Unfair dismissal occurs when an employer fails to substantiate the alleged misconduct necessitating dismissal. This normally happens after an employer has terminated the employee’s contract of employment (written or otherwise) in violation of the provisions of Section 12(4a) and 12 B (1) and (2) of the Labour Act. The remedies for unfair dismissal include reinstatement, damages in lieu of reinstatement and back pay.
In order to fully appreciate the remedies available to an employee who has been unfairly dismissed, it is trite to first look into the historical background on the law of unfair dismissal. The law of unfair dismissal originated from the defects of the common law of wrongful dismissal. The common law was developed in a way such that the law of wrongful dismissal left the worker exposed and unprotected in two main respects namely;
- It accorded to the employer so wide an implied right of summary dismissal that the employee’s chances of successfully challenging a dismissal for cause were slight.
- Secondly, the wrongfully dismissed worker was entitled to so extremely limited a set of remedies that it was hardly worth his while to sue in the courts, and he rarely did so unless he was, for instance, a director of a company who had been granted a fixed – term contract. Thus Common law did not provide for meaningful remedies for unfair dismissal as indicated in the case of Art corporation v Moyana and Zvoma v Amalgamated Motor Corporation Pvt ltd. It was not provided mainly because of the inadmissibility under contract law, of compelling the employer to employ a person whom he does not trust in a position which imports a close relationship, the absence of mutuality of remedies insofar as the employer could not claim a similar remedy because this would amount to forced labour or slavery and that damages were an adequate substitute.
The legislature, through the Labour Act, no 17 of 2002, ousted the common law position outlined above by providing for reinstatement as a principal remedy for unfair dismissal. Thus the current Zimbabwean position is tilted in favour of the ILO Recommendations 119(1963) and the Termination of Employment at the initiative of the employer Convention, 1982(c158) which provide reinstatement as the primary remedy for unfair dismissal. This was first illustrated in the case of Jarvis v Commercial Careers College and subsequently followed in Art corporation v Moyana (supra) wherein the supreme court came to the realisation that, “the obvious remedy for unjustified (unfair) involuntary termination is re-employment, if the employee so wishes…reinstatement is clearly the primary remedy for unfair dismissal”. Munyaradzi Gwisai, supports this position and argues that this is consistent with the doctrine of fair dismissal under regional and international law and to support this position he cites ZUPCO v Chisvo (1999)1 ZLR 67(s) where McNally JA, reiterated that “…there must be cases and this appears to be one, where reinstatement is the obvious equitable solution…and one may also venture to say that no amount of damages can make up for a long term job unjustifiably lost”.
Sections 89(2)(c)(iii) ; 2A and 12B (1) and (2) of the Labour Act are key provisions which the courts have evoked to acknowledged and award reinstatement as the principal remedy but which can be given with an alternative remedy of damages where reinstatement is no longer tenable. In practise, as will be highlighted in this paper, the courts have been very reluctant to order straight reinstatement without the alternative to pay damages. However, from an employee’s perspective, the approach of the courts in this regard is a reflection of the residue of the common law position still existing. The court has discretion whether to order reinstatement or not by virtue of the provisions of the labour act. This position has been confirmed in the case of Ruturi v Heritage Clothing (PVT) LTD. However, it can be argued that the express proviso under Section 89 (2) (c) (iii) of the Labour Act applies only in limited circumstances, that is, where an application has been made under section 93 (7) of the Act. Section 93(7) applies where a party makes an application directly to the Labour Court in a dispute of right where the Labour Officer has issued a certificate of no settlement and it is not possible to go for compulsory arbitration or the labour officer refuses to issue the certificate after expiry of 30 days after conciliation has failed to address the dispute. Thus in all other appeals whether from arbitral awards or under employment codes or applications for confirmation of labour officer’s ruling, the Labour Court has general freedom under Section 89 (2) (a) (ii) of the Labour Act to confirm, vary, reverse, or set aside the decision, order or action that is appealed against, or substitute its own decision or order. This, it is argued, includes ordering reinstatement as a pure and straight order without an alternative of damages. The Labour court must be guided by values of equity and social justice. Thus in deciding whether or not to order reinstatement the courts will take into consideration factors like the intention of the legislature as was held in Mushaya v Glens Corporation that reinstatement should be ordered where its denial would frustrate the intention of the legislature. It is argued that,“A major objective of the labour Act is to promote the fundamental rights of employees and to protect employees from unfair dismissal. Reinstatement is the primary remedy under the unfair dismissal doctrine and generally should therefore be awarded unless employer can show compelling reasons otherwise. Worth noting are the provisions of section 89(2) (c) (ii) of the labour Act which reads (c) “(ii) in deciding whether to award damages or reinstatement or employment, onus is on the employer to prove that the employment relationship is no longer tenable, taking into account the size of the employer, the preferences of the employee, the situation in the labour market and other relevant factors”. This is the exact position supported by McNally in ZUPCO v Chisvo (supra) where he expressed the view that the bigger the employer the less likely that it will be held that the relationship is no longer tenable, since personal contact is minimal. The case of Muringi v Air Zimbabwe corporation merit special consideration as it illustrates that courts are more likely to rule that the employment relationship is no longer tenable in relation to a very senior member of management than other grades of employee especially in a small company. The concept of untenable working relationship accords with the position already held in Winterton, Holmes and Hill v Paterson where the deciding factor on ordering reinstatement was whether or not there was an untenable working relationship.
