Court name
Supreme Court of Zimbabwe
Case number
SC 21 of 2007
Civil Application 296 of 2006

Thomas Meikles Stores v Mwaita and Another (96/06) (SC 21 of 2007, Civil Application 296 of 2006) [2007] ZWSC 21 (07 October 2007);

Law report citations
Media neutral citation
[2007] ZWSC 21






DISTRIBUTABLE
(24)









Judgment No. SC 21/07



Civil Application No. 296/06








THOMAS
MEIKLES STORES v (1) DORRIS MWAITA (2)
STELLA PHIRI








SUPREME
COURT OF ZIMBABWE


MALABA JA, GWAUNZA JA &
GARWE JA


HARARE, FEBRUARY 12 &
OCTOBER 8, 2007










L Mazonde, for the appellant


O Takaindisa,
for the respondents









GWAUNZA JA: The Labour Court upheld an arbitration award in terms
of which the appellant in casu was ordered to reinstate the
respondents without loss of salary or benefits, or, in lieu
thereof, pay them damages. The appellant was aggrieved at the
decision of the court a quo and has now appealed to this
Court.





The facts of the
matter are not in dispute. The two respondents, who were employed by
the appellant as buyers, were advised through
an identical letter
dated 30 September 2004 that:




  1. the appellant had been forced, due to the economic downturn, to
    restructure various management positions and responsibilities;



  2. as a result the respondents’ buying responsibilities had been
    re-allocated to other buyers, thereby reducing the number of buyers
    employed by the Central Buying Office;



  3. the respondents were being given the opportunity each to move to a
    position of section manager in one of the appellant’s departmental
    stores, with effect from the following day, i.e. 1 October 2004; and



  4. the respondents’ salaries would remain the same even though the
    new positions did not require the allocation of a motor vehicle,
    meaning the respondents would not be entitled to one.








The letter went on to state that should the respondents not wish to
take up the offer, the appellant was prepared to award them an
exit
package whose details were specified in the letter. The appellant in
the same letter also asked the respondents to report for
work the
following day, 1 October 2004, to take up their new assignments, or
indicate if they wished to opt for the exit packages.
The letter
ended by stating that if the two did not report for duty on 1
October, 2004, it would be taken that they had opted for
the exit
package.





The respondents did not
report for work on the 1st of October, 2004, but addressed
identical letters to the appellant on 4 October 2004. In the letters
the respondents rejected both
the offer of re-assignment and the exit
package, alleging that both violated the relevant provisions of the
Labour Relations Act.
In the respondents’ view, the post of
Section Manager was an undeserved demotion, while the exit package
was ‘paltry’ and
not in line with current market trends. The
respondents made it known to the appellant that they preferred a
‘negotiable and reasonable’
retrenchment/exit package that was in
line with the Labour Relations Act.





In the appellant’s
response to the respondents’ letters, dated 6 October 2004, the
Group Merchandise Manager, Mr SD Mesham (“Mesham”)
informed the
respondents that they had not been dismissed, nor retrenched, so were
still employed by the appellant. They were therefore,
expected to
report for work on 7 October 2007 to take up their re-assignments.
Mesham then invited the respondents to contact the
Group Labour
Relations Manager for any further amplification of the legal aspects
of their situation.





The respondents duly
met with the Group Labour Relations Manager, Mr Chigwedere
(“Chigwedere”) on 9 October 2004. They thereafter
communicated
to Chigwedere what they considered to be an acceptable exit package
for them. The appellant rejected the respondents’
proposed exit
package and addressed letters to them, reiterating its position that
the two were still employees of the appellant.
The respondents were
also informed that the original positions offered to them as Section
Managers were still open to them. The
two were, again, invited to
come to work, and were given a new date for it, that is 19 October
2004.





In relation to the exit
package, the appellant wrote as follows in the same letter:









“The exit package was an available alternative in the event of you
thinking otherwise. It was not the intention of Thomas Meikles
to
offer you an exit package as a first option, hence we are not
prepared to shift from our original position in our letter of 30
October 2004.”






