Diamond Mining Corporation v Peter Tafa & Others

The four respondents were employed by the appellant on 3-month fixed-term contracts that were to expire on 30 September 2011. Before the expiry of the contracts, the appellant terminated the contracts with two weeks' notice and paid the respondents their terminal benefits including overtime, 2 weeks' notice pay, cash in lieu of leave days, and their salary for September 2011. The respondents signed letters acknowledging receipt of these payments on 30 September 2011. The respondents then referred the matter to arbitration for compulsory arbitration under section 93 of the Labour Act, claiming they were unfairly dismissed. They alleged they had initially been employed on probationary contracts in February 2011 and were 'forced' to sign the 3-month fixed term contracts. The Arbitrator found in favour of the respondents, holding they were unfairly dismissed because they were not dismissed in terms of a code of conduct. The Arbitrator awarded them overtime, night allowance, and public holiday pay. The Labour Court upheld the arbitral award. The appellant appealed to the Supreme Court.

• Whether the termination of fixed-term contracts with proper notice constituted unfair dismissal
• Whether dismissal in terms of an employment code was required for termination of fixed-term contracts
• Proper interpretation of section 12B of the Labour Act regarding unfair dismissal
• Whether the respondents had established their claims for overtime and terminal benefits
• Whether the Labour Court erred in upholding the arbitral award without requiring evidence to substantiate the monetary claims

The appeal was allowed with costs. The judgment of the Labour Court was set aside and substituted with an order allowing the appeal and setting aside the award of the arbitrator.

The binding legal principles established are: (1) The requirement under section 12B(2)(a) of the Labour Act that dismissal be in terms of an employment code is subject to subsection (3) and does not apply to termination of fixed-term contracts; (2) Termination of a fixed-term contract is only deemed unfair dismissal if the circumstances in section 12B(3) are established - namely that the employer deliberately made continued employment intolerable, or the employee had a legitimate expectation of re-engagement and another person was engaged instead; (3) Where an employer terminates a fixed-term contract with proper notice as provided in section 12(4) of the Labour Act, and the required circumstances for unfair dismissal are not established, there is no unfair dismissal; (4) Arbitrators and courts must require proper evidence to substantiate claims for damages and terminal benefits and cannot make awards based on arbitrary assertions without evidentiary foundation; (5) Courts must hear evidence before determining the reasonable period for securing alternative employment when calculating back-pay.

The court made observations about the state of the economy being relevant to determining how long it would reasonably take dismissed employees to find alternative employment, though this required evidence rather than judicial speculation. The court also implicitly criticized the practice of arbitrators accepting monetary claims at face value without requiring substantiation, particularly where documentary evidence (the termination letters) existed showing payments already made and acknowledged by the claimants.

This case is significant in Zimbabwean labour law (and potentially relevant to South African jurisprudence given similar labour law frameworks) for clarifying the proper interpretation of unfair dismissal provisions in relation to fixed-term contracts. It establishes that not every termination of employment made outside a code of conduct constitutes unfair dismissal. The case emphasizes that for termination of fixed-term contracts, specific circumstances must be established under the applicable statutory provisions before a finding of unfair dismissal can be made. The case also reinforces procedural requirements that arbitrators and courts must hear proper evidence to substantiate claims for damages and terminal benefits, and cannot make arbitrary awards without evidentiary foundation. It further establishes that parties cannot ignore payments already made and acknowledged when assessing what is owed to employees.