The applicant was employed by the respondent as General Manager (Risk)/Risk/Governance Executive from 4 January 2010. On 6 March 2014, following a restructuring exercise, the Managing Director informed the applicant that his position had become redundant and he would be retrenched with immediate effect. The respondent offered a retrenchment package which the applicant rejected, counter-proposing USD 850,000 compensation. Negotiations deadlocked, and on 2 April 2014 the respondent referred the matter to the Retrenchment Board. On 24 March 2014, the respondent indicated it would cease paying the applicant's salary and benefits from 31 March 2014, despite the retrenchment process not being finalized. The applicant approached the High Court on urgent basis on 11 April 2014, seeking an order compelling the respondent to continue paying his salary and benefits pending finalization of the retrenchment proceedings.
1. The refusal by the respondent to continue paying the applicant his full salary and benefits pending finalisation of the retrenchment package by the Retrenchment Board was declared illegal. 2. The respondent was ordered to continue paying the applicant his full monthly salary and benefits pending the finalisation of the retrenchment package by the Retrenchment Board. 3. The respondent was ordered to pay costs on the Law Society scale of attorney and client.
The binding legal principles established are: (1) An employee's entitlement to salary and benefits continues until the retrenchment process is lawfully concluded, either by agreement between the parties or by decision of the Retrenchment Board or Minister. (2) The effective date of termination of employment through retrenchment is the date when the parties reach agreement on the retrenchment package or when the statutory process is completed, not the date when retrenchment is first proposed. (3) The High Court has jurisdiction to grant interdicts in employment matters where the Labour Court lacks statutory power to grant such relief, notwithstanding that the underlying dispute involves labour law. (4) Unless legislatively ousted, the High Court's jurisdiction under section 171(1)(a) of the Constitution extends to all civil matters including those with labour law elements. (5) An employer who ceases paying salary before lawful completion of retrenchment acts illegally.
The court observed that pending finalization of a retrenchment package, the applicant's position could be equated to an employee on forced leave on full salary and benefits. The court also noted that if continued payment of salary and benefits were later proved unmerited (which the court considered extremely remote), recovery could be made from the retrenchment package. The court expressed concern that the respondent, being fully aware of the legal provisions regarding retrenchment, deliberately stuck to the position that termination occurred on 6 March 2014 while accepting that retrenchment discussions were never concluded. The court indicated this deliberate stance justified an award of costs on a higher scale. The court also commented that it would be unconstitutional for the High Court to deny a litigant a hearing in any civil matter if its jurisdiction is not specifically excluded through legislation.
This case is significant in Zimbabwean labour law as it clarifies the rights of employees during retrenchment proceedings. It establishes that retrenchment is a process that must be lawfully concluded before employment can be deemed terminated, and that employees retain their entitlement to full salary and benefits throughout this process. The case also clarifies the respective jurisdictions of the High Court and Labour Court, confirming that the High Court retains jurisdiction over civil matters including labour disputes where the relief sought (such as interdicts) falls outside the statutory powers of the Labour Court. The case reinforces constitutional principles regarding the High Court's inherent jurisdiction under sections 171 and 172 of the Constitution of Zimbabwe Amendment (No 20) Act 2013. It provides important guidance on the procedural requirements for lawful retrenchment under section 12C of the Labour Act and S.I 186/2003.