Retrenched Employees of National Breweries Limited as represented by Nathan Mudondo v National Breweries Limited and The Minister of Public Service, Labour and Social Welfare N.O.

In January 1999, National Breweries Limited (Natbrew) announced a restructuring exercise and advised employees that some would be retrenched. In February 1999, approximately 368 employees who were not accommodated in the new structure were offered a voluntary retrenchment package. Employees were asked to complete application forms stating they acknowledged the memorandum and applied for voluntary retrenchment, and that they "freely tender[ed] resignation" from Natbrew effective 1 May 1999. Nathan Mudondo and other employees signed these forms. On 30 April 1999, their lawyer wrote to Natbrew asserting the retrenchment was unlawful as it did not comply with the Labour Relations (Retrenchment) Regulations, 1990. The employees accepted the packages but sought to set aside the retrenchment on the basis that the proper retrenchment procedures had not been followed.

• Whether Nathan Mudondo had proper authority to represent the other retrenched employees in the court application
• Whether the employees resigned voluntarily or were unlawfully retrenched
• Whether the Labour Relations (Retrenchment) Regulations, 1990 were complied with
• Whether an employer can circumvent retrenchment regulations by characterizing termination as voluntary resignation
• Who terminated the employment contract - the employer or the employee

The appeal was dismissed with costs by the majority. Sandura JA would have allowed the appeal with costs and set aside the order of the court a quo, substituting it with an order that the application is granted with costs.

The majority held that where employees and employer mutually agree in writing to terminate employment under the Labour Relations (General Conditions of Employment) (Termination of Employment) Regulations, 1985, the retrenchment procedures under the Labour Relations (Retrenchment) Regulations, 1990 do not apply. An employee who voluntarily tenders resignation in writing and accepts a severance package cannot subsequently claim unlawful retrenchment, even if the employer initially intended to retrench and did not follow proper procedures. The dissenting ratio (not binding) was that courts must look at the substance of the transaction to determine who terminated employment. Where an employer has decided to retrench employees and offers them the option to either resign with a package or be retrenched anyway, this constitutes retrenchment by the employer, not voluntary resignation, and retrenchment regulations must be followed.

Sandura JA made important observations about how courts should determine whether employment was terminated by resignation or dismissal: the key question is always "Who really terminated the contract of employment?" regardless of formal documentation. He cited persuasive English authorities (Martin v MBS Fastenings, Robertson v Securicor Transport Ltd) establishing that a resignation will be treated as a dismissal if the employee is invited to resign and it is made clear that unless he does so, he will be dismissed. He also observed that employees unlawfully retrenched at the same time as the appellant who were not parties to the proceedings should obtain the same relief. The majority judgment confirmed that even under Rule 89 of the High Court Rules, 1971, a party claiming to represent others must produce evidence establishing proper authorization, especially where challenged, as costs orders could be made against represented parties. The court distinguished this situation from a class action.

This case highlights the tension between voluntary resignation and disguised retrenchment in Zimbabwean labour law. It demonstrates the difficulty employees face when employers structure terminations to appear voluntary while effectively compelling resignation. The case illustrates two competing approaches: the majority's formalistic approach focusing on the written resignation documents, versus the minority's substantive approach examining the economic reality and who actually terminated the relationship. The dissenting judgment provides important guidance on how courts should analyze whether a resignation was truly voluntary or constituted a dismissal/retrenchment in disguise, particularly relevant where retrenchment regulations provide employee protections. The case also addresses procedural issues regarding representation of multiple employees in labour disputes.