WORKERS are now at the mercy of employers after the Supreme Court ruled yesterday that companies can lawfully terminate their contracts at any time without offering them packages, provided they are given at least three months notice. Termination of contract on notice becomes the cheaper way of firing workers for firms as they do not have to give any explanation or conduct disciplinary hearings, let alone follow the expensive retrenchment route.
Labour experts described the ruling as a serious threat to job security in the country, as workers may be asked to leave employment empty-handed at any time, while employers feel the ruling will go a long way in lowering employment costs.
The interpretation of the law was made in a landmark judgment in which two former Zuva Petroleum managers, Don Nyamande and Kingstone Donga,were challenging termination of their contracts under the same circumstances.
Chief Justice Godfrey Chidyausiku and four other judges, sitting as a Supreme Court, unanimously agreed that the common law position placing employees and employers on an equal footing was still operational.
As a result of that common law position, employers have the same right to give notice and terminate employment, in as much as a worker can do the same.
“It is common cause that once upon a time, the employer and the employee had a common law right to terminate an employment relationship on notice,” reads the judgement.
“That common law right in respect of the employer and employee can only be limited, abolished or regulated by an Act of Parliament or a Statutory Instrument that is clearly intra vires an Act of Parliament.
“I am satisfied that Section 12B of the (Labour) Act does not abolish the employer’s common law right to terminate employment on notice in terms of an employment contract for a number of reasons.”
Advocates Thabani Mpofu and Nelson Chamisa, instructed by Mr Innocent Chagonda of Artherstone and Cook represented Zuva Petroleum, while Professor Lovemore Madhuku and Mr Caleb Mucheche acted for the two managers.
Chief Justice Chidyausiku said in the judgement that Section 12(4) of the Labour Act was the one that regulates the period of notice and it reads:
“Except where a longer period of notice has been provided under a contract of employment or in any relevant enactment, and subject to subsections (5), (6) and (7), notice of termination of the contract of employment to be given by either party shall be —
a) Three months in the case of a contract without limit of time or a contract for a period of two years or more;
b) Two months in the case of a contract for a period of one year or more, but less than two years;
c) One month in the case of a contract for a period of six months or more, but less one year
d) Two weeks in the case of a contract for a period of three months or more, but less than six months
e) One day in the case of a contract for a period of less than three months or in the case of casual work or seasonal work”.
To that end, the Supreme Court concluded that the Labour Court was correct in allowing Zuva Petroleum to terminate Nyamande and Donga’s employment contracts on notice.
“It is for these reasons that I agree with the conclusion of the Labour Court that the respondent was entitled at law to give notice terminating the employment of the appellants in terms of the contracts of employment between the parties,” the court ruled.
“Accordingly, the appeal fails and is hereby dismissed with costs.”
After the judgement, Mr Chagonda gave his interpretation of the court decision.
“The judgement reinforces the common law right of an employer to terminate the contract of employment on notice that the parties have agreed to in their contract,” said Mr Chagonda.
“Where the contract of employment does not specify a notice period, Section 12(4) of the Labour Act specifies the notice period to be given and the maximum period being three months.”
Mr Chagonda said workers will now go home empty-handed.
“If the employer wishes, you are required to work and get your normal salary for the three months notice period and after the expiry of the notice period, the worker leaves employment empty-handed,” he said.
“Some companies may opt to just pay the workers their three months’ salary at once without working and ask him or her to leave immediately.”
Another lawyer who refused to be named said: “Employers no longer have to go through the expensive retrenchment process or to conduct any disciplinary hearings. They will simply ask the workers to go without giving any reasons for no cost.”
The lawyer said the common law position has its roots in the traditional “Master and Servant relationship”. herald