Aaron Mwenje v Intermarket Building Society

Mwenje was employed by Intermarket Building Society and was dismissed on 5 January 2000 for gross negligence. He appealed to the chief executive officer but was unsuccessful. He then appealed to the Labour Relations Tribunal (now the Labour Court), which ordered his reinstatement without loss of salary and benefits or, alternatively, damages in lieu of reinstatement. Intermarket's subsequent appeal to the Supreme Court was dismissed on 12 December 2003. On 28 January 2004, Intermarket elected to pay damages rather than reinstate Mwenje. Mwenje was paid $6,964,433.38 as back-pay for the period from 4 January 2000 to 24 July 2002. After negotiations, Intermarket offered 12 months' salary as damages ($6,672,097.20). On 15 July 2004, Mwenje accepted this offer in writing. On 21 July 2004, he received a cheque for $3,691,592.65 (12 months' salary less deductions) and signed an acknowledgement stating this was in full and final settlement of his claims for damages in lieu of reinstatement. Mwenje alleged he left a document with the legal practitioner's secretary disputing the finality of the settlement. He then filed an application in the Labour Court seeking fresh quantification of damages, which was dismissed on 22 October 2004.

• Whether a binding settlement agreement had been concluded between the parties
• Whether Mwenje could resile from his written acceptance of the respondent's offer and signed acknowledgement of full and final settlement
• Whether the court should allow a party to withdraw from a voluntarily entered contract

The appeal was dismissed with costs. The Labour Court's decision dismissing the appellant's application for fresh quantification of damages in lieu of reinstatement was upheld.

Where a party has unconditionally accepted an offer in writing and subsequently signed an acknowledgement of receipt of payment in full and final settlement of all claims, a binding settlement agreement is concluded which the courts will enforce. A party cannot be permitted to withdraw from a settlement agreement voluntarily entered into. Courts are bound to protect the sanctity of contracts, including settlement agreements in labour disputes.

The court noted that apart from claiming he was compelled by need to sign the acknowledgement, Mwenje openly admitted that he freely signed the document at the legal practitioner's office. The court observed that this was a hopeless appeal with no merit whatsoever, which is why it was dismissed after hearing submissions from the parties.

This case reinforces the principle of sanctity of contract in Zimbabwean law, particularly in the context of labour dispute settlements. It establishes that parties cannot unilaterally resile from settlement agreements voluntarily entered into, even in labour matters. The case demonstrates the importance of written acceptance and acknowledgements in settlement agreements and the courts' reluctance to allow parties to escape from their freely assumed contractual obligations. It serves as a reminder that settlement agreements reached in labour disputes are binding and enforceable contracts that will be upheld by the courts.