The two applicants were former employees of the respondent. On 10 June 2016, the respondent wrote to employees inviting applications for voluntary retirement due to financial constraints. The applicants applied for voluntary retirement on 14 June 2016. On 26 July 2016, the respondent accepted their applications and advised that processing of their voluntary retrenchment packages was in progress. On 12 August 2016, the parties signed memoranda of agreement for voluntary retrenchment drafted by the respondent, setting out retrenchment packages of US$11,452.00 and US$13,372.00 respectively. The agreements terminated the employment contracts effective 31 August 2016. However, on 31 August 2016, the respondent wrote to the applicants advising them that it was unable to continue with the retrenchment process and that they should report back to work on 1 September 2016. The applicants refused to return to work and sought a court order declaring the voluntary retrenchment agreements valid and binding and ordering payment of their retrenchment packages.
1. The memorandum of agreements of voluntary retrenchment signed on 12 August 2016 between the applicants and the respondent were declared valid and binding between the parties. 2. The respondent was ordered to pay the applicants their retrenchment packages forthwith in the sums of US$11,452.00 and US$13,372.00 respectively. 3. The respondent was ordered to pay costs of suit at an attorney and client scale.
A voluntary retrenchment agreement negotiated and concluded between an employer and employee, reduced to writing and signed by both parties, constitutes a valid and binding contract that terminates the employment relationship by mutual consent. Once such an agreement is concluded, the employer cannot unilaterally cancel it and require the employee to return to work. Agreement by consent is the foundation of contract, and where there is a true offer with express or implied intention to be bound by the offeree's acceptance (animus contrahendi), a binding contract is formed. Private voluntary retrenchment agreements concluded without reference to the Labour Act procedures or Ministerial approval are distinguishable from statutory retrenchments and are enforceable as ordinary contracts. The High Court retains jurisdiction over such contractual disputes arising from employment relationships notwithstanding the creation of the Labour Court.
The court made critical observations about legal practice, stating that reliance on technicalities in the hope that matters may be disposed of on them to avoid exposing the weakness of one's case is 'an undesirable tactic used by lawyers where they notice that their client's case is weak.' The court also observed that throughout the matter, the respondent should have been aware that it had no case but was 'intransigently bent on taking chances using legal nomenclature and technicalities.' The court further noted that the respondent's conduct in changing its mind after drafting and signing a clear agreement and then attempting to unilaterally cancel it was simply an attempt to renege on its obligations.
This case is significant in Zimbabwean labour and contract law for establishing that: (1) voluntary retrenchment agreements negotiated and signed privately between employer and employee constitute binding contracts that cannot be unilaterally cancelled by the employer; (2) the High Court retains jurisdiction over contractual disputes arising from employment relationships and the creation of the Labour Court did not oust the High Court's constitutional and statutory jurisdiction; (3) such private voluntary retrenchment agreements are distinct from statutory retrenchments conducted under the Labour Act requiring Ministerial approval; and (4) courts will enforce completed contractual agreements for voluntary retrenchment and will not permit employers to renege on such agreements after conclusion. The case also demonstrates the court's intolerance for tactical reliance on technicalities to avoid addressing the substantive merits of weak cases.