept. However, after hearing the
submissions made by the parties, the retrenchment
committee was of
the view that the parties had not spent enough time negotiating and
trying to reach a settlement on the matter.
Accordingly, it
adjourned the meeting and directed the parties to go and negotiate
and try to reach a settlement.







11. On 5 December 2002 the
retrenchment committee held another meeting with the parties after
the parties had failed to reach
a settlement. The relevant part of
the minutes of that meeting reads as follows:






“The
parties appeared before the Retrenchment Committee in an earlier
meeting and made submissions. It was clear at that moment that
the
parties had not given enough time to negotiations. They agreed to
go back to the negotiating table. They however came back
to the
Committee after failing to reach an agreement. …





He
(i.e. Charamba) is not in total agreement with the idea of the
retrenchment, so the Committee needs to decide whether or not
retrenchment
is necessary and, if it is necessary, the size of the
package.





On
the first issue the Committee observed that Charamba has made
proposals on the retrenchment, and he must have realised that
retrenchment
was inevitable. … The Committee also observed from
the record that the relationship between the parties had deteriorated
to a
point where working together would be impossible. The
Committee decided that retrenchment should go ahead. … The
Committee
decided to recommend the following package …”.






12. On 30 January 2003 the
retrenchment committee wrote to the Minister of Public Service,
Labour and Social Welfare (“the
Minister”) recommending that
Charamba be retrenched on the basis of a certain severance package.







13. On 4 March 2003 the
Minister approved Charamba’s retrenchment, but made some
alterations to the severance package, in favour
of Charamba.







14. On 17 March 2003 the
Bank noted an appeal to the Labour Court against the severance
package, whose value the Bank considered
to be excessively high. A
few days later, Charamba filed a cross-appeal against the
retrenchment and the terms and conditions on
which he had been
retrenched.







15. On 7 February 2005, when
the parties appeared in the Labour Court for the hearing of the
appeal and cross-appeal, the Bank
withdrew its appeal stating,
inter
alia
, that as the full
severance package had already been paid to Charamba there was no
longer any need for challenging it. However,
Charamba persisted in
his cross-appeal. The matter was then argued, and the Labour Court
reserved its judgment.







16. On 13 May 2005 the
Labour Court set aside Charamba’s retrenchment on the ground that
the retrenchment had not been carried
out in accordance with the
Regulations. In its judgment the Labour Court made it clear that if
the Bank still intended retrenching
Charamba it should do so in
accordance with the Regulations.





Aggrieved
by that result, the Bank appealed to this Court.





In
my view, the Labour Court’s decision was undoubtedly correct. An
examination of the relevant provisions of the Regulations
will
indicate that that is so. I shall set out the provisions in
question
in extensio.
They are sections 3, 5, 6, 7, 8A and 10 which, in relevant part,
read as follows:





“3. (1) An
employer who wishes to retrench any employee shall –





(a) give
written notice of his intention –






(i) to the works council
established for his undertaking; or





(ii) if
there is no works council established for his undertaking or if a
majority of the employees concerned agree to such a course,
to the
employment council established for his undertaking or industry; and






(b) provide
the authority referred to in subparagraph (i) or (ii) of
paragraph (a) with details of every employee whom he wishes
to
retrench and detailed reasons for the proposed retrenchment; and





(c) send
a copy of the notice to the retrenchment committee.






Provided
that, if there is no works council or employment council established
for the undertaking concerned –






(a) the employer shall give
written notice of his intention to retrench the employees concerned
to the retrenchment committee; and





(b) the
retrenchment committee, or a person authorised thereto by the
retrenchment committee or the Minister, shall undertake the
functions
of an authority in terms of this section;






and
this subsection and subsections (2) to (6) shall apply,
mutatis
mutandis
, accordingly.





(2) An
authority to which notice has been given in terms of subsection (1)
shall forthwith attempt to secure agreement between
the employer and
employees concerned, or their representatives, as to whether or not
the employees should be retrenched and, if they
are to be retrenched,
the terms and conditions on which they may be retrenched.






(2a) Without derogation from the
generality of subsection (2), an authority shall attempt to
secure agreement on the following
matters –



(a) the possibility of
implementing measures to avoid the retrenchment of employees … .



(3) An authority shall have
regard to the factors referred to in section 7 when attempting
to secure an agreement on the matters
referred to in subsection (2).



(4) An authority shall keep
proper minutes of its proceedings and deliberations in attempting to
secure an agreement on the matters
referred to in subsection (2).


(5) …


(6) If,
within one month after receiving a notice in terms of subsection (1),
an authority has failed to secure an agreement
between the employer
and employees concerned, or their representatives, on the matters
referred to in subsection (2), the authority
shall refer the
matter to the retrenchment committee by sending the retrenchment
committee written notice … together with copies
of all documents
which the employer and employees concerned may have submitted to the
authority, and copies of the minutes of (the)
authority’s
proceedings and deliberations.


