TPZ stopped from firing workers

WHEN workers on fixed-term contracts continue to work and their employer continues to pay them, the contract is still binding; it is said to be relocated, and cannot be abruptly terminated nor can it be downgraded to a contract less advantageous to the workers.

The Supreme Court has upheld this principle and on the facts of the case has blocked the move by Tobacco Processes Zimbabwe (TPZ) to fire workers on the basis of expired contracts because of failed negotiations between the parties.

The failed negotiations arose when TPZ wanted the workers in question to sign a less-advantageous contract to continue working and the workers refused, wanting to maintain their conditions of service as had been done before with tacit renewals.

The three-judge appeal panel consisting of Justice Lavender Makoni, Justice Susan Mavangira and Justice Felistus Chatukuta, who was acting judge of appeal, on Monday ruled that an employer could not end a contract of employment that had expired once it had been tacitly renewed.

The ruling follows an appeal by TPZ against the decision by the Labour Court decision upholding the finding of a committee of the relevant National Employment Council, the Tobacco Grievances and Disciplinary Committee, that the tobacco company tacitly renewed the contracts of employment for 12 workers and so could not abruptly terminate them.

Tacit relocation is when an employee’s fixed term contract expires without renewal and the employee continues to render his service to the employer with the employer paying the previously agreed remuneration.

In this, the employee is deemed to be employed on the same terms and conditions as the previous contract.

In its ruling, the court even viewed the matter as a clear classic case of the application of subsections 12(1) and (3a) of the Labour Act, which seek to protect workers by preventing an employer from alleging the non-existence of a contract where there has been continued service in terms of an expired contract.

The workers, who were represented by Mr Caleb Mucheche, were originally employed on two-year fixed contracts from May 1, 2011 to April 2013.

After the expiry of their contracts, they continued to work for TPZ for 11 months without anything being signed, and then the company offered them new contracts with the same terms as the expired ones.

The workers signed the new contracts, which effectively regularised the expired contracts in retrospect for the period of May 1 to April 30, 2015.

After the expiry of the contracts on April 30, 2015, everybody kept working on the same conditions until June 22 on the same conditions as the expired contracts.

TPZ then offered new one-year fixed-term contracts.

This is when the trouble arose, the new contracts had a two-months’ probation clause and other less favourable conditions.

So the workers rejected the offer resulting in the company terminating their contracts on the basis that the negotiations between the parties had collapsed.

This sparked the legal battle between the parties with the workers successfully contesting the company’s decision at the NEC. The appeal by the TPZ to the Labour Court failed.

It appealed to the Supreme Court.

The issue for determination before the Supreme Court was whether or not the lower court erred in finding that the contracts of employment in question had been tacitly relocated, a question of fact since the law is definite.

Writing the judgment for the court, Justice Lavender Makoni upheld the Labour Court decision that because the 12 workers continued rendering service from May 1 to June 22 2015, and being paid for this in terms of the expired contracts, that work constituted tacit relocation of contracts by TPZ.

She said the court could only interfere with the decision of the lower court based on factual findings where gross misdirection had been established and TPZ had not alleged such gross misdirection.

The judge ruled that the lower court’s decision was based on a correct application of the principle of tacit relocation.

A mere attempt to negotiate a new contract did not operate to vary an existing binding contract and TPZ’s new offer amounted to an attempt to unilaterally vary the workers’ relocated contracts.

“Therefore, the appellant’s termination of the respondents’ contracts of employment in the circumstances was grossly irregular,” said Justice Makoni.

TPZ, through its lawyers, argued that a holistic analysis of the facts showed that relocation of contracts in 2015 could not have been the company’s intention as the parties knew of the need for a written contract.

But in his response, Mr Mucheche alluded to certain provisions of the Labour Act, particularly Section 12(3) of the Act.

The section provides that where a contract does not specify its duration or date of termination, it is deemed to be one without a limit of time.

Mr Mucheche argued that the legislature sought to protect employees from employers who have more bargaining power than employees.

In this regard, he stressed that there was tacit relocation in that his clients reported for work and were remunerated under the old contracts.