Greatermans Stores (1979) (Private) Limited t/a Thomas Meikles Stores and Another v The Minister of Public Service, Labour and Social Welfare and Another

The applicants were companies that terminated employees' contracts of employment on notice following the Supreme Court judgment in Nyamande v Zuva Petroleum (Pvt) Ltd SC-43-15, which upheld the employer's common law right to terminate employment on notice. The Zuva Petroleum judgment, delivered on 17 July 2015, led to widespread terminations of employees on notice by employers across Zimbabwe, with employees receiving only cash in lieu of notice without compensation for loss of employment regardless of length of service. This created a national crisis with severe socio-economic consequences. In response, the Legislature enacted the Labour Amendment Act (No. 5) 2015, amending section 12 of the Labour Act to impose an obligation on employers to pay a minimum retrenchment package (not less than one month's salary for every two years of service) to employees whose contracts were terminated on notice. Section 18 of the Amendment Act (the transitional provision) gave retrospective effect to the amendments, applying them to every employee whose services were terminated on three months' notice on or after 17 July 2015. The applicants challenged the constitutionality of the retrospective application of this financial obligation.

• Whether the Constitution prohibits the enactment of retrospective civil legislation
• Whether the transitional provision giving retrospective effect to the financial obligation violates the right to equality and equal protection of the law (section 56(1) of the Constitution)
• Whether the retrospective imposition of the financial obligation constitutes an unfair labour practice in violation of section 65(1) of the Constitution
• Whether the retrospective imposition amounts to compulsory deprivation of property in violation of section 71(3) of the Constitution
• Whether the principle of 'due respect for vested rights' under section 3(2)(k) of the Constitution prohibits retrospective civil legislation that impairs vested rights

The application challenging the constitutionality of section 18 of the Labour Amendment Act (No. 5) 2015 was dismissed with costs.

The binding legal principles are: (1) The Constitution does not prohibit retrospective civil legislation; only retrospective criminal legislation is prohibited under section 70(1)(k). (2) The principle of 'due respect for vested rights' under section 3(2)(k) is a principle of good governance that informs interpretation of constitutional provisions but does not independently prohibit retrospective legislation. (3) The presumption against retrospectivity is rebutted when legislation expressly provides for retrospective application. (4) The right to equal protection of the law (section 56(1)) does not prohibit reasonable classification of persons based on objective criteria that are rationally related to a legitimate legislative purpose. Retrospective differentiation of treatment between employers and employees in relation to compensation for termination of employment does not violate equality rights when the classification serves the legitimate purpose of protecting employees from uncompensated loss of employment. (5) Retrospective civil legislation is constitutional provided it: (a) is enacted for purposes of peace, order and good governance; (b) does not infringe fundamental rights enshrined in Chapter IV of the Constitution; (c) involves classification rationally related to its legislative purpose; and (d) is based on reasonable and objective criteria. (6) Payment of compensation for loss of employment based on length of service does not constitute an unfair labour practice; section 65(1) applies to conduct by parties in employment relationships, not to the validity of legislation itself. (7) Retrospective imposition of a financial obligation to pay compensation does not constitute compulsory deprivation of property under section 71(3) where the payment represents damages for loss caused by the payer and is owed to a private party rather than being taken by the State.

The Court made several significant observations: (1) The Zuva Petroleum judgment was misinterpreted by employers to permit wholesale termination of employees at will, when other provisions (such as retrenchment legislation) would have applied to termination of five or more employees. (2) The mass terminations following the Zuva Petroleum judgment revealed 'unprecedented' employer conduct that 'had no substantial equity in it' and caused a national crisis warranting legislative intervention. (3) A system allowing employers to terminate employment on notice 'for undisclosed reasons' without compensation for loss of employment is 'fundamentally unfair'. (4) The Legislature is presumed to have applied its mind to the possible effects of retrospectivity and determined that the benefits outweighed potential unfairness. (5) Employers who terminated contracts should have realized, in accordance with principles of fairness and justice, that 'long service employees deserved more than a mere three months' notice pay' and that 'the longer their period of service, the more they would have contributed to the enhancement and wellbeing of their employer's business'. (6) The Court emphasized that 'the raison d'etre of constitutional law is the human being' and that employment law's central purpose is 'to guarantee the protection of workers even at the time of termination of employment'. (7) The judgment contains extensive comparative analysis of equality jurisprudence from India, South Africa, Canada, the United States, and international human rights law, demonstrating the universal acceptance of reasonable classification as consistent with equality principles. (8) The Court noted that tax laws 'invariably impose financial obligations retrospectively on citizens', suggesting retrospective financial obligations are common in civil legislation.

This landmark decision establishes critical principles regarding retrospective civil legislation in Zimbabwe: (1) It confirms that, unlike criminal law, there is no constitutional prohibition on retrospective civil legislation, provided it does not infringe fundamental rights. (2) It clarifies that the principle of 'due respect for vested rights' (section 3(2)(k)) is not directly justiciable but serves an interpretative function. (3) It provides comprehensive guidance on the right to equal protection of the law (section 56(1)), adopting the doctrine of reasonable classification: differentiation based on objective criteria rationally related to a legitimate legislative purpose does not violate equality rights. (4) It affirms the Legislature's broad power under section 117(2)(b) to make laws for 'peace, order and good governance' and to employ retrospectivity as a method of implementation. (5) It establishes that retrospective imposition of financial obligations does not per se constitute compulsory deprivation of property under section 71(3). (6) The judgment aligns Zimbabwe's labour law with international standards (ILO Convention 158) regarding compensation for termination of employment. (7) It demonstrates the Court's willingness to uphold socially progressive legislation aimed at protecting vulnerable employees, balancing employer rights with broader public interest in fair labour practices. The case has significant implications for understanding the limits of constitutional challenges to retrospective legislation and the scope of legislative power to respond to social and economic crises.