4. (1)
to (9) …


5. (1) The
retrenchment committee shall consider any matter referred to it in
terms of subsection (6) of section 3 and,
having regard to
the factors referred to in section 7, shall, within two weeks of
the matter being referred to it, recommend
to the Minister in writing
whether or not the proposed retrenchment should be permitted and, if
so, the terms and conditions upon
which it should be effected.


(2) …


(3) If
the retrenchment committee fails to make a recommendation in regard
to any retrenchment within the two-week period prescribed
in
subsection (1), the Minister shall require the committee to send
him all the documents in the matter, and shall give his
decision in
the matter as if the committee had made a recommendation in terms of
subsection (1).


6. (1) The
Minister shall consider without delay any recommendation submitted to
him by the retrenchment committee in terms of subsection (1)
of
section 5 and, having regard to the factors referred to in
section 7, shall within two weeks –



(a) approve the proposed
retrenchment, subject to such terms and conditions as he may consider
necessary or desirable to impose; or


(b) refuse
to approve the proposed retrenchment;



and shall cause the retrenchment
committee, the authority, the employer and the employees concerned to
be notified in writing …
of his decision in the matter.


(2) …


7. In
deciding whether or not to approve the retrenchment of employee(s) in
terms of these regulations, an authority, the retrenchment
committee
and the Minister shall pay due regard to the following general
considerations –



(a) that the retrenchment of
employees should be avoided so far as possible, where this can be
done without prejudicing the efficient
operation of the undertaking
in which the employees concerned are employed;


(b) that
the consequences of retrenchment to employees should be mitigated as
far as possible;



and, in particular cases, they
shall have regard to –



(i) the reasons put forward for
the proposed retrenchment; and


(ii) the
effect of the proposed retrenchment upon the employees involved,
including –



A. their prospects of finding
alternative employment; and


B. the
terminal benefits to which they will become entitled.



8. …



8A. Notwithstanding any
agreement to the contrary, no employer shall retrench any employee
unless he has given the employee not
less than one month’s notice
of the retrenchment.


9. (1)
to (3) …


10. For
the avoidance of doubt, it is declared that any purported
retrenchment of an employee which is carried out otherwise than
in
accordance with an approval granted in terms of these regulations,
shall be of no effect whatsoever.”





Before
indicating in what respects the Regulations were not complied with, I
wish to state that it appeared to be common cause that
at the
relevant time the Bank did not have a works council or an employment
council which catered for managerial employees, and that
the Bank,
acting in terms of the proviso to s 3(1) of the Regulations,
properly sent the notice of its intention to retrench
Charamba dated
24 June 2002 (“the notice”) to the retrenchment committee.





Having
said that, I proceed to deal with the failure to comply with the
peremptory provisions of the Regulations. There were a
number of
respects in which the Regulations were completely ignored.





In
the first place, the retrenchment committee did not appreciate that
when it received the notice the retrenchment committee, or
a person
authorised thereto by the retrenchment committee or the Minister, was
obliged to undertake the functions of an authority
in terms of s 3(1)
of the Regulations, because the Bank did not have a works council or
an employment council which catered
for managerial employees.





In
terms of s 3(2) of the Regulations, after receiving the notice
the retrenchment committee, acting as the authority in terms
of
s 3(1) of the Regulations, was obliged to “forthwith attempt
to secure agreement” between the Bank and Charamba, as to
whether
or not Charamba should be retrenched and, if he was to be retrenched,
the terms and conditions on which he was to be retrenched.





In
my view, it is clear from the wording of s 3(2) of the
Regulations that the authority is obliged to play an active rôle,
and not a passive one, in attempting to secure an agreement between
the parties concerned. Its rôle is that of a mediator, i.e.
a
person who tries to get an agreement between parties disagreeing with
each other.





As
already stated, the minutes of the meeting of the retrenchment
committee held on 5 December 2002 indicate that when the
retrenchment committee held its first meeting with the parties on
1 August 2002, the retrenchment committee formed the opinion
that the parties required more time to negotiate a settlement, and
therefore directed them “to go back to the negotiating table”.

There is no evidence in the minutes which shows that the retrenchment
committee attempted to secure an agreement between the parties
on the
issues in question. The same applies to the meeting held on
5 December 2002.





In
the circumstances, the retrenchment committee, acting as the
authority in terms of s 3(1) of the Regulations, did not do
what
it was obliged to do in terms of s 3(2) of the Regulations.





