Cuthbert Elkana Dube v Premier Service Medical Aid Society and Premier Service Medical Investments

The appellant was Chief Executive Officer of the first respondent (a medical aid society) under a contract of employment and also drew a salary from the second respondent (the first respondent's investment vehicle). He reached the retirement age of 60 years in December 2013 under the Retirement Policy. On 14 March 2013, both boards of directors unanimously extended his tenure for a further ten years from 1 January 2014 to 31 December 2024, with a monthly salary of US$60,000 (later reduced to US$43,000). Following allegations that the appellant was taking an exorbitant salary of US$92,000 per month without full board knowledge, the boards withdrew the extension and requested the appellant take pre-retirement paid leave. The appellant, through a letter dated 20 February 2014 addressed only to the first respondent, insisted his contract subsisted and was not terminated. Two separate disputes were referred to compulsory arbitration - one with the first respondent and another with the second respondent. The arbitrator issued awards in favor of the appellant in both matters, finding the contracts still subsisted. Both respondents appealed to the Labour Court, which allowed the appeals and set aside the arbitral awards. The appellant then appealed to the Supreme Court.

• Whether the arbitrator exceeded his terms of reference by finding that a contract of employment still subsisted when the terms of reference only asked whether the contract was lawfully terminated
• Whether a court or arbitrator can make a contract for parties
• Whether there was a binding contract of employment between the appellant and the second respondent
• Whether an appellate court can interfere with factual findings of the court a quo

The appeal was dismissed with costs.

An arbitrator in compulsory arbitration under the Labour Act must confine himself strictly to the terms of reference determined by the labour officer in consultation with the parties and cannot exceed that mandate. Where terms of reference ask whether a contract was lawfully terminated, this implicitly accepts that termination occurred and the arbitrator cannot then find the contract still subsists - to do so exceeds jurisdiction. Courts and arbitrators cannot make contracts for parties; they can only interpret existing contracts and determine disputes arising from them. This fundamental principle means an adjudicator cannot rewrite contractual relationships or impose terms parties never agreed to. Section 98(4) of the Labour Act requires the labour officer to determine terms of reference in consultation with parties, giving parties input into the scope of the arbitration.

The Court made observations about the role of parties in compulsory arbitration, noting that while there is a difference between private/voluntary arbitration (complete party autonomy) and compulsory arbitration, s 93(2) of the Labour Act gives the Labour Court or Labour Officer the right to intervene and determine terms of reference in consultation with parties. The Court cited Christie's The Law of Contract in South Africa approvingly for the proposition that it is "unthinkable" that courts should not only tell parties what they ought to have done but then make them do it by enforcing the court's idea of what the contract ought to have been. The Court also observed that if there had been a written contract with the first respondent, there would likely have been a written contract with the second respondent as well if such a relationship existed.

This case is significant in South African and Zimbabwean labour law for clarifying the scope and limits of arbitral jurisdiction in compulsory arbitration under labour legislation. It establishes important principles: (1) arbitrators in compulsory arbitration must strictly confine themselves to their terms of reference as determined by the labour officer in consultation with parties; (2) neither courts nor arbitrators can make contracts for parties - they can only interpret existing contracts; (3) terms of reference in compulsory arbitration are settled through consultation between the labour officer and parties, not unilaterally imposed; (4) appellate courts can interfere with factual findings where decisions are made without regard to evidence. The case reinforces the consensual nature of arbitration even in the statutory compulsory arbitration context and the limitations on adjudicators' powers to reform or create contractual relationships.