Hongyu Enterprises v Phillip Mafoti

The respondent was dismissed from the appellant's employ on 26 July 2002. Following appeals, the Labour Court on 25 January 2005 ordered the appellant to reinstate the respondent or alternatively pay damages, the quantum of which was to be agreed by the parties or determined by the Labour Court. The respondent fell ill some time after his dismissal, but the illness was not work-related. The parties failed to agree on quantum of damages. On 9 June 2006, the Labour Court quantified damages and ordered: (1) agreed back pay and allowances of $9,404,328.40 with interest; (2) annual leave pay with interest; and (3) remitted the matter to the employer to calculate what would have been payable had the respondent been retired on medical grounds as at January 2005, with interest. The appellant appealed against paragraph 3 of the order.

• Whether the Labour Court misdirected itself in ordering damages calculated as if the respondent was being retired on medical grounds
• Whether the court granted a remedy not sought by the respondent
• What is the correct legal principle for quantifying damages for unfair dismissal
• Whether there is legal basis under the Labour Act for compensating an employee for illness arising after dismissal from employment

The appeal succeeded. Paragraph 3 of the Labour Court order was set aside. The matter was remitted to the Labour Court for assessment of the period within which the respondent could not reasonably have been expected to obtain employment and to make an award of damages based on that assessment. No order as to costs was made.

The binding legal principles established are: (1) An employee who has been dismissed must actively seek alternative employment and cannot remain idle; (2) Damages for unfair dismissal are to be calculated based on the period between wrongful dismissal and the date when the employee could reasonably have been expected to find alternative employment; (3) Section 14 of the Labour Act [Cap 28:01] only provides for remuneration of employees who fall sick while in employment, not after dismissal; (4) There is no legal basis for awarding damages calculated as if an employee was being retired on medical grounds when the illness occurred after dismissal and was not work-related; (5) A court should not grant remedies mero motu (of its own motion) that lack legal foundation and were not sought by the parties.

The Court expressed regret that due to the absence of evidence in the record as to the period it would have taken the respondent to obtain alternative employment, it was unable to determine the matter itself. The Court noted that the respondent had claimed 6 years salary without leading evidence to justify this claim, while the appellant offered to pay 6 months salary, but this issue was not resolved by the court a quo. This observation highlighted the importance of parties leading proper evidence on the question of reasonable time to find alternative employment in unfair dismissal cases.

This case is significant in Zimbabwean labour law jurisprudence as it clarifies and reinforces the correct principles for quantifying damages in unfair dismissal cases. It emphasizes the duty to mitigate damages by seeking alternative employment and confirms that damages for unfair dismissal are limited to the reasonable period for finding alternative employment. The case also establishes that there is no legal basis under the Labour Act for compensating dismissed employees for illness that occurs after their dismissal, as statutory sick pay provisions only apply during employment. It serves as an important precedent on the limits of judicial discretion in awarding remedies not sought by parties and not grounded in law.