Rainbow Tourism Group v Richard Nkomo

In December 2010, Rainbow Tourism Group (appellant) appointed Richard Nkomo (respondent) as General Manager of Rainbow Towers Hotel & Conference Centre, effective 1 January 2011. The appointment letter provided for a three-month probationary period ending 30 March 2011, after which a five-year executive employment contract was to be negotiated. This contract was never negotiated, making the respondent an employee on a contract without limit of time by operation of law under section 12(3) of the Labour Act. During 2011-2012, the respondent's performance was problematic. Internal audits revealed violations of company policy regarding motor vehicle loans and excessive entertainment expenses. The hotel's performance deteriorated, with the unit becoming technically insolvent with a negative cash adequacy of US$1.1 million by November 2012. On 22 November 2012, the appellant transferred the respondent to A'Zambezi River Lodge in Victoria Falls at the same level and remuneration, citing the need to expose him to a unit without operational problems and allow him to acclimatize to the RTG culture and Zimbabwean hospitality industry. The respondent objected through his lawyers on 23 November 2012, citing that his contract appointed him specifically to Rainbow Towers and that his wife required specialist medical care unavailable in Victoria Falls. On 30 November 2012, the respondent claimed constructive dismissal. He did not report for duty on 1 January 2013. The appellant held disciplinary proceedings on 1 February 2013 for absenteeism. An arbitrator upheld the constructive dismissal claim and ordered reinstatement. The Labour Court dismissed the appellant's appeal.

• Whether the appellant's conduct in transferring the respondent deliberately made continued employment intolerable for him, constituting constructive dismissal under section 12B(3) of the Labour Act
• Whether the respondent terminated his employment contract because of the employer's conduct
• Whether the respondent was bound by the transferability clause in the company's code of conduct despite not having received the booklet mentioned in his employment letter
• Whether the respondent acted promptly in claiming constructive dismissal
• Whether the employer had the right to transfer the respondent to a different location

The appeal was allowed with costs. The judgment of the Labour Court was set aside and substituted with an order allowing the appeal with costs and setting aside the arbitrator's award.

1. Where a contract of employment without limit of time does not contain a specific stipulation restricting employment to a particular location, the employee is bound by general organizational transferability clauses and the employer retains the prerogative to transfer the employee. 2. To establish constructive dismissal under section 12B(3) of the Labour Act, an employee must prove: (a) the employer committed conduct constituting a significant breach going to the root of the employment contract; and (b) the employee terminated employment promptly by either leaving instantly or giving notice. 3. An employee who continues to perform work, accept salary and benefits, and participate in employment-related processes (such as disciplinary proceedings) after the alleged breach cannot be regarded as having been constructively dismissed, as such conduct demonstrates an election to affirm the contract rather than terminate it. 4. Senior employees who are responsible for implementing company policies cannot claim they are not bound by those policies on the basis that they did not personally receive written copies, where it would be reasonable to expect them to be familiar with such policies in the course of their duties. 5. The employer's right to transfer an employee is a managerial prerogative that should not be interfered with except for good cause shown, such as unfounded allegations, victimization, or demonstrable disadvantage.

The court made several observations that, while not essential to the decision, provide guidance: 1. Ziyambi JA noted that given the respondent's poor performance over two years and the hotel's near-insolvency under his management, the employer would have been within its rights to terminate the employment contract on notice, but chose the more lenient option of a lateral transfer instead. 2. The court observed that it seemed "childish" for a General Manager to submit ignorance of the company code of conduct when he would have been responsible for drawing subordinate employees' attention to it. 3. The court commented that the transfer to Victoria Falls, a tourism hub, with no reduction in benefits and the opportunity to share expertise, could not reasonably be characterized as making employment intolerable. 4. While noting the absence of evidence that the appellant was aware of the respondent's wife's medical condition, the court indicated that even if such awareness existed, it would not restrict the employer's transfer rights absent a specific contractual provision. These observations reflect the court's view that the claim was without merit and that the respondent's approach lacked good faith.

This case is significant in Zimbabwean labour law (which shares substantial similarities with South African labour law) for establishing key principles regarding constructive dismissal and employer's rights to transfer employees. It clarifies that: (1) employees on contracts without limit of time are generally bound by organizational transferability clauses unless their contract specifically restricts employment to a particular location; (2) poor performance can justify lateral transfers as a remedial measure rather than dismissal; (3) employees claiming constructive dismissal must act promptly and cannot continue to accept employment benefits while claiming the employment relationship has been terminated; (4) senior employees cannot claim ignorance of company policies they would be responsible for implementing; and (5) the employer's prerogative to transfer employees should not be readily interfered with except for good cause shown. The case reinforces that constructive dismissal requires both employer conduct going to the root of the contract and prompt responsive action by the employee treating the contract as terminated.