J Chipunza, E Chihota, A Chiripamberi, B Chitsa, N Mashazhu, J Mataruse, M Miti, R Mkwanila, S Mukuze, S Nansabi, J Ngwaya, C V Sibanda v Beverley Building Society

The applicants were 12 managers employed by the respondent building society. In 2001, the respondent embarked on a restructuring exercise resulting in a decision to retrench 17 managers. Letters of termination dated 31 May 2001 were sent offering retrenchment packages. The applicants did not accept the packages. The respondent withdrew the letters after realising non-compliance with the Labour Relations (Retrenchment) Regulations, 1990 (SI 404 of 1990). Several meetings were held between June and August 2001 but the parties failed to reach agreement. The respondent referred the dispute to the Retrenchment Committee on 7 August 2001. The Ministry advised on 20 September 2001 that the application to retrench the applicants was not approved. Meanwhile, the respondent awarded salary increases to other employees, stopped paying the applicants various benefits (school fees, motor vehicle allowances, sports club subscriptions), failed to pay their 2001 bonuses, and changed their salary payment dates. Eventually, by letter dated 22 April 2002, the respondent stopped paying their salaries altogether pending dispute resolution. The respondent had obtained an order from Omerjee J on 25 January 2002 in case HC 9926/01, which the applicants now sought to rescind.

• Whether employees proposed for retrenchment remain entitled to salaries and benefits pending ministerial approval under the Retrenchment Regulations
• Whether employees are entitled to salary increases and bonuses granted across the board to other employees during the retrenchment approval process
• Whether the order granted by Omerjee J should be rescinded on the grounds of good and sufficient cause
• Whether applicants should have exhausted domestic remedies before approaching the court
• Whether wilful default in failing to oppose an application precludes rescission of a default judgment

1. The respondent shall continue to pay the applicants their salaries, adjusted upwards by 18.5% with effect from 1 July 2001 and 13% with effect from September 2001, together with any further adjustments granted to employees generally across the board, until such time as the Minister has approved their retrenchment. 2. The respondent shall grant the applicants a bonus equal to any bonus granted across the board to its employees in 2001 who are on the same grade as the applicants. 3. The respondent shall continue to pay the applicants the benefits relating to school fees, motor vehicles and sports club subscriptions at the level they were being paid when the application for approval of their retrenchment was made. 4. The respondent shall pay the applicants costs in connection with cases No HC 11602/01 and HC 3953/02. 5. The application for rescission in case No HC 1687/02 is dismissed with costs.

Until the Minister's decision on retrenchment approval has been reached under the Labour Relations (Retrenchment) Regulations, 1990, employees whom the employer proposes to retrench remain employees on the payroll and are entitled to their salaries and all contractual benefits, including across-the-board salary increases and bonuses granted to other employees during the retrenchment approval process. An employer cannot lawfully withhold salaries or benefits from employees during the pendency of the retrenchment approval process. For rescission of a default judgment, the test is whether the applicant has established good and sufficient cause; wilful default is a factor to be considered but is not decisive and does not automatically preclude rescission where other good and sufficient cause exists.

The court observed that where a party wishes to raise the issue that domestic remedies should first be exhausted, this should be done in the opposing affidavit to give the other party an opportunity to reply, rather than raising it for the first time in heads of argument. The court noted that the existence of domestic remedies does not oust the court's jurisdiction, and the court will consider various factors in deciding whether to exercise jurisdiction, including whether the tribunal, its procedures and powers are suited to redress the particular wrong. The court commented that the Legislature clearly considered speed to be of importance in retrenchment matters, as evidenced by the two-week timeframes prescribed in sections 5 and 6 of the Retrenchment Regulations. The court also observed that if a labour consultant makes a mistake on a vital point, one would expect an affidavit from the consultant admitting the mistake and setting out the circumstances.

This case is significant in Zimbabwean labour law for establishing that employees proposed for retrenchment retain their full employee status, including entitlement to salaries, benefits, and across-the-board increases and bonuses, until ministerial approval of the retrenchment is granted. It reinforces the principle from Kadir & Sons that employees remain on the payroll during the retrenchment approval process. The judgment also clarifies the test for rescission of default judgments, confirming that while wilful default is a relevant factor, it is not automatically decisive and must be considered alongside other factors in determining whether good and sufficient cause exists. The case demonstrates judicial protection of employee rights during protracted retrenchment processes and the importance of speed in retrenchment matters as contemplated by the Retrenchment Regulations.