The respondents took
a very dim view of the contents of this letter and in their response
dated 21 October, 2004 used strong language
to register their
disgruntlement. The appellant took exception to the language
employed in the respondents’ letters and also their
refusal to
report for work as directed. It therefore instituted disciplinary
proceedings against them for -




  1. absence from work for more than five or more working days without
    leave for no reasonable cause;



  2. an act, conduct or omission inconsistent with the fulfillment of the
    express or implied conditions of their contract in that they
    addressed letters to it dated 21 October 2004, whose contents the
    appellant described as ‘insubordinate, threatening and
    defamatory’.








The two were found guilty as charged and were suspended from duty
with effect from 26 October 2004 without pay and benefits, pending
a
disciplinary hearing to be held on 25 November 2004. The hearing was
duly held with the outcome that the respondents were given
a final
warning in respect of the first offence, and had the penalty of
dismissal imposed in respect of the second.


After the respondents
filed a notice of appeal to the Labour Relations Office, an attempt
was made to have the dispute resolved through
conciliation. When
this failed, the parties agreed to submit the dispute to compulsory
arbitration in terms of the Labour Relations
Act. It is the award
that the arbitrator made in this respect that the appellant appealed
against to the Labour Court.






In casu,
the appellant’s grounds of appeal are that the court a quo
erred and misdirected itself in finding -




  1. that the appellant’s conduct of offering the respondents
    alternative positions following the abolition of respondents
    positions
    was unlawful;



  2. that having rejected the exit package offered to them, the
    respondents were entitled to reject the alternative position
    offered;



  3. that the respondents’ conduct of authoring a letter derogatory of
    the appellant was induced by the appellant’s conduct; and



  4. that the respondents had been constructively dismissed.








The appellant also charges that the court a quo erred in
ordering the reinstatement of the respondents to positions that no
longer existed in the appellant’s organization.





I will consider, first,
the appellants ground of appeal relating to the court a quo’s
findings that the respondents had constructively been dismissed. It
is pertinent in this respect to note that, on the evidence before
the
court, the respondents are of the view that they were dismissed twice
by the appellant. The appellant, on the other hand, maintains
that
the respondents were only dismissed once, that is, after disciplinary
proceedings had been taken against them.





For convenience only, I
shall refer to these episodes as the respondents’ first and second
dismissals.






‘First
Dismissal’


It is not in dispute
that by its letter of 30 September 2004, the appellant, in
categorical terms, gave the respondents two choices,
to accept either
demotion by a certain date or a pre-determined exit package. The
tone of the letter suggests there was to be no
negotiation over the
two choices given to the respondents. That this was the intended
import of the appellant’s letter is left
in no doubt when regard is
had to its closing paragraph, which read as follows:



“If you do not report for duty on 1st October, 2004 I
will take it that you have opted for the exit package.”









It is accordingly contended for the respondents that, since they did
not report for work on 1 October 2004, the only correct position
flowing from the letter is that the respondents were deemed to have
been dismissed, ‘subject only to the fact that they were further
deemed to have accepted the exit package’.





The respondents’
counsel, Mr Takaindisa, urged the Court in the light of this
assertion, to find that, after the respondents’ non-compliance with
the appellant’s ultimatum,
the employment relationship was
terminated.





The court a quo
was persuaded by this argument and found that the appellant had, by
its conduct, repudiated the respondents’ contracts. This finding,
and the reasoning behind it as contained in the judgment of the court
a quo, in my view cannot be faulted.





There is no doubt that,
by any rules of interpretation, the appellant’s letter to the
respondents of 30 September 2004, gave them
only two choices, to
accept demotion and start work on the 1 October, 2004, or the
unilaterally pre-determined exit package. As indicated,
the
respondents did not report for work on 1 October 2004. Going by its
letter of 30 September 2004, one would have expected the
appellant to
henceforth ’take it’ that the two opted for the exit package.
One would have expected the appellant to take this
stand even though
the respondents had indicated they might reject the proposed
pre-determined exit package in preference for a negotiated
one. This
was, however, not to be. Instead, the appellant’s response was to
literally turn a deaf ear to the respondents’ categorical
rejection
of the proposed demotion. The respondents had, in no uncertain terms,
stated in writing that they strongly objected to,
and were rejecting,
the proposed re-assignment of duties.







