QUANTIFICATION OF DAMAGES IN LIEU OF REINSTATEMENT
Introduction
The legal principles behind the quantification of damages in lieu of reinstatement have been
clearly ascertained by our courts. The Labour Act (Chapter 28:01) provides for various forms of
reliefs in cases of unfair labour practices. The reliefs include, but are not limited to, an order for
back pay, damages for prejudice suffered because of the unfair labour practice and
reinstatement (Section 89 (2) (C) of the Act). The relief of reinstatement is only awarded
provided that a court or tribunal stipulates that damages are also payable as an alternative to
an employee’s reinstatement or employment. The main aim of this article is thus to outline the
law that operates in the sphere of quantification of damages as an alternative to reinstatement.
I start with a review of the Labour Amendment Act (2015) and will then look into the various
principles of damages in lieu of reinstatement, which principles have been developed by our
courts.
Labour Amendment Act (2015) and Damages In lieu of Reinstatement
Some legal writers have commented that, by enacting section 12C of the Labour Amendment
Act (2015), the legislature, has come up with a legal way of computing damages in lieu of
reinstatement1. The section 12C of the Labour Amendment Act provides for a minimum
retrenchment package that is payable to an employee whose termination is occasioned by a
retrenchment exercise, mutual agreement and upon expiry of a contract. The authors go on to
argue that getting the minimum retrenchment package as well as the “traditional damages” can
be seen as “double dipping”. I do not share the same views. In this section I will point out that
the minimum retrenchment package as well as the damages in lieu of reinstatement are two
different aspects of our labour law and that the legislature did not do away with what may be
termed as traditional damages in lieu of reinstatement. The discussion will not go into whether
or not the compensation contemplated by Section 12C is fair or not.
The starting point of my argument is that the Labour Amendment Act (2015) did not repeal
section 89(2) (C) (iii) of the Act2 which empowers the Labour Court to order reinstatement upon
a finding of wrongful dismissal. I submit that an inquiry into whether a dismissal was fair or not
is independent of whether or not someone received a compensation for loss of employment. It
is further argued that receiving the compensation for loss of employment cannot be interpreted
as “full and final settlement” of payable damages in lieu of reinstatement. Such an interpretation
would mean that every dismissal / termination is presumably unfair and that the employee is
supposed to receive damages in lieu of reinstatement. It would also mean that upon a finding
that an employee has been unfairly dismissed such employee is entitled to nothing having
received compensation in terms of section 12C of the Labour Amendment Act. I believe that
such an interpretation would be absurd.
Secondly, the golden rule of statutory interpretation dictates that words in an enactment should
be given their ordinary grammatical meaning3 unless this would lead to absurd results4. There
is nothing in the wording of section 12C that suggest that the section replaced damages in lieu
of reinstatement with the compensation of loss of employment. In any case it is argued that
damages in lieu of reinstatement are only available to employees whose termination is wrongful
and compensation for loss of employment is available to every employee whose termination is
lawful.
Period of Damages in lieu of reinstatement
The starting point for the computation of these damages is the date of wrongful dismissal5.The
date of unfair/wrongful dismissal has been seen by our courts as “fixed and immutable” and that
it is “not capable of being shifted, even metaphorically6”. Whilst the starting date for computing
the damages can be easily ascertained, the end date can be a subject of controversy and
debate. The last date for the computation of the damages is complicated by a need to mitigate
any loss arising from the wrongful dismissal, which obligation falls on every unfairly dismissed
employee. In Ambali v Bata Shoe Co Ltd7 the court pointed out that,
“I think it is important that this Court should make it clear, once and for all, that an
employee who considers, whether rightly or wrongly, that he has been unjustly
dismissed, is not entitled to sit around and do nothing. He must look for alternative
employment. If he does not, his damages will be reduced. He will be compensated
only for the period between his wrongful dismissal and the date when he could
reasonably have expected to find alternative employment. (emphasis added)
It follows, therefore, that employees are under an obligation to look for alternative employment
upon being dismissed. In determining the period within which the employee can “reasonably
have expected to find alternative employment” a court is bound to make use of evidence
adduced by the parties to the dispute (see Hongyu Enterprises V Phillip Mafoti 8 and Delta
Beverages (Pvt) Ltd v Murandu9). In the absence of such evidence a court is bound to refer the
matter back to the court that entertained the dispute in the first instance. This is exactly what
happened in Hongyu Enterprises case.
When considering “the period between his wrongful dismissal and the date when he could
reasonably have expected to find alternative employment” for the purpose computing the
damages, various factors are taken into account. Such factors include reasonable attempts by
the employee to find alternative employment, the skills of the employee10 and the performance
of the whole economy to mention a few.
Computation of Damages
The actual computation of the monetary values of the damages is not an easy task. A court can
direct that parties to a dispute agree on an amount payable as damages11. In the event of a
disagreement ensuing the court may direct the parties to revert to it for a determination (See
James Mataga v The Commissioner of Prisons and The Director (SSB))12. Most cases of
wrongful termination have ended up reverting to the courts or arbitration tribunals so that
damages in lieu of reinstatement can be established.
The computation of damages, like the period within which an employee is reasonably expected
to have found employment, should be supported by evidence13 adduced by the parties to the
dispute. In Erickson Mvududu v Agricultural and Rural Development Authority 14 the court
rightfully set aside an award of damages to the tune of sixty month’s salary solely because
these damages were not supported by any evidence adduced by the parties to the dispute. It
was in this regard that the court remarked as follows;
“Although it is trite that damages need not be quantified with mathematical precision,
there must be some evidentiary basis for calculating damages, even if they be
punitive damages.” (emphasis added)
Our courts have been seized by litigation that spanned over the period between the Zimbabwe
dollar era as well as the multi-currency regime. In such cases the courts had no option but to
award reliefs that were just. University of Zimbabwe v Sibanda15 is a case in which the court
pointed out that;
“The Zimbabwean dollar is no longer in use since the beginning of the multicurrency
system. For the Arbitrator to give the award in Zimbabwe dollars the social justice which
the Labour Act is seeking to address will not be done. Such orders will only be
academic and will not meet the justice of the case.”
