Labour Law
Labour Law
THE EMPLOYMENT
CONTRACT
TAKUDZWA RUSIKE
TIRIVASHE NYAKUDYA
JOSEPH MATANDA
PROVIDENCE MUGAYI
ASHLEY WASHINYIRA
DEFINITION
• When an employee’s contract with a company ends,
whether voluntarily or involuntarily, it is referred to as
termination of employment. Both common law and
statutes are used in this process. Generally speaking, in
the absence of a clear statutory provision to the contrary,
the common law is applicable in issues concerning
termination.
• It is the process of ending a contract or agreement. This
can occur due to breach of contract, mutual agreement,
notice of termination etc
Termination under common law
An employment relationship terminates naturally in terms of the common law, in the
following ways:
Termination by mutual agreement
• The start of the employment relationship is based on agreement and therefore the
parties can also agree to terminate the contract. Termination of an employment
contract by mutual agreement does not constitute a dismissal, but there must be
genuine agreement to terminate.
Upon completion of the specific task or expiry of a fixed-term period
• At the time an employer and employee enter into a contract of employment, they can
agree that the employment relationship will be for a fixed period or upon completion of
a specific task. For example, if an employee agrees to a two-year contract, when the
two years are complete, the contract comes to an end.
CON’T
Supervening impossibility of performance
• The general rule of the law of contract is that where performance has become impossible due
to a vis major or accident/chance, the contract is terminated. Examples include:
(1) Illness – where the employee’s absence becomes unreasonably long the employer has the right
to terminate the contract. Girjac Services (Pvt) Ltd v Mudzingwa 1999 (1) ZLR 243 (S) held that
incapacity is not a breach of contract. Nonetheless, the fact that the employee is incapacitated by a
cause beyond his control by an act of God, if you like does not deprive the employer of the right to
terminate the contract where the absence was unreasonable.
(2) Death – if an employee dies the contract is automatically cancelled, however, if the employer
dies the contract still stands and the estate has the liability to pay remuneration to the employers.
(3) State action – if an employee is sentenced to a prolonged period of imprisonment, the
employer could terminate his or her contract.
CON’T
Insolvency or liquidation
• If an employer is liquidated, an employee’s contract would be automatically terminated on the
date of the liquidation. The employee would have a right to claim common law damages for
losses caused by the termination, but these must be claimed from the insolvent estate
(individuals) or liquidated estate (juristic persons). Section 103 of the Insolvency Act [Chapter
6:04] provides that Employees are given preference in respect of unpaid wages.
Constructive dismissal
• Constructive dismissal occurs when an employee resigns due to the employer;s conduct, which
renders continued employment intolerable. This concept allows the employee to treat their
resignation as a dismissal. In Mudakureva v Grain Marketing Board the Supreme Court
recognized constructive dismissal as part of common law. The employee resigned after being
informed of impending dismissal, asserting that he was forced to resign. The court emphasized
that resignation could be seen as constructive dismissal if it was a reaction to the employer;s
repudiatory conduct.
CON’T
Summary Dismissal
• Employers can terminate an employment contract summarily for serious
misconduct without notice, such as insubordination or negligence. In
National Foods Ltd v Masukusa the court ruled that wilful disobedience to
lawful orders or serious misconduct justifies summary dismissal. It
clarified that the employer must justify the dismissal. A wrongful summary
dismissal does not automatically terminate the contract. The employee can
choose to accept the breach and sue for damages or reject it and continue
the contract. Thomas Meikles Stores v Mwaita & Anor the Supreme
Court ruled that the contract remains valid until the employee chooses to
affirm or cancel it based on the employer's conduct.
CON’T
Resignation of an employee
• Resignation is when the employee decides to end the
employment relationship. An employee is required to give
an employer notice that s/he intends to resign. A voluntary
resignation is where the employee intends to terminate the
employment relationship of his/her free will. Where an
employee is forced to resign because the employer made
continued employment intolerable, this could amount to a
dismissal. This is known as a constructive dismissal.
Termination of probationary contract
• The common law has two ways of terminating a probationary contract. The first one is allowing
the contract just like any other fixed term/ duration contract to automatically lapse and not
renew it. The second is where termination takes place before the end of the probationary
period. The common law allows the dissatisfied employer to terminate the contract giving a
requisite notice to the employee. The notice period is that specified in the probationary
contract. There must be evidence that the employer implemented assessments during the
probationary period.
• In Gumbo v Air Zimbabwe (Pvt) Ltd the probationary employee’s contract was terminated 26
days after the end of the probationary period. The employee argued that the delay in deciding
whether or not to confirm the contract of employment was an implied confirmation. This was
rejected by the court which insisted that on the facts, the contract was deemed to have
terminated on the expiry of its duration. This position of the court was influenced by the fact
that the employer’s dissatisfaction with the employee’s performance was evident on the papers
and it never contemplated giving the employee a second chance.
