Ballantyne Butchery (Private) Limited t/a Danmeats v Edmore Chisvinga & Others

On 23 January 2009, the parties entered into two retrenchment agreements. The first agreement stipulated payment of terminal benefits in Zimbabwe Dollars (ZWD 2 quadrillion pegged for A1 grade) without specifying a payment date. The second agreement provided for payments in kind (fuel coupons and pork bones) in US Dollars, to be settled in two lots by end of January and February 2009. Both agreements were approved by the Ministry on 30 January 2009. On 2 February 2009, the Reserve Bank introduced a multi-currency regime through a Monetary Policy Statement (MPS) and Presidential Powers (Temporary Measures) (Currency Revaluation and Issue of New Currency) Regulations 2009 (S.I. 6 of 2009). On 11 February 2009, the appellant paid the first retrenchment package in Zimbabwe Dollars by RTGS into the respondents' bank accounts, reflected on 13 February 2009. The respondents did not access these funds. Four months later, on 16 June 2009, the respondents applied to a labour officer for enforcement of their retrenchment benefits, which was referred to arbitration on 9 July 2009.

• Whether the arbitrator exceeded his terms of reference in ordering recalculation and payment in convertible currency
• Whether the Labour Court exceeded its jurisdiction in fundamentally altering the arbitral award
• Whether payment in Zimbabwe Dollars on 11-13 February 2009 constituted timely and valid payment under the retrenchment agreement
• The impact and application of the MPS and the Regulations (S.I. 6 of 2009) on debts and contracts entered into before and paid after 2 February 2009
• Whether the Zimbabwe Dollar had become defunct and unusable currency as at 11-13 February 2009
• The extent of equitable jurisdiction in labour arbitration and before the Labour Court under s 2A of the Labour Act
• Whether considerations of equity can override legislative provisions

1. The appeal is allowed. 2. Each party shall bear its own costs. 3. The judgment of the Labour Court is set aside and substituted with: (i) The appeal is upheld with no order as to costs. (ii) The arbitrator's award of 17 August 2009 is set aside.

The binding legal principles are: (1) Arbitrators must confine themselves to their terms of reference and may not prescribe remedies beyond their remit or make new contracts for parties. (2) Appellate courts reviewing arbitral awards must properly exercise their appellate function and may not fundamentally alter awards, especially where no cross-appeal has been lodged. (3) Courts may not make contracts for parties, even under the guise of making agreements more workable or applying equitable considerations. (4) While s 2A of the Labour Act endows the Labour Court and arbitrators with equitable jurisdiction to secure just resolution of disputes, equity cannot be invoked to override or negate provisions of legislation enacted by Parliament or delegated authorities. (5) In currency transition situations, payments made in accordance with applicable transitional legislative provisions (such as regulations permitting settlement in old or new currency during co-circulation periods) constitute valid discharge of contractual obligations. (6) The validity and realizability of currency payments must be assessed as at the time of payment, not at some subsequent date when currency conditions may have changed. (7) Section 8(3) of the Presidential Powers (Temporary Measures) (Currency Revaluation and Issue of New Currency) Regulations 2009 permitted debts incurred before 2 February 2009 to be settled in either old or new currency system between 2 February 2009 and 30 June 2009.

Patel JA made several important obiter observations: (1) The continuing operation and application of the Regulations after February 2009 and until they expired at the end of July 2009 is questionable, and each case necessitating payment of employment debts in realisable currency would have to be considered on its own facts in light of the changing commercial environment during that period. (2) If it is accepted that the Labour Court enjoys equitable jurisdiction by virtue of s 2A(1) and (2) of the Labour Act, then arguably even an arbitrator may dispense equity in labour matters because s 98(9) provides that an arbitrator has the same powers as the Labour Court, notwithstanding Article 28 of the Model Law, by reason of s 2A(3) which accords primacy to the Labour Act. (3) The need for predictability in law is paramount, and allowing judges latitude to freely interpret statutes according to their own view of what is just and equitable risks loss of uniformity and predictability. (4) The danger is not that judges become legislators, but that they may become legislators with widely differing views of policy, leading to quot judices, tot sententiae. (5) There was nothing to prevent the respondents from accessing and utilizing their packages in Zimbabwe Dollars in February 2009 instead of waiting four months to complain. (6) The Court distinguished the application of equity in Madhatter Mining Company v Tapfuma SC 51/14, noting that equity was appropriate there because the debt had not been satisfied and was still due, unlike the present case where payment had already been made in realisable currency.

This judgment is significant in Zimbabwean and South African jurisprudence for several reasons: (1) It clarifies the scope and limits of arbitral and judicial intervention in contractual disputes, emphasizing that neither arbitrators nor courts may make new contracts for parties under the guise of equity. (2) It provides important guidance on the interpretation and application of currency transition measures, particularly the co-existence of multiple currencies and the validity of payments during transitional periods. (3) It delineates the extent of equitable jurisdiction in labour disputes, confirming that while s 2A of the Labour Act confers equitable powers on the Labour Court and arbitrators, such powers cannot override statutory provisions or established legal principles. (4) It emphasizes the importance of adherence to terms of reference in arbitration and the proper exercise of appellate functions. (5) It demonstrates judicial flexibility in costs awards where equity demands deviation from the general rule that costs follow the cause. (6) It contributes to the jurisprudence on currency demonetisation and the temporal validity of payments made during currency regime changes, relevant to both Zimbabwe and potentially South Africa in understanding monetary transitions.