The court went further to pronounce that awarding damages in lieu of reinstatement in values
that were in the United States Dollar is proper and legal under the circumstances. Earlier
judgements had realised the need to award damages in a currency that is functional at the time
of the order16.
It has also been determined that the jurisdiction to covert damages from the old currency
(Zimbabwean Dollar) to the United States Dollar is that of the Labour Court 17 and not any other
court or tribunal. This authority is found in terms of 2A of the Labour Court Act which provides
for advancement of social justice and democracy in the workplace by securing the just, effective
and expeditious resolution of disputes and unfair labour practices18.
Mindful of the fact that converting a currency from Zimbabwe Dollar to US Dollar is not an easy
task, the court in Madhatter Mining Company v Marvellous Tapfuma recommended the
appointment of an expert. The court thus mentioned;
“I would accordingly venture to suggest to the Labour Court that it considers enlisting
the services of an appropriately qualified expert in financial matters, in order to work out
a formula for calculating the damages in question”
It is submitted that the computation of damages in lieu of reinstatement is not an easy task.
Employees are under an obligation to find alternative employment and to avoid banking on a
claim that is before a court. The process, like any court process must be supported by evidence
and it is important to point out that such evidence must be, as far as possible, written evidence.
Circumstances that will lead to awarding of the damages
The Act stipulates that such damages are only awarded when the employment relationship “is
no longer tenable”. The Act does not suggest a direction as to what may constitute an
employment relationship that is no longer tenable. The Courts have since shed more light on
the circumstances that will lead to the awarding of the damages. The purpose of awarding
damages, as an alternative to reinstatement, is to protect the employer from being forced to
reemploy an employee in situations were normal relations between the employer and the
employee had broken down19.
In Elvis Ndlovu v Higher Learning Centre20 an employee was awarded a relief of reinstatement
but the employer refused to comply with the award and further refused to pay any outstanding
salaries. The employee was subsequently awarded a relief damages since reinstatement had
failed.
Damages may also be awarded when an employer or his representative expressly stipulate that
reinstatement is no longer an option. This case was a subject of debate in Mvududu v
Agricultural and Rural Development Authority where the employer had written to the employee
legal representative that the employer was preferring payment of damages in lieu of
reinstatement. Even though the communication was made “without prejudice” the Court noted
that this was an indication that damages in lieu of reinstatement were proper.
Further, a consent order can also provide for damages in lieu of reinstatement. A consent order
emanates from an agreement between parties to a dispute which is recorded as an order of a
court. In Telecel Zimbabwe Private Limited v Sibangani Mabore such as consent order was the
subject of the dispute. Parties to a labour dispute may also mutually agree that the employee is
entitled to damages in lieu of reinstatement upon a finding of unfair dismissal 21.
Enforcement of Damages
Damages in lieu of reinstatement can be enforced, in terms of section 98 (4) of the Act in the
case of an arbitration award, and in terms of section 92B (3) of the Act, in the case of Labour
Court Judgement, by registering the award either in High Court or The Magistrates Court.
For an award of damages to be enforceable it must have a specific amount. In Khumalo v
Ingwebu Breweries22 the High Court refused an application for the registration of an award
because “the arbitrator should have done the calculation and arrived at a specified amount...”.
The court further pointed out that the authority for quantification of damages is that of the
Labour Court or Arbitration Tribunal.
Conclusion
It is reemphasised that the quantification of damages in lieu of reinstatement is not an easy
matter. Various legal principles have been laid out by the courts. The important principle is that
an employee should mitigate his or her loss by finding alternative employment. If the employee
does not endeavour to look for employment he or she will face a reduction in his or her
damages. The quantification of damages may at times be complicated by the fact that a dispute
occurred between the Zimbabwe dollar era as well as the multi-currency era. In some cases,
financial experts have been recommended by the courts. It is always important for parties to a
dispute to avoid plucking figures from the air and ensure that tangible proof backs their
submissions.
A review of some critical sections of the Labour Amendment Act No. 5 of 2015 by Caleb
Mucheche LLB (Hons) UZ, LLM Labour Law.
2 Labour Act (Chap 28.01)
3 Nyamande & Another v ZUVA Petroleum (Pvt) Ltd (SC 281/14)
4 Botha CJ 2012 Statutory interpretation: an introduction for students 5 ed Juta
5 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
6 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
7 1999 (1) ZLR 417
8 SC 43/07
9 SC38/15
10 Telecel Zimbabwe Private Limited v Sibangani Mabore (SC 50/13)
11 Hongyu Enterprises v Phillip Mafoti (SC 43/07)
12 HC11064/01
13 Redstar Wholesalers v Edmore Mabika (SC 52/05)
14 SC 58/2015
15 LC/H/905/12
16 Gift Bob David Samanyau & Ors v Fleximail (Pvt) Ltd (HH 108 – 11)
17 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
18 Madhatter Mining Company v Marvellous Tapfuma (SC 51/14)
19 Mtetwa v Business Equipment Corporation (SC 25/04)
20 HC 583/09
21 Tendai Zizhou v Barclays Bank (LC/H/57/14)
22 HC 2972/13
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Taurai Mrewa is a Human Resources Practitioner by profession. He holds BSc Psychology (UZ), Dip Labour
Relations (IPMZ), Dip Personnel Management (IPMZ) & Third Year Law Student (UNISA).
He can be contacted on murehwa.taurai@outlook.com
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