The appellant was engaged by the respondent in February 1982 as senior accountant and was appointed managing director on 1 November 1991. The contract of employment allowed either party to terminate on six months' notice. The relationship between the appellant and the Board of Directors became strained. In 1995, an investigation into the appellant's activities was undertaken by the Criminal Investigation Department but no charges were laid. On 12 March 1997, the appellant was placed on paid leave. On 21 July 1997, the Chairman sought ministerial approval under the Labour Relations Regulations to terminate the appellant's employment. The Minister replied on 3 March 1998 advising that he had no jurisdiction as the appellant was covered by ZUPCO's registered Code of Conduct. On 27 May 1998, the respondent gave six months' notice to terminate the appellant's employment, citing loss of confidence. The appellant contended that termination required either ministerial approval or procedures under the Code of Conduct. The High Court dismissed the appellant's application.
The appeal was allowed with costs. The order of the court a quo was altered to grant the relief sought by the appellant in annexure G to his application, declaring that the respondent was not entitled to terminate the appellant's employment on six months' notice without first obtaining the sanction of the Minister.
Where an employer's registered Employment Code of Conduct does not make provision for disciplinary procedures applicable to a managing director, that Code of Conduct cannot be said to apply to the managing director for purposes of section 1A of SI 377 of 1990. Consequently, sections 2 and 3 of the Labour Relations (General Conditions of Employment) (Termination of Employment) Regulations SI 371 of 1985 are not exempted, and the employer must obtain prior written approval from the Minister before terminating the managing director's employment. A managing director may simultaneously hold office as a director and be an employee of a company, depending on the terms of the contract.
The Court observed that the managing director is the most important employee and stands on at least equal footing with other individual directors, bearing ultimate responsibility to the Board of Directors which has authority over him. The Court noted it would be an invidious practice for an inferior official (such as a human resources manager) to be required to discipline a senior managing director. The Court also remarked that it is highly improbable that drafters of a Code of Conduct would forget to include the managing director in the hierarchy of employees subject to disciplinary procedures if it were ever intended that such procedures should apply to that position.
This case is significant in Zimbabwean labour law for establishing important principles regarding the employment status of managing directors and the application of codes of conduct. It clarifies that a managing director can occupy dual positions as both director and employee, but codes of conduct must make explicit provision for disciplinary procedures applicable to managing directors for such codes to apply. The case reinforces the protection afforded to employees under labour relations regulations and limits employers' ability to avoid ministerial oversight requirements through employment codes of conduct that do not genuinely cover all categories of employees. It demonstrates careful statutory interpretation where exemptions from protective labour legislation are claimed.