adminFidelis Munyoro Chief Court Reporter
Simbisa Brands’ decision to stop pension contributions for its workers has backfired after it was ordered to comply with the statutory obligation and remit more than $340 000 to the employment council representing them.
The company stopped remitting pension contributions to the National Employment Council for the Catering Industry in April 2016, prompting the council to approach the High Court for remedy.
Following the court’s ruling last month, the company now has to remit $346 972.32 outstanding pension contributions to the employment council, plus interest.
Justice Jester Helena Charewa ruled that Simbisa breached the law when it abdicated from its statutory obligation.
“In the circumstances, I find that defendant did not lawfully resign from its obligation to pay pension contributions for its employees,” she said.
Justice Charewa said Simbisa was liable for pension contributions in the amount claimed in the summons.
“In the premises, it is ordered that plaintiff’s claim is allowed,” she said. “The defendant shall pay to the plaintiff the amount of $346 972, 32 together with interest thereon at the prescribed rate from the date of the summons to date of payment in full and costs of suit.”
Justice Charewa in her judgment did not agree with Simbisa’s position that membership of the Catering Industry Pension Fund was a voluntary exercise.
She said employees were obliged to be members of an employment council upon employment in terms of the law.
Unless exempted on good cause, Justice Charewa said, employers had an obligation to collect and remit pensions on behalf of their employees in accordance with the law.
In its submission, the NEC argued that Simbisa was obliged to adhere to the terms of the Collective Bargaining Agreement for the industry by remitting to the employment council pension contributions for the fast foods company’s workers.
The NEC said Simbisa failed to act properly, despite this being a mandatory requirement agreed in a Statutory Instrument made in terms of Section 74(3) of the Labour Act and should be compelled to do so.
Simbisa argued that the CBA for the catering industry sought to bind it to make contributions to a third party – the pension fund – a move ultra vires Section 74(3) the Labour Act.
The company also attacked the decision of the catering industry board for refusing to accept its resignation or grant it exemption, saying it violated its constitutional right to freedom of assembly and association.
Simbisa Brands, which has spread its wings to other African states, has its roots in Zimbabwe.
The company was established on August 5 2015 as a fully owned subsidiary of Innscor Africa.
Innscor had directly operated its fast food business brands which had been established with the opening of the first Chicken Inn outlet in 1987.
All the former Innscor fast food brands are now owned and operated directly by Simbisa Brands.
Online Reporter