Elizabeth Chipunza v National Employment Council for the Iron and Steel Industry

On 17 February 2016, the applicant was served with a notice to go on immediate leave by the Chairman of the National Employment Council for the Engineering and Iron and Steel Industry. On 7 March 2016, she was served with a notice of termination of her employment contract purportedly in terms of section 12(4a)(d) of the Labour Act [Chapter 28:01]. The termination notice made reference to retrenchment compensation under section 12C but did not indicate that any retrenchment process had been followed. The notice was not addressed to the Retrenchment Board, works council, or employment council as required by law. The applicant brought an application under section 14 of the High Court Act seeking declaratory orders that her retrenchment violated the Constitution and Labour Act procedures.

• Whether the High Court has jurisdiction to hear the matter or whether jurisdiction is exclusively vested in the Labour Court
• Whether the Labour Court can issue declaratory orders
• Whether the retrenchment notice complied with section 12C of the Labour Act
• Whether the retrenchment violated sections 56(1) and 68(1) and (2) of the Constitution
• The effect of the Labour Amendment Act No. 5 of 2015 on termination of employment contracts on notice after 17 July 2015
• Whether the employer complied with the retrenchment procedures required under the amended Labour Act

The court granted all the declaratory orders sought by the applicant: (1) The purported retrenchment on 7 March 2016 violated sections 56(1) and 68(1) and (2) of the Constitution and is null and void; (2) Section 12(4a)(d) does not extinguish the need to follow retrenchment procedures in section 12C, and the respondent's failure to follow the process renders the retrenchment null and void; (3) An employer's failure to comply with section 12(4a) renders the minimum package in section 12C inapplicable, and if the respondent is unwilling to reinstate the applicant, damages must be determined under section 89(2)(c)(iii) and the applicant is entitled to seek recourse under section 93 of the Labour Act; (4) The respondent shall bear costs of the application.

The binding legal principles established are: (1) The High Court has jurisdiction to grant declaratory orders in labour matters, as the Labour Court cannot issue such orders, notwithstanding the Labour Court's exclusive jurisdiction over substantive labour disputes under section 89 of the Labour Act; (2) Termination of employment on notice pursuant to retrenchment under section 12(4a)(d) of the Labour Act requires mandatory compliance with the retrenchment procedures set out in section 12C; (3) Section 12C requires that an employer wishing to retrench must give written notice to the works council, employment council, or Retrenchment Board before effecting the retrenchment; (4) Failure to comply with section 12C procedures renders a retrenchment null and void and violates the employee's constitutional rights under sections 56(1) and 68(1) and (2) of the Constitution; (5) The Labour Amendment Act No. 5 of 2015 did not abolish termination on notice but widened the grounds upon which such termination could occur and imposed additional procedural requirements.

The court noted that there are conflicting judgments on the issue of the High Court's jurisdiction in labour matters, with the determinative factor being the relief sought rather than the nature of the dispute. The court observed that where relief sought is an interdict, the High Court has jurisdiction because the Labour Court has no jurisdiction to grant interdicts. The court also noted that the Supreme Court decision in Don Nyamande and Kingstone Donga v Zuva Petroleum (Pvt) Ltd SC-43/15 remains extant and binding regarding retrenchments on notice that occurred before 17 July 2015, as it has not been overturned. The court commented that the Labour Amendment Act No. 5 of 2015 did not abolish or outlaw termination on notice but rather reinforced the employer's right to terminate on notice while imposing additional conditions. The court observed that in determining jurisdiction, what matters is whether the dispute arises from a cause of action specifically provided for in the Labour Act and for which a remedy is also provided in the Act.

This case is significant in Zimbabwean labour law for clarifying the relationship between the High Court and Labour Court jurisdictions, particularly establishing that the High Court retains jurisdiction to grant declaratory orders in labour matters even where the Labour Court has exclusive jurisdiction over substantive labour disputes. The case also provides important interpretation of the Labour Amendment Act No. 5 of 2015, confirming that termination on notice pursuant to retrenchment under section 12(4a)(d) requires strict compliance with the retrenchment procedures set out in section 12C, including notification to the works council, employment council, or Retrenchment Board. The judgment reinforces that failure to comply with these procedures violates constitutional rights to equality before the law and administrative justice under sections 56 and 68 of the Constitution.