However, the Supreme court has taken a very restrictive approach in awarding reinstatement as a straight jacket remedy. In the case of Farai Mtetwa vs Business Equipment Corporation Ziyambi JA ruled that an employer cannot be compelled to re-employ an employee in circumstances where a normal employer-employee relationship had broken down. Conversely, the position cannot be interpreted so entitling an employee to decline to accept an order of reinstatement and making an election for damages.
Thus taking the Supreme Court’s reasoning in the Farai Mtetwa case (supra) it is clear that the highest court of appeal is inclined towards awarding the remedy of reinstatement for unlawful dismissal with an alternative remedy of paying damages being available to the employer. In fact, it has become common practise that employers no longer have the need to address the court in demonstrating that reinstatement is no longer tenable. It is now automatic that once the court finds that an employee was unfairly dismissed, it will order reinstatement or alternatively payment of damages. Thus in a case where the arbitrator ordered straight reinstatement without the alternative of damages, and the Labour Court upheld the arbitrator’s decision, the Supreme Court ruled that both the Labour Court and the appointed arbitrator are required, as a matter of law, to award damages as an alternative to reinstatement. Failure to do so will render the decision legally defective. In addition, the court has made it very clear that the employee cannot chose to be paid damages when the employer wants to reinstate.
In South Africa, the Labour Relations Act, 1995 confers on an unfairly dismissed employee, a right to be reinstated, unless the dismissed employee does not wish to return to the employer, or where the commissioner of the Labour Court is satisfied that resumption of the employment relationship would be intolerable or impracticable. Thus, the discretion is with the court or the court has to abide by the preferences of the unfairly dismissed employee. In the case of Ndwere v Fleximail where a worker who was to be retrenched was suddenly dismissed for conduct inconsistent with the contract of employment for failure to disclose, when he was appointed, that he earlier worked for another company. The South African Labour Court ruled that “the only effective way to deal with that problem is to provide an effective remedy to unfair dismissal, namely straight and pure reinstatement” . It must however be noted that South African decisions are not binding in the Zimbabwean courts, they are only persuasive and in the event that our own courts have already made a decision on the subject matter, the doctrine of judicial precedence now operates where all lower courts are bound by the decision of the higher court, in this instance, the Supreme Court.
It is humbly submitted that if our courts had taken a wider approach to interpreting section 89 (2) of the Labour Act, reinstatement would really be an effective primary remedy for unfair dismissal to the much benefit of an unfairly dismissed employee by granting him the right to decide on whether or not to go back to his original position. The views of the affected part were taken into consideration seriously under section 89 (2)(c)(ii) of the Act. Usually it takes time for an employee to get a similar job and occupy the same position in a different company altogether. This is more so where the employee has got less qualifications expected for his job but would have rose through ranks by hardworking or by recognition of his long stay at the company. If such was the situation leading to the holding of a high rank by an employee, he cannot expect such a favour from any other company except the one which dismissed him, hence reinstatement would be the only effective remedy to safeguard his interests.
While reinstatement seems to be a good concept, it is less effective since in most cases employees are reinstated without addressing the issue of the period spent on unfair dismissal. That period is normally not compensated unless in exceptional cases where the order of reinstatement specifies that an employee has to be reinstated without loss of salary and benefits. Ample authority is found in Ambali v Bata shoe Co. Ltd where an employee was not awarded back pay and benefits for the period during which he was on suspension solely because the order of reinstatement issued in his favour did not have a retrospect effect. It stated that Ambali was to be reinstated; it did not say he was to be reinstated “with effect from the date of suspension or with back pay and all benefits”. This position was confirmed by the Supreme Court in Chegutu Municipality v Manyora where it was ruled that, “…the word “reinstate” or “reinstatement” carries no automatic retrospect connotation, either in ordinary language or in our legislation. Normally it means simply that the person concerned will be placed again in his former job. If retrospectively is intended, one would normally look for additional words such as “with effect from the date of dismissal” or “with effect from (a particular date in the past) or with back pay and all benefits from…. (Date).
