Agricultural Bank of Zimbabwe Limited t/a Agribank v (1) Clemio Machingaifa (2) Chenjerai Mutambisi

The respondents were employed by the appellant bank as Assistant Director, Credit Risk and Assistant Director, Debt Recovery respectively. They signed revised contracts of employment in 2000 which provided them with an entitlement to a mileage allowance of 4,000 kilometres per month at Automobile Association of Zimbabwe (AAZ) rates. In August 2001, the appellant unilaterally converted the company car scheme to a personal car scheme, removing the mileage allowance and offering instead a fixed monthly allowance of $30,300.00. The respondents immediately objected by letter dated 3 September 2001, asserting their contractual entitlement to the mileage allowance and threatening legal action. After extensive correspondence where the appellant maintained it could not sustain the allowance and eventually claimed (in April 2004) that it had been included by mistake, the respondents filed a court application in June 2004 seeking a declarator that they were entitled to payment of the allowance. The High Court granted the application with costs.

• Whether the High Court had jurisdiction to determine what was essentially a labour dispute in light of section 89(6) of the Labour Act
• Whether the respondents had waived their contractual right to the mileage allowance by delay or conduct
• Whether the inclusion of the mileage allowance in the contract was due to a mistake that could relieve the appellant of its obligations
• Whether the appellant could unilaterally alter the respondents' contractual entitlements pursuant to a clause allowing it to amend policies and procedures from time to time

The appeal was dismissed with costs.

The binding legal principles established are: (1) The High Court retains original jurisdiction under section 14 of the High Court Act to grant declaratory orders in labour disputes, notwithstanding the jurisdiction of the Labour Court; (2) There is a presumption against waiver of contractual rights which requires clear proof to rebut, and delay in enforcing a contractual right, without more, can never deprive a party of that right except by prescription; (3) A party seeking to escape contractual liability on the ground of mistake must prove the mistake was reasonable and not due to their own carelessness or inattention - an offeror cannot escape liability by establishing a wrong offer which was accepted if the mistake was due to their own fault; (4) A general contractual clause permitting an employer to amend policies and procedures from time to time does not empower the employer to unilaterally remove or alter clearly defined fundamental contractual rights such as entitlements to salary and allowances - a party cannot unilaterally alter the terms and conditions of a contract.

The Court made observations about the conduct of the appellant in delaying for approximately two years and eight months before claiming the allowance was inserted by mistake. The Court noted that if there had truly been a mistake, the appellant would have immediately realized it and stated so when the respondents first raised the issue in September 2001, or at any subsequent occasion in 2001, 2002, or 2003. The Court also commented that it appeared the appellant had a change of heart because of the amounts involved calculated using AAZ rates, which it considered too high and unsustainable, rather than there being a genuine mistake at the time of contract formation.

This case is significant in establishing important principles regarding contractual interpretation in employment relationships, particularly: (1) the High Court's continuing jurisdiction to grant declaratory relief even in labour disputes where the Labour Court might also have jurisdiction; (2) the high threshold for establishing waiver of contractual rights, requiring clear proof and not being satisfied by mere delay; (3) the strict requirements for successfully pleading mistake in contract, particularly that a party cannot rely on mistake due to their own carelessness; and (4) the principle that general clauses allowing amendment of policies and procedures cannot be used to unilaterally alter fundamental contractual rights such as remuneration and allowances. The case protects employees from unilateral variations of their employment contracts by employers.