FAIR DISMISSAL
(concept of unfair dismissal)
• Dismissal refers to termination of a contract for an employee for breach of the
employment contract.
• section 12B of the Labour Act, guarantees every employee the right not to be
unfairly dismissed. An employee is considered unfairly dismissed if the employer
cannot prove that the dismissal adhered to an employment code or, in the
absence of such a code, complied with the model code specified in section 101(9).
Additionally, an employee is deemed unfairly dismissed if they resign due to the
employer making their continued employment intolerable, or if, upon the
termination of a fixed-duration contract, they had a legitimate expectation of re-
engagement but were replaced by another person.
• If dismissal is not procedurally and substantively done fairly it is considered
unfair dismisaal.
CON’T
• There are four circumstances specified in section 12B in which a dis- missal is automatically
unfair:
• If there is a registered code of conduct and the dismissal for misconduct is not in terms of
that code.53
• If, in the absence of a registered code of conduct, the dismissal for misconduct is not in
terms of the model code made in terms of section 101(9) of the Act.
• Constructive dismissal arising from an employee terminating the contract of employment
because of the employer’s con- duct.
• Constructive dismissal arising from the non-renewal of a fixed-term contract.
• If a dismissal is automatically unfair, the employee is regarded as hav- ing been unfairly
dismissed. The termination of employment is thereby unlawful. In all the four circumstances of
automatically unfair dismiss- als, the onus is on the employee to prove that the circumstances fall
with- in the scope of the relevant provisions of the Act.
CON’T
• Termination of Employment Convention 158 of 1982. Unfair dismissal under the Convention has two
dimensions: the employer must have a fair reason to terminate employment (substantive fairness), and
in terminating employment the employer must follow fair pre-dismissal procedures (procedural
fairness)
• fair dismissal must be both substantively and procedurally fair. Substantive fairness has two
components. The first is that there must be a reason for the dismissal. If there is no reason at all, the
dismissal is on that score alone unfair. Where the reason given is not genuine, there is no reason at all.
This is so in cases where the employer dismisses for no reason but hunts around for a reason to justify
it. The reason must exist at the time of the dismissal. The onus is on the employer to prove a reason for
the dismissal. The second aspect of substantive fairness only arises after a reason has been established;
it is to ask and answer the following question: was it reasonable to dismiss for that reason? For
substantive fairness, this question must be answered in the affirmative. If not, the dis- missal is unfair.
A finding of whether or not it was reasonable to dismissfor the reason given is a finding of fact.
• Procedural fairness requires, at its centre, respect for the principle of natural justice. The employee,
prior to the dismissal, must be afforded an opportunity to request the employer’s reasons for the
dismissal and if he or she so wishes to challenge it.
• The first circumstance is of matters not covered by either a registered code of conduct or the model
code. By definition, an employment code of conduct only covers matters of misconduct. If a dismissal
does not involve misconduct, it cannot be dealt with in terms of a code of con- duct.67 In the absence of
a registered code of conduct, dismissal must be in accordance with the model code. However, the
model code does not cover every dismissal ‘in the absence’ of a registered code of conduct. The model
code only deals with dismissals for a misconduct specified in its section.
Dismissal for health reasons
• Section 14(4) of the Act permits an employer to terminate the employment of an employee who has
exhausted the sick leave prescribed in the Act or in the contract of employment if this is more
favourable. This termina- tion must be fair and must comply with section 12B(1).
• The questions to ask and answer are: Is the employer reasonably expected to wait any longer? If so,
how much longer? If the employer is not reasonably expected to wait any longer, dismissal is fair. In
answering these questions, procedural fair- ness comes into play. The employer must make informed
decisions based on proper medical information and the employee must be consulted and his or her
views fully considered
• In Zimasco (Pvt) Ltd v Maynard Marikano it was argued that section 14(4) gives the employer an
absolute right to elect to terminate the employment of the employee who has exhausted the maximum
sick leave period specified in the Act. It was further argued that the right to terminate is not subject to
compliance with any particular procedures. This was rejected by the Supreme Court. Garwe JA said
Since the decision to terminate an employment contract has far reaching consequences, one should
assume that before such a decision is taken the employer would be obliged, at the very least, to advise the
employee of the fact that he has taken the sick leave contemplated in s14(4) and that for that reason it is
intended to terminate his contract of employment in terms of that section on a date specified in such notice
unless the employee returns to work before the expiration of the specified period. In my view it would not
be proper for an employer to invoke the provisions of s14(4) of the Act and, without notice to the
employee, proceed to terminate his contract of employment. In short, the audi alteram principle would still
need to be respected and failure to do so would render any such termination null and void.
