In 2002, the respondent was employed by the appellant (Zimbabwe Revenue Authority) as a Revenue Trainee on a fixed term contract of 36 months. The contract stipulated that upon successful completion of probation, the contract would run for 24 months, after which the authority could at its sole discretion offer permanent employment. In 2005, while based at Beitbridge Border post, the respondent was charged with failing to uphold ethical and professional standards and acts inconsistent with his employment contract. He was found guilty by a disciplinary committee and dismissed. At the time of dismissal, he had 6 months remaining on his fixed term contract. The respondent had also failed two core courses in November 2004 and supplementary exams in 2005. His appeal to the appeals committee was unsuccessful. He then appealed to the Labour Court, which held the dismissal was unlawful and ordered reinstatement or damages in lieu. The parties could not agree on quantum of damages, leading to the Labour Court ordering US$19,740.16 as back-pay and benefits plus 12 months' salary minus US$150.00 per month earned by respondent for 12 months. The appellant appealed this quantification to the Supreme Court.
1. The appeal was allowed with costs. 2. The Labour Court order was set aside and substituted with: (a) The appellant shall pay the respondent US$1,470.00 as back-pay and benefits less US$900.00 earned by the respondent from informal jobs over a period of six months.
Damages for unlawful termination of a fixed term employment contract must be calculated based on the unexpired period of that contract, not on a hypothetical extended period. The measure of damages is the actual loss suffered represented by the sum due for the unexpired period of the contract less any sum earned or reasonably earnable during that period. Damages in lieu of reinstatement are a substitute for reinstatement and must therefore be limited to what the employee would have received if reinstated for the remaining contractual period. Courts must give effect to the terms of fixed term contracts and cannot extend the period of engagement beyond what was agreed by the parties, as this would violate the principle of sanctity of contracts. Where a contract gives an employer sole discretion to offer permanent employment after a fixed term, and that discretion has not been exercised, there is no basis for awarding damages beyond the fixed term unless a legitimate expectation of permanent employment is established.
The Court made observations on the requirements for grounds of appeal, emphasizing that substance should prevail over form. The Court stated that what matters is that grounds must disclose the basis upon which the lower court's decision is impugned in a clear and concise manner, not that they follow a particular formulation. The Court also noted that Supreme Court Rules 1964 do not apply to appeals from the Labour Court. The Court observed that according to the Zimbabwe Revenue Authority Staff Training and Development Policy, a Revenue Trainee who fails to successfully complete level 2 and has a negative mentor's report will have their contract terminated at the end of the traineeship period, with only exceptional cases allowing one chance to re-sit failed subjects. This suggested that even without the unlawful dismissal, the respondent's employment would likely have been terminated at the end of the 36 months due to his examination failures.
This case establishes important principles in Zimbabwean labour law regarding the quantification of damages for unlawful dismissal where the employee was on a fixed term contract. It clarifies that damages must be limited to the unexpired period of the fixed term contract and cannot extend beyond the contractual term unless there is a legitimate expectation of renewal or permanent employment. The case reinforces the principle of sanctity of contracts in the employment context and establishes that courts cannot create new contractual obligations for parties. It provides guidance on distinguishing between permanent employees and fixed term contract employees when assessing damages for unlawful dismissal. The judgment also demonstrates the application of the principle that damages for breach of contract aim to place the injured party in the position they would have been in had the contract been performed, not in a better position.