In this article, I write on a topic I consider to be important to the National Employment Council (NEC), minimum wages for the mining industry.
This follows a judgment by the Labour Court in Harare in December 2024, in a case between a mining company and its employees, case reference LC/ H853/25 or Judgment Number LC/H 541/25, which I extensively referred to in this article.
Background of the matter
This was an appeal in the Labour Court by our client, an employer that is a company in the mining industry, against the decision of an arbitrator, through an arbitral award in August 2025, wherein the arbitrator had ordered the employer to pay its employees wage increases based on the “dollar value principle” as stipulated in the Collective Bargaining Agreement (CBA) for the mining industry, SI 59 of 2025, despite the employer already wages above the new minimum rates set by the CBA for the period July-December 2024.
The CBA has columns showing the old minimum wages, new minimums and the specific dollar value increase, per grade.
A dispute arose when employees demanded that the company also pay the specific “dollar value increases” per grade shown in the “dollar value increase” column in the CBA.
The employer refused, arguing that its obligation was only to meet the minimum wage, which it already exceeded, as the employer was already paying above the new minimum wage.
The employees argued that the phrase “dollar value principle will apply” mentioned in the CBA obligated the employer (appellant) to add the specific dollar amount of the increase per grade to the employees’ existing higher salaries.
The dollar value principle relied upon by the employees initially emanated from an June 18, 2024 mining industry circular communicating the wage increases, which culminated in SI 59 of 2025.
Finding of the Labour Court
The Court made a number of important findings which are summarised below.
Contractual framework: minimum wages and the dollar value clause
The applicable CBA (SI 59 of 2025), which, like those before it, amended the principal SI 152 of 1990. The CBA provides that the basic minimum earnings in the CBA are payable to employees.
The schedules in the CBA set mandatory minimum wage floors that no employer may pay below. The clause covers minimum wages, not those already paying above.
The CBA retains Clause 6 (Exemptions, Variations and Savings), allowing employers to obtain exemptions.
It also states that “Those employees who are able to pay more than the NEC minimums are encouraged to do so. The dollar value principle will apply”.
Meaning of the Encouragement and Dollar Value Clause
The Court held that the phrase “encouraged to do so” in the clause did not make it mandatory for employers already paying above the new minimum wages to effect the dollar value increases meant to increase the minimum wages per grade.
The clause merely “encourages” higher than minimum remuneration and says the “dollar value methodology will apply” without creating any explicit legal duty.
Interpretation of the CBA-Mandatory or Permissive
The Court made the following determination. The CBA sets mandatory minimums, retains Clause 6 exemptions and merely encourages higher-paying employers to pay more.
The evident mischief the CBA addresses is the payment of sub-minimum wages, not penalising employers already paying well above the minimum.
It was held that the Labour Court prohibits employers from paying wages below the minimum. Section 74(6) of the Labour Act expressly allows parties to voluntarily agree to higher pay, confirming that an upward variation is permissive, not compulsory.
A binding dollar-value obligation would therefore exceed both the text and purpose of the CBA and the statute.
Arbitrator’s errors at law
According to the Labour Court, some of the errors at law made by the arbitrator included the following:
The arbitrator erred in relying on an interpretive letter from the NEC Mining General Secretary. The NEC, though a party to the CBA, is not a court or lawmaking authority. Its ex post interpretation is a “bald assertion” with no legal force.
Tribunals must not decide matters on the mere say – so without evidence.
The dollar value principle was not defined in law. Use of the word “shall” governs the calculation of the minimum increases per grade, not an obligation by employers already paying higher wages to pay those increases.
There was no legal foundation for the obligation imposed. No statute, case law, negotiation history, or explicit contractual term supports the view that employers must apply the dollar increment to the above minimum wages.
The arbitrator’s purposive approach was flawed. The mischief which is addressed by minimum wages in the CBA is the payment of sub-minimum wages.
Conclusion
In summary, the Court ruled that according to the mining industry CBA (SI 59 of 2025) an employer already paying above the new minimum wage was encouraged but not obligated to effect the specific/ minimum dollar value increase per grade.
The dollar value principle simply describes the method of calculating minimum wage adjustments and optional (but not mandatory) above – minimum adjustments.
Disclaimer: This simplified article is for general information purposes only and does not constitute the writer’s professional advice. Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), ACCA (Business Valuations), MBA(EBS, Heriot-Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, a chartered accountant, insolvency practitioner, commercial arbitrator, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He was recently appointed to sit on the Council of Estate Administrators in Zimbabwe.
He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles.