FIXED TERM CONTRACT
• It is the process of ending a contract that has a specif start and end date.
• Under this contract there is termination by
1. mutual consent where the parties agree to terminate the contract 2
2. Termination due to the other party’s breach of the contract or non
performance
3. Expires automatically at the end of its specified period or performance of
task. No notice or reason is required.
In chikonye & anor v Peter house school 1999 the court upheld the
termination of employment of two teachers without ministerial approval when
their fixed term contract came to an end.
TERMINITION ON NOTICE
• General meaning of termination of contract
• Termination on notice is when an employer ends an
employment or contractual relationship with an employee by
providing advance notice. The party who is ending the
relationship is usually required to provide a specified period of
notice to the other party. This allows both parties to prepare for
the end of the relationship and make necessary arrangements.
The employee is expected to continue working and fulfilling
their obligations until the termination becomes effective.
CON’T
• Madhuku page 92 adds on to say;
A contract of employment may be terminated by the giving of notice. Where the period of notice is
not specified in the contract, reasonable notice must be given. In practice, the period of payment of
wages determines the reasonableness of notice. The employer can terminate the contract for any
reason or even for no reason and has no obligation either to reveal the reason for dismissal, or to
justify it. An employer is entitled to pay an employee in lieu of notice, thus terminating the contract
with immediate effect. Notice is a unilateral act that does not require acceptance and cannot be
withdrawn without agreement.
• In Lever Brothers (pvt ) ltd v Marafuzah & ors , the court upheld the dismisaal on notice of
employees on a short term contract because the terms of the contract expressly provided that it
it may be terminable on 24 hour notice .
RETRENCHMENT
• Retrenchments belong to the class of termination of employment
commonly described as ‘economic dismissals.’
• This class is distinctive in that on one hand, workers lose their jobs
without any fault (such as misconduct) or other reason (such as through
the operation of the contract of employment) attributable to them on
the other hand, the employer may be compelled by unavoidable
economic considerations to terminate the services of some workers.
• It is also important to emphasize that while a retrenchment is merely
one of the forms of termination of employment, its social, economic and
political ramifications tend to be of a greater scale than other forms
What is retrenchment?
• The labour act has it that in relation to an employee, means terminate the employee’s
employment for the purpose of reducing expenditure or costs, adapting to technological
change, reorganising the undertaking in which the employee is or was employed, or for
similar reasons and includes the termination of employment on account of the closure
of the enterprise in which the employee is employed.
• What makes a termination a ‘retrenchment’ is the reason for it. If the reason for a
termination is one of those specified in the definition, that termination is a
retrenchment within the scope of the Labour Act. It would appear that the reference in
the definition to the ‘purpose of reducing expenditure’ means that an employer may
retrench simply to increase profits.
• it is permissible for a court to go behind the purported reasons given by an employer if
there is a basis to suspect that the employer is seeking to circumvent retrenchment law.
CON’T
• Mutare Board & Paper Mills (Pvt) Ltd v Kodzanai. In that case, the
employer, after deciding to reduce its workforce as a cost-cutting measure,
resorted to its pension fund regulations and retired all its male employees
who were 55 years of age or over. This was challenged by one of the
employees who filed a High Court application arguing that the so-called
early retirement was for all intents and purposes a retrenchment and thus
sought an order declaring the process invalid for failing to comply with the
Retrenchment regulations. The Supreme Court agreed. It held that
although an employer has a right to resort to
termination by retirement, this right does not exist where the effect of the
employer’s action is to retrench.
Retrenching five or more employees within six months
• The main effect of section 12C is to impose a mandatory procedure for the retrenchment process. The
Supreme Court has held, emphatically, that any purported retrenchment not in compliance with the
Act is null and void. In Chidziva & Ors v Zisco, Muchechetere JA expressed this as follows: In the
circumstances, I agree with the submission that the retrenchment exercise was improper. It was
carried out in contravention of the provisions of the said Regulations. It was therefore illegal and void.
The process involved in retrenchment is as follows:
1. The employer wishing to retrench must first give written notice of the intention to
• retrench to either the works council or, where there is no works council, to the employment council.
2. The written notice is required to give details of the reasons for the retrenchment and the names of all
employees being proposed for retrenchment.
3. The notice must be given by the employer.
4. On receipt of the notice from the employer, the authority in question (works council, employment
council, Retrenchment Board or person appointed by the Retrenchment Board as the case may be) is
required, within a maximum period of one month, to ‘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’.
CON’T
• Voluntary Retrenchment
At strict law, there is no such thing as a voluntary retrenchment. Every
retrenchment must comply with the procedures set out in legislation. Public
policy requires that agreements on retrenchments be genuine and transparent.
