T.M Pick 'N' Pay v Damson Mawana and The Sheriff of Zimbabwe

The applicant (T.M Pick 'N' Pay) dismissed the first respondent (Damson Mawana) on 5 June 2012. The first respondent challenged his dismissal through arbitration. On 16 December 2016, Arbitrator Kazembe ordered reinstatement and in the alternative, payment of back pay and damages. After the applicant failed to reinstate the respondent, the arbitrator quantified damages at US$36,200.00 on 30 January 2017. The first respondent filed an application for registration of the arbitral award under HC 1450/17, which was granted on 4 April 2017. Meanwhile, the applicant paid US$21,456.00 on 8 March 2017 and claimed this was in full and final settlement pursuant to a deed of settlement dated 20 February 2017, allegedly concluded with the first respondent's agent (King Mugabe of Kimgae Services). The first respondent disputed authorizing the settlement and obtained a writ of execution on 18 January 2018, executing on 9 February 2018. The applicant then sought a permanent stay of execution, claiming full discharge of its debt through the settlement.

• Whether a deed of settlement concluded by an agent was valid and binding on the principal
• Whether the agent (King Mugabe) had authority to bind the first respondent to the settlement
• Whether fraud by an agent in collusion with the other contracting party affects the validity of a contract
• Whether a deed of settlement can supersede a registered arbitral award
• Whether an arbitral award, once registered with the High Court, constitutes a dispute that can be compromised

The application for permanent stay of execution was dismissed with costs.

The binding legal principles established are: (1) An arbitral award registered with the High Court under section 98(14) of the Labour Act becomes an order of court and remains extant unless set aside by the court; (2) A private deed of settlement cannot supersede a registered arbitral award that has become an order of court; (3) A compromise or settlement (transactio) is designed to resolve disputed claims that have not yet been determined - once a dispute has been resolved by an arbitrator exercising powers equivalent to the Labour Court, there is no longer a dispute capable of being compromised; (4) Where fraud is perpetrated by an agent of one party, particularly in collusion with the other contracting party, such fraud affects the validity of the contract and renders it voidable; (5) For a deed of settlement to be valid, it must be concluded by a properly authorized agent, and where the identity of the agent in the deed differs from the actual agent, the deed is invalid; (6) An arbitrator under the Labour Act has the same powers as the Labour Court pursuant to section 98(9), giving arbitral awards significant legal force.

The court made several non-binding observations: (1) The court noted the suspicious timing of the deed of settlement, concluded just three days after the application for registration was served, yet making no reference to the pending application; (2) The court observed that the applicant had eight months from becoming aware of the order in June 2017 to the filing of the application in February 2018 to challenge the order, but failed to do so; (3) The court commented that once an application is filed before the court, it must be either prosecuted to conclusion, withdrawn, or deemed abandoned - it does not 'suffer a stillbirth'; (4) The court noted inconsistencies in the agent's handling of funds, receiving payment through his own account contrary to the agreement that payment would be made directly to the first respondent; (5) The court observed that the payment by the first respondent of sheriff's fees for execution of the award was inconsistent with the conduct of a party who had authorized settlement for a lesser amount; (6) The court referenced the general principle that when no one is to blame, the loss must lie where it falls, though this was discussed in the context of third-party fraud rather than being applied directly to the facts.

This case is significant in South African and Zimbabwean labour law jurisprudence for several reasons: (1) it clarifies that registered arbitral awards have the force of High Court orders and cannot be superseded by private settlement agreements concluded after registration; (2) it reinforces the principle that arbitration is a final dispute resolution mechanism under labour legislation, and once an award is made, there is no longer a 'dispute' capable of being compromised; (3) it demonstrates the court's approach to examining agency relationships and the consequences of fraudulent conduct by agents, particularly where collusion with the other party is suspected; (4) it provides guidance on the requirements for valid settlement of labour disputes and the temporal limitations on such settlements once court processes have been initiated; and (5) it emphasizes that arbitrators under the Labour Act have the same powers as the Labour Court, giving their awards significant legal weight.