Despite the existence of this remedy, the courts are reluctant and very hostile to award it as a straight remedy. It thus remains a textbook remedy and only effective for academic purposes .The courts hide behind the inadmissibility of compelling the employer to employ another whom he does not trust in a position that imports a close relationship and also the issue of complete loss of confidence in an employee once dismissed for whatever reason. The Supreme Court expressed its displeasure in ordering reinstatement in Hama v NRZ when it confirmed the position in Art Corporation v Moyana that, “although reinstatement is the primary remedy for unfair dismissal provided by the law, very few successful applicants are awarded it. The usual remedy for successful applicants is compensation. Reinstatement is not the only or inevitable remedy for unfair dismissal. It is a remedy.”
The other remedy available for unfair dismissal is the payment of damages to the employee. Damages are wider in their scope than any other remedy. They may include back pay. The case of Kuda Madyara v Globe Phoenix Industries, clearly stipulates the relationship between back pay and damages. Quoting McNally JA in the case of Leopard Rock Hotel co.v Van Beek it was stated, “ It seems to me that “back pay” and damages are indeed different concepts but only in the sense that damages is a wider concept. It normally includes back pay.” Also in Marimo v First Bank Corporation Hove J said, “…where an employer opts to pay damages in lieu of reinstatement, back pay would form a portion of those damages”.
Damages are usually awarded in lieu of reinstatement by virtue of the provisions of s 89(2) (c) (iii) of the Act which states that damages may “be awarded to the employee concerned as an alternative to his reinstatement or employment”. The ILO Conventions also support the idea of damages. Article 10 of c158 requires the determining authority or court to order an alternative payment of adequate compensation where reinstatement would be impossible.
However the courts have held that payment of damages is for the actual loss suffered by the employee and not for pain, injured feelings or losses of future earnings because the damages paid are contractual and not delictual. This was enunciated in he case of Gauntlet Security Services (Pvt)ltd v Leonard The Supreme court held to be too remote the claim by the employee for the lost profits due to premature cancellation of the employment contracts by the employer.
The case of Muzondo v University of Zimbabwe provides exceptional circumstances under which special damages can be paid especially for loss of benefits directly provided in the contract such as subsidised accommodation.
The real quandary on damages comes with their quantification. In ZUPCO v Chisvo (supra) McNally JA observed that, “the Act makes no provision for the basis upon damages are to be calculated and this is unsatisfactory. The question has never come to this court and we are not aware of the principles which the tribunal applies in calculating damages in such cases”. The ZUPCO case was before the Labour Amendment Act of 2005 which now,s89(2)(c) has a proviso(iii) which specifies that,“(iii) should damages be awarded instead of reinstatement or employment as a result of untenable working relationship arising from unlawful or wrongful dismissal by the employer, punitive damages may be imposed.”
Although the Act is silent about what is meant by punitive damages, it is suggested that the damages must be sufficiently high to suggest to the employer that reinstatement is the more appropriate and equitable alternative as per ZUPCO (supra).Also of the essence is the case of Muchabaiwa v Chinhamo & Anor which states that in quantifying the “actual loss” suffered or damages parties must take into account “the horrific rise in the rate of inflation which is eroding the value of Zimbabwean currency”.
It should be noted that there is a different approach to the concept of damages depending on the convictions of the bench of the day. The Conservatives, in the moulds of Gubbay were of the view that damages in lieu of reinstatement under the Act were not distinct from the normal damages under the common law and disregarded the concept of surrogate or punitive damages. On the other end of the spectrum, the progressive bench led by McNally advanced the position that the appropriate damages should be substantial damages as would ameliorate the employee’s suffering and this was referred to as “future damages” in the case of Ruturi v Heritage Clothing (Pvt) Ltd
The remedy of damages is made less effective by the concept of mitigation. After unfair dismissal, an employee has a duty to mitigate his losses by looking for reasonable alternative employment “if he does not, his damages will be reduced. He will be compensated only for a period between his unlawful dismissal and when he could reasonably have expected to find alternative employment. If he could in the meanwhile have taken temporary or intermittent work, his compensation will be reduced” as per Mcallay JA in Ambali v Bata Shoe Co. Ltd (supra). This position was earlier on confirmed in Gauntlet Security Services (Pvt) Ltd v Leonard) that it is well established that an employee who is conscious that he has been dismissed unlawfully should mitigate his damages by taking temporary employment.
