Rodwell Jariremombe and 638 Others v National Social Security Authority

The applicants were 639 employees of the National Social Security Authority (NSSA), a statutory body established under the National Social Security Authority Act [Chapter 17:04]. The employees sought a declaratory order compelling NSSA to pay their 2016 annual bonuses. NSSA had consistently paid annual bonuses to its employees for over two decades in terms of clause 32 of the Employment Conditions of Service, which stated: "Authority employees shall be paid annual bonus as per terms defined by the Board from time to time." In December 2016, NSSA's General Manager released a memorandum announcing that the 2016 annual bonus would not be paid due to harsh economic conditions. The employees' Works Committee engaged with management but failed to reach agreement. The employees had previously successfully challenged an attempt in 2010 to replace the annual bonus with a performance-related bonus, with an arbitrator ordering payment of a 13th cheque as annual bonus. NSSA had budgeted for the 2016 bonus, and the budget was approved by responsible authorities. The employees argued that the bonus was a mandatory contractual right based on the use of the word "shall" in clause 32.

• Whether the High Court had jurisdiction to entertain the application or whether domestic labour remedies under section 93 of the Labour Act should have been exhausted first
• Whether the application was properly constituted as one for a declaratory order
• Whether clause 32 of the Employment Conditions of Service created a mandatory legal obligation to pay annual bonuses or whether it conferred discretionary power on the NSSA Board
• Whether the interpretation of clause 32 must be read subject to the provisions of the National Social Security Authority Act and its Schedule
• Whether the use of the word 'shall' in clause 32 made the payment of bonuses peremptory
• Whether past practice of paying bonuses converted a discretionary benefit into a contractual right

The application was dismissed with costs on the ordinary scale.

The binding legal principles established are: (1) The High Court has jurisdiction to entertain applications for declaratory orders in labour disputes, as the Labour Court has no power to grant declaraturs. (2) Employment conditions of service for statutory bodies must be interpreted subject to and consistently with the enabling statute and cannot create obligations contrary to the statute. (3) The use of the word "shall" in a provision does not automatically make it peremptory; courts must examine the entire scope, context and object of the provision to determine whether it is mandatory or directory. (4) Where a clause grants a body discretion to define terms "from time to time" or "as it considers fit," this indicates discretionary rather than mandatory power. (5) Bonuses and allowances are presumptively discretionary privileges rather than contractual rights unless clearly made mandatory. (6) Past practice of granting discretionary benefits, even consistently over many years, does not convert such benefits into vested contractual rights or remove the employer's discretion. (7) A discretionary benefit remains discretionary despite having been previously granted, and continuous practice does not take away the employer's discretion.

The court made several non-binding observations: (1) The applicants failed to properly couch their declaratory relief by combining the declaratur with consequential relief (an order ad factum praestandum) in the same paragraph, but the court could correct this defect as a draft order is not binding on the court. (2) Even if the court was wrong in holding that the application was for a declaratur, failure to exhaust domestic remedies under section 93 of the Labour Act would not oust the High Court's jurisdiction - the court could still determine the matter. (3) While costs on a higher scale were sought, the court declined to award them as the application was not an abuse of process given that the wording of clause 32 using "shall" and the decade-long practice of paying bonuses gave the applicants a reasonable basis to believe they had a right to the bonus. (4) The court noted that remuneration includes wages plus allowances, bonuses and other benefits, and that at common law wages are distinguishable from allowances and bonuses, with the employer having a duty to pay wages but not necessarily bonuses and allowances. (5) Benefits come in two categories: contractual and discretionary, with bonuses usually being discretionary.

This case is significant in Zimbabwean labour law for clarifying several important principles: (1) The High Court has jurisdiction to grant declaratory orders in labour matters even where the Labour Court would otherwise have jurisdiction, as the Labour Court cannot grant declaraturs. (2) The mere use of the word "shall" in employment conditions or contracts does not automatically create a peremptory obligation - courts must examine the entire provision and its context. (3) Past practice of granting discretionary benefits, even over extended periods, does not convert such benefits into contractual rights. (4) Employment conditions of service for statutory bodies must be interpreted consistently with their enabling legislation and cannot confer rights contrary to the statute. (5) Bonuses are presumptively discretionary privileges rather than rights unless clearly made mandatory by contract or statute. The case provides important guidance on the distinction between contractual and discretionary benefits in employment relationships and reinforces the principle that employers retain managerial discretion over discretionary benefits notwithstanding past practice. It also demonstrates the court's approach to interpreting employment conditions in the context of statutory employers.