Zimbabwe Amalgamated Railway Workers Union v Beitbridge Bulawayo Railway (Pvt) Ltd

In June 2009, the applicant union and the respondent employer could not reach agreement on whether retrenchment of workers was necessary. The respondent proceeded with retrenchment notices and eventually the parties agreed to refer the matter to arbitration. The agreed terms of reference for the arbitrator were narrow: to determine whether the respondent had followed the correct procedure in seeking to effect the retrenchment. After a hearing, the arbitrator handed down her determination on 23 September 2009. The arbitrator not only determined the procedural issue referred to her, but also ordered the retrenchment of an additional 35 employees who had not been part of the original agreement negotiations. The applicant union challenged this determination on the basis that the arbitrator exceeded her mandate and dealt with issues beyond the agreed terms of reference. The respondent raised several points in limine including that voluntary arbitration awards are not reviewable, lack of locus standi, disputes of fact, and that employees had waived their rights by accepting retrenchment packages deposited into their accounts.

• Whether a voluntary arbitration award can be set aside by the High Court under Article 34 of the Arbitration Act
• Whether the applicant union had locus standi to bring the application
• Whether the arbitrator exceeded her mandate by making determinations beyond the agreed terms of reference
• Whether employees waived their right to contest the determination by having retrenchment packages deposited into their bank accounts
• Whether the matter should have been referred to the Labour Court under section 89 of the Labour Court Act

1. The arbitrator's determination is set aside in its entirety. 2. The 1st respondent is to pay the costs.

An arbitral award may be set aside by the High Court under Article 34(2)(a)(iii) of the Arbitration Act where the award deals with disputes not contemplated by or not falling within the terms of submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration. An arbitrator who exceeds their agreed terms of reference by making orders on matters not referred to them acts ultra vires their mandate, and such portions of the award are liable to be set aside. Depositing retrenchment packages into employees' bank accounts without their knowledge does not constitute waiver of rights to challenge the arbitration determination, particularly where the employees tender return of the money.

The court observed that while it agreed in principle with the arbitrator's desire to bring the matter to finality given its protracted history, finality can only be properly achieved by making the correct decision. The court noted that although Article 34(2)(a)(iii) provides for the possibility of separating valid portions of an award from invalid portions, such separation was not appropriate in this case because even the determination on the issue properly referred to the arbitrator was contradictory, as the arbitrator pointed out procedural deficiencies but then concluded that correct procedure had been followed. The court also commented that the number of affidavits filed did not make any material difference as the challenge concerned a principle applicable to the making of the award rather than individual circumstances.

This case is significant in Zimbabwean jurisprudence as it clarifies the scope of judicial review of voluntary arbitration awards under the Arbitration Act. It establishes that while parties are bound by an arbitrator's determination on matters properly referred to arbitration, the High Court retains supervisory jurisdiction under Article 34 of the Arbitration Act to set aside awards that exceed the arbitrator's mandate. The case reinforces the principle that arbitrators must strictly confine themselves to the terms of reference agreed by the parties and cannot make determinations on issues not submitted to them. It also confirms the locus standi of trade unions to bring such applications on behalf of their members in terms of section 29 of the Labour Act.