Even if the burden of showing that the appellant earned or ought to have earned some money during the relevant period rests on the employer, as was held in Nyaguse v Mkwasine Estates (Pvt) Ltd the idea of mitigation flies across the face and spirit of section 2A of the Labour Act which lays down the purpose of the Act which is to advance social justice and democracy in the workplace. By setting out the purpose of the statute, the legislature sought to encourage a purposive approach to its implementation. It is meant to discourage employers from unfairly dismissing the workers. Unfortunately lack of judiciary activism is reversing such gains by enabling the employer to pay ridiculous damages hiding under the concept of “failure by the employee to mitigate his loss.” Even if the employee had found another job, that should not release the employer from paying damages for unlawfully dismissing an employee. Social justice according to M. Brassey is concerned with the way in which benefits and burdens are distributed among the members of society. It would not be doing justice to allow an employer to escape liability by paying fewer damages on the basis of the prudence of an employee who would have sought alternative employment.
The employer should be held fully responsible for the unlawful state of affairs he caused. Mitigation seems to suggest that the employer and employee should both contribute to rectifying the problems caused by unfair dismissal at the initiative of the employer. This is similar to the concept of contributory negligence where both parties would be at fault in the causation of the accident and each member would pay for his faultiness.
Back pay is the other remedy available to an unfairly dismissed employee. Section 89(2) (c) (i) of the Act provides for this kind of a remedy as separate from reinstatement and damages. This remedy brought a lot of confusion in the field of labour law, with some court decisions suggest that it is a separate remedy while other decisions express the view that it is not separate from damages in lieu of reinstatement. In the case of Gauntlet Security Services (Pvt) Ltd v Leonard (supra), Gubbay CJ was of the view that the Tribunal’s award of back pay as a separate item was wrong. Where damages in lieu of reinstatement were issued the proper thing was to issue “only a single indivisible sum”.
Sandura JA(as he then was) reversed the decision not to award back pay in Chiriseri & Another v Plan International “where an order of reinstatement is retrospective in effect, the damages to be paid in lieu of reinstatement must include back pay and benefits”. It was also held in Madyara v Globe phoenix (supra) that the damages are separate. Where reinstatement is retrospect the award is in two distinct portions, one pertaining to back pay and the other to damages in lieu of reinstatement. Even if such parts are sub-components of one total sum awarded.Gwisai (supra) argues that it is difficult to reconcile with Gubbay’s position of “a single indivisible sum”.
However, in practice there is ample authority proving that the courts follow the Chiriseri and Madyara cases. In Marimo v First Bank corporation Hove P (as she then was) stated that” In the case of Kuda Madyara…it was held that where reinstatement with no loss of salary and benefits is ordered it is clear that an employee who would be reinstated would receive all his back pay and benefits from the date he was unlawfully dismissed….”
Back pay is to be paid with interest and is calculated as at the date of unfair dismissal. Reference is made to case of Redstar Wholesalers v Edmore Mabika and also in Olivine Industries v Nhara where it was held that “the rate of interest is the rate applicable on the date of dismissal”
This negates the fundamental norms of social justice given the rate of inflation and undulating currency system in Zimbabwe. It appears this law was made to operate in a normally functioning economy, and was never introduced with the phenomenon of inflation and currency deficiencies in mind. The position of law is that damages are only payable as at the time of incident. In other words the amount of loss you suffered on the day the incident occurred is what must be awarded to you as compensation .Our courts appear to have difficult in varying common law rendering the whole process of claiming damages not only academic but at times absurd. Courts should make the law adapt to changing circumstances rather than remain steeped in the past dogmas that have no relevance to the public‘s quest for justice.
To sum it up, once it is established that an employee has been unfairly dismissed, the law recognizes these three remedies as available to the employee concerned;
- Reinstatement, which is arguably the primary remedy for unfair dismissal. However, regardless of the clear position of our law, it is still common practise that the employer is always presented with an option to pay damages in lieu of reinstatement. Thus the employer elects whether to reinstate or pay damages. On the other side, the employee does not have any option to elect his preference, that is, going for damages instead of reinstatement.
- Damages in lieu of reinstatement is a remedy available to an employee whose employer does not want to re-employ the unfairly dismissed employee. In terms of the Labour Act, the employer must prove that reinstatement is no longer tenable hence payment of damages.
- Back pay. As discussed above, this remedy is covered under damages. However, it can also apply where the employer elects to reinstate the employee but is still ordered to pay the employee back pay from the date of unlawful dismissal to the day of reinstatement. Either way, it cannot be treated as a stand alone remedy.
Article written by Mr Kudakwashe Masiyenyama LLB (UZ) Associate at Gambe Law Group