Responding as if the respondents had not rejected the two options it
offered them, the appellant twice asked them to report for work
on
given dates, to take up the very posts they had rejected. This was
because, the appellant stated, the respondents had ’neither
been
dismissed nor retrenched’, but were still its employees. This
apparent about turn on the part of the appellant is, in my
view,
difficult to understand, given its position as so clearly enunciated
in its letter of 30 September 2007. Even more incomprehensible
was
the appellant’s insistence that, by asking the respondents to
report for work and take up the posts they had rejected, it was
in no
way deviating from its originally stated position, but was simply
’re-stating’ the essential features of the letter of
30 September
2004. The letter of 30 September 2004 quite clearly made no mention
of the fact that the respondents would remain employees
of the
appellant, and therefore obliged to take up the reassignments imposed
on them, even if they rejected the two options offered
to them.
Rather than re-state the position outlined in its letter of 30
September 2004, the appellant, it appears, was in fact,
pronouncing a
shift in its original position.





In short the appellant
was attempting to force the respondents to accept demotion under the
guise of ’reassignment’. This is evidenced
by its response to the
respondents’ counter-proposal for an exit package, contained in the
appellant’s letter of 15 October 2004,
which I have already alluded
to above. In other words, it was the appellant’s position that the
respondents, once they rejected
the proposed demotion, had no other
alternative but to accept the pre-determined exit package. When they
refused to take up the
alternative option, the appellant’s
intention, as is now evident, and contrary to the specific wording of
its letter of 30 September
2004, was to nevertheless force them to
accept the demotion. In so doing, the appellant, as correctly noted
by the court a quo, was not only repudiating the respondents’
original contracts of employment, it was also making it intolerable
for the respondents
to continue working for it.





That the appellant
repudiated the respondents’ contracts of employment, in my opinion,
cannot be disputed. The learned author,
D J Joubert in his book
General Principles of the Law of Contract 1 ed at p 211
defines repudiation in these terms;



“But, analysed to reveal its essentials, a repudiation is nothing
more than an intentional communication by the debtor of the statement
that he is not going to perform.”







Performance by the appellant, in casu, would amount to
it allowing the respondents to keep their jobs as buyers for the
appellant. The statement communicated to the respondents
through the
appellant’s letter of 30 September 2004, was that the appellant had
abolished their posts and therefore made it impossible
for the
respondents to perform their side of the contract. In its subsequent
letters to the respondents, the appellant reiterated
that it stood by
its letter of 30 September 2004, and demanded that the respondents
report for work, not as buyers, but as Section
Managers. Had the
appellant invited the respondents to go back to work as buyers, one
might have considered that it intended to withdraw
the repudiation.
However, rather than reverse its repudiation of the respondents’
contracts of employment, the appellant’s letters
in effect
re-emphasised it in different terms.





The respondents were
therefore correct in alleging, and the court a quo in finding,
that the appellant had repudiated their contracts of employment. The
respondents had served the appellant for respective
periods of 17 and
27 years. These periods are not insignificant. It has not been
alleged that there were any adverse reports concerning
their work
performance. That being the case, the respondents had not done
anything to warrant what amounted to summary dismissal.
Their
request for a negotiated exit package was under these circumstances,
in my view, not unreasonable.





What falls to be
determined, then, is the nature and legal effect of the respondents’
response to the repudiation of their employment
contracts. Joubert,
in the same book referred to above, at pp 212 to 213, variously
stated as follows in this respect:



“As is the case where the debtor commits some other form of breach
of contract, the repudiation doest not as such bring an end
to the
contract.” [See, among other authorities, Gilchrist & Co v
Stone
(1889) 5 HCG 353]. It only gives rise to legal remedies.”