For that reason, where there is an agreement involving five or more employees it
must be approved by a third party (the works council) and a copy sent to a
governmental body (the Retrenchment Board). An agreement involving less than
five employees must, at the very least, be sent to the Retrenchment Board. What
exists under the law is termination by mutual agreement. As already discussed,
the agreement must be real. The so-called ‘voluntary retrenchments’ which
survive legal scrutiny, are those which succeed in being characterized as
termination by mutual agreement.
CON’T
May an employer decide not to proceed with an agreed or approved retrenchment?
• Three different scenarios mark the completion of a retrenchment process in
terms of legislation:
• 1. approval by the works council of an agreement between the employer and the
employees concerned in terms of section 12C(3);
• 2. approval by the Minister of the proposed retrenchment in terms of section
12C(9)(a);
• 3. an agreement signed by the employer and all the employees concerned and
sent to the Retrenchment Board in terms of section 3(7) of SI 186/2003 in
retrenchments of less than five employees.
EMPLOYMENT CODES
The system of codes of conduct was introduced by the Labour Relations (Employment
Codes of Conduct) Regulations, S.I. 379 of 1990
The essential character of the new regulations was to restore to employers their old
power of dismissal, but subject to some controls consistent with the barest tenets of
procedural and substantive fairness.
The main significance of a registered code of conduct is that in terms of section 12B(2),
a dismissal is automatically unfair if the employer fails to show that the dismissal was in
terms of the registered code of conduct
There are only two types of codes of conduct: an employment council code of conduct
and a works council code of conduct.
There are only two types of codes of conduct: an employment council code of conduct
and a works council code of conduct.
Application and status of codes of
conduct
• Proceedings under employment codes receive an exalted position under the Labour
Act.
Dismissal under a registered employment code is deemed fair dismissal in terms of s 12B
• (2) (a) which provides: “An employee is unfairly dismissed – (a) If, subject to subsection
(3),the employee fails to show that he dismissed the employee in terms of an
employment code; or” Section 5 of S.I. 15 of 2006 further stipulates that no employer
shall terminate a contract of employment unless - “the termination is, in terms of an
employment code which is registered in terms of s 101 (1) of the Act;”
• The provisions of a code apply both to disputes of misconduct as well as grievance
disputes Chubb Union of Zimbabwe (Pvt) Ltd v Chubb Union Workers Committee
CON’T
• There are various circumstances when an employment code may not apply or is ousted:
If a matter is not determined within 30 days of the date of notification of proceedings, “the
employee or employer concerned may refer such matter to a labour officer, who may then
determine or otherwise dispose of the matter” under their normal jurisdiction – s 101(6). In
Marimo v National Breweries S-125-00 it was held that the effect of this subsection is not to
bar completely proceedings under a code after expiry of the 30 days. The bar would only apply
were one of the parties has referred the matter to a labour officer. In
• Watyoka v ZUPCO (Northern Division) SC 87-2005 it was held that consequently a
determination made after the thirty days is not a nullity. Or where the employee referred
the matter to a labour officer and during such hearing withdrew the referral, but matter
still proceeded to arbitration and arbitrator ruled that the withdrawal was valid but its
consequences were that the code proceedings were restored as employer did. Held that
arbitrator did not err in law – Madamombe v Barclays Bank of Zimbabwe LC/H/341/2009
CON’T
• Where the parties agree to refer the dispute to a labour officer – Matangira v Standard
Chartered Bank LC/H/18/03 and Vumba Park Service Station v Sinai LC/MC/19/04.
During unlawful collective job action, which is so massive that the operation of the code
is impracticable - Cargo Carriers (PVT) Ltd v Zambezi & Ors 1996 (1) ZLR 613 (S) and Tel-
One (PVT) Ltd v CASWUZ SC 26-2006. // CHIKONYE & ORS V STTANDARD Where the
dispute
involves a managerial employee and the code does not provide, expressly or impliedly, for
its application to such employees - Zimbabwe Tourist Investment Co. v Gwinyai S-150-97
and Samuriwo v ZUPCO Ltd 2000 (1) ZLR 647 (S). In the latter case the court held that a
code which provided it “shall apply to all employees regardless of rank ...”, did not
nonetheless apply to the managing director, because the disciplinary structure under the
code clearly showed that he was not meant to fall under it, as he was a very central
participant in the entire process on the side of the employer
Formation and requirements of
employment codes
For a code to be registered it has to comply with the specified requirements
including:
• a. It must comply with the formalities for registration under s 101 (1).
Employment council codes take precedence over works council codes. If
there is an employment council code covering the industry no works council
may apply for the registration of a code in that industry unless it first refers
the code to the employment council for approval – s 101 (1a).
• b. A work place code must be the result of agreement between employer
and workers representatives in works council - s 25A (5) d), whilst an
employment council code is agreed by the registered trade unions and
employer representatives at employment council – s 74 (2).
CON’T
QUESTIONS???