Secondly,
after receiving the notice, the retrenchment committee was obliged to
act forthwith. In
Standard
Chartered Bank Zimbabwe v Matsika

1996 (1) ZLR 123 (S), this Court considered the meaning of the word
“forthwith”. At 131 C-E GUBBAY CJ said:






“It
seems to me beyond question that having suspended Matsika without pay
and other benefits on 3 August 1992 the Bank, either
by design
or oversight, failed to apply
forthwith
to a labour relations officer. The word ‘forthwith’, though not
as peremptory as ‘immediately’, means ‘as soon as is
reasonably
possible in the circumstances’. See
R
v West & Wild
1953
SR 199, 1953 (2) SA 677 (SR) at 677-678;
Sleightholme
Farms (Pvt) Ltd v National Farmers’ Union Mutual Ins Soc Ltd

1966 RLR 467 (G) at 471 H-I;
Zulu
v Sterling Products International Ltd

1988 (2) ZLR 110 (H) at 114 
in
fine
– 115A. The
delay of six weeks between the suspension and the application
rendered the suspension inoperative.”





In
the present case, assuming that the notice was received by the
retrenchment committee on 24 June 2002, the retrenchment
committee delayed for about thirty-seven days before holding its
first meeting with the parties on 1 August 2002. In my view,
and applying the meaning of the word “forthwith” set out in the
Standard Chartered Bank
case
supra,
the retrenchment committee did not act forthwith as it was obliged to
do in terms of s 3(2) of the Regulations.





Thirdly,
in terms of s 3(2a) of the Regulations the retrenchment
committee, acting as the authority in terms of s 3(1)
of the
Regulations, was obliged to attempt to secure agreement on the
possibility of implementing measures to avoid Charamba’s
retrenchment. There is nothing in the minutes of the meeting held
on 5 December 2002 indicating that this peremptory provision
was
complied with.





Fourthly,
in terms of s 3(3) of the Regulations the retrenchment
committee, acting as the authority in terms of s 3(1)
of the
Regulations, was obliged to have regard to the factors referred to in
s 7 of the Regulations when attempting to secure
an agreement on
whether or not Charamba was to be retrenched. Once again, there is
nothing in the minutes of the meeting held on
5 December 2002
which indicates that the retrenchment committee complied with this
peremptory provision.





Fifthly,
in terms of s 3(4) of the Regulations the retrenchment
committee, acting as the authority in terms of s 3(1)
of the
Regulations, was obliged to keep proper minutes of its proceedings
and deliberations in attempting to secure an agreement
on whether
Charamba was to be retrenched and, if so, the terms and conditions on
which he was to be retrenched. It was common cause
that no such
minutes were kept in respect of the meeting held on 1 August
2002.





Sixthly,
in terms of s 3(6) of the Regulations, after receiving the
notice the retrenchment committee had only one month within
which to
secure an agreement between the parties. If it failed to secure an
agreement within that period, it had another two weeks,
in terms of
s 5(1) of the Regulations, within which to recommend to the
Minister in writing whether or not Charamba’s retrenchment
should
be permitted and, if so, the terms and conditions on which it was to
be effected.





The
retrenchment committee, therefore, had a total of six weeks before
recommending to the Minister whether or not Charamba should
be
retrenched and, if he was to be retrenched, the terms and conditions
of such retrenchment.





Assuming
that the retrenchment committee received the notice on 24 June
2002, the last day on which the retrenchment committee
could have
recommended to the Minister in writing whether or not the proposed
retrenchment of Charamba should be permitted was 5 August
2002.
The appeal record indicates that the retrenchment committee did not
meet that deadline. Instead, it was on 30 January
2003, nearly
six months after the deadline, that the retrenchment committee
recommended to the Minister that the proposed retrenchment
should be
permitted. The peremptory provision in s 5(1) of the
Regulations was not, therefore, complied with.





Seventhly,
in terms of s 5(2) of the Regulations if the retrenchment
committee failed to make a recommendation to the Minister
on the
proposed retrenchment of Charamba within the two week period already
referred to, the Minister was obliged to require the
retrenchment
committee to send him all the documents in the matter in order for
him to determine whether or not the proposed retrenchment
should be
permitted. Once again, this peremptory provision was not complied
with.





Finally,
in terms of s 6(1) of the Regulations the Minister is obliged to
consider, without delay, any recommendation on retrenchment
submitted
to him and, within two weeks, to approve or refuse to approve the
proposed retrenchment. According to the record before
this Court,
the recommendation made to the Minister on 30 January 2003 was
approved by the Minister on 4 March 2003, long
after the
expiration of the two week period.





There
were, therefore, many respects in which the peremptory provisions of
the Regulations were completely ignored. It follows
that Charamba’s
retrenchment was not carried out in terms of the Regulations, and
that in terms of s 10 of the Regulations
the purported
retrenchment is of no effect whatsoever.





In
the circumstances, the appeal is dismissed with costs.








CHIDYAUSIKU
CJ: I agree.








CHEDA
JA: I agree.








Atherstone
& Cook
,
appellant's legal practitioners


Dube,
Manikai & Hwacha
,
respondent's legal practitioners