Later on the learned
author wrote –



“The paramount right flowing from the repudiation is the right to
accept the repudiation and to cancel the contract [Gilchrist’s
case supra]… Upon cancellation, the respective duties
of the parties to perform come to an end. Each may recover his own
performance. The
debtor who had repudiated the contract will in
addition be liable to compensate the damages of the creditor…”






On the authority of
these statements of the law, it is evident that the respondents’
contracts of employment were not brought to
an end by the mere fact
of their repudiation by the appellant. The contracts, in my view,
came to an end when, by their conduct,
the respondents effectively
cancelled them. This they did, in the first place, by not insisting
that the appellant reinstate them
to their previous positions as
buyers, secondly, by not accepting demotion and reporting for duty,
and thirdly, by demanding that
they be paid a negotiated exit package
(in effect, “compensation of damages”) as calculated by them.





Alternatively, because
the appellant made it impossible for the respondents to go back to
work as buyers (having abolished their posts)
and went on to insist
they take up inferior positions, the two were forced by the appellant
to cancel their contracts of employment.
It is argued for the
respondents that this amounted to their constructive dismissal. The
court a quo described such dismissal as unfair dismissal of
the two respondents. The court relied for this on s 12(B)(3)
of the Labour Relations Act which stated :



“(3) An employee is deemed to have been unfairly dismissed






  1. if
    the employee terminated the contract of employment with or without
    notice because the employer deliberately made continued employment
    intolerable for the employee.”








It was submitted for the respondents, in my view correctly, that it
would have been humiliating for them to go back to work for the
appellant, in inferior posts to the ones they occupied. Thus,
whether it was constructive or unfair dismissal, by the appellant,
there is no denying that the respondents were dismissed from their
employment.







The events outlined above, it is pertinent to note, happened before
the respondents wrote the letter (dated 21 October 2004) that
the
appellant found so offensive that it was moved to institute
disciplinary proceedings against them.






‘Second
Dismissal’



This brings me to the issue of the respondents’ ‘second
dismissal’. It is argued for them that after the respondents’
non-compliance
with the appellant’s ultimatum, the employment
relationship was thereby terminated. Further that, given this
circumstance, it
was ‘inappropriate’ to resort to disciplinary
procedures that are intended to regulate relationships between
employees and employers.





This argument clearly
has merit. Since, as I have found, the employment relationship
between the parties was terminated in the manner
indicated, it was
clearly no longer open to the appellant to seek to discipline the
respondents for conduct that took place after
such termination. As
is now evident, events prior and up to the alleged acts of misconduct
had effectively placed them beyond the
reach of such proceedings.





This court’s finding
in relation to the ‘second dismissal’ of the respondents makes it
unnecessary to consider the appellant’s
ground of appeal concerning
the court a quo’s finding on what the appellant refers to as
the ‘derogatory letter’ of 21 October 2004, authored by the
respondents.





The finding concerning
the termination of the respondents’ contracts of employment,
disposes of the appellant’s first, second
and fourth grounds of
appeal.





The last ground of
appeal charges that the court a quo erred in ordering
reinstatement of the respondents to positions that no longer existed
in the appellant’s organization. I find
no merit in this ground of
appeal. The dispute went to the court a quo on appeal. At the
conclusion of the appeal hearing, the Court was obliged to uphold the
appeal, dismiss it or make any other order
it considered appropriate.
The court found no merit in the appeal and properly dismissed it.
The effect of such dismissal was to
re-reinstate the arbitrator’s
determination. No misdirection can therefore be attributed to the
court a quo for the dismissal.





Likewise, the appeal
now before us, given the foregoing, will not succeed. The result is
that the arbitrator’s determination has
final effect in this
dispute. That determination clearly stated that if the
re-instatement of the respondents was no longer an option,
the
appellant would be obliged to pay the respondents their damages in
lieu of reinstatement. The arbitrator’s determination is
thus
capable of enforcement, one way or the other.





In the result, the
appeal is dismissed with costs.





MALABA JA: I agree.







GARWE JA: I agree.







Atherstone & Cook, appellant’s legal practitioners



Musunga & Associates, respondents’ legal practitioners