How to get a binding settlement

Zimbabwe runs various schools in the country and owns Waddilove Institu­tion in Marondera. MCZ had a dispute with 11 of its workers who worked at Waddilove school farm. The dispute arose between the parties concerning the workers’ grades and salaries.
MCZ believed the 11 workers — for pay purposes — fell under the National Employment Council for the Agri­culture Sector. The workers, on the other hand, believed that they fell under the NEC for Wel­fare and Education Sector, and they referred the mat­ter for conciliation before a Labour Officer.
A certificate of settlement was issued whereby the par­ties agreed that the workers fell under the NEC for Wel­fare and Education Sector.
MCZ agreed to pay the workers US$50 per month plus one month shortfall according to their grades. However, MCZ failed to honour the agreement. The Labour Officer referred the matter for arbitra­tion. The Arbitrator ruled in favour of the workers and ordered that they fell under the NEC for the Welfare and Education Sector.
The Arbitrator also ordered MCZ to pay the work­ers back pay amounting to US$16 782. MCZ was ordered to place the workers into their proper grades and to pay them according to the nature of their duties.
Aggrieved by the Arbitrator’s award, MCZ appealed to the Labour Court. It argued that the Arbitrator erred in holding that the workers fell under the NEC for the Welfare and Education Sector. This was because the farm under which they were employed was a separate entity from the school and operated independently.
MCZ argued that the workers had always been paid under the NEC for the Agriculture Sector. It submit­ted that the Arbitrator erred in holding that the activ­ities on the farm were complementary to activities at the school.
This was allegedly so without giving the basis for such a finding and hence classified the employees under the NEC for the Welfare and Education Sector. MCZ prayed for the setting aside of the arbitral award.
Firstly, let us deal with the issue of the referral for arbi­tration.
It is common cause that the parties appeared before a Labour Officer for conciliation.
The Labour Officer issued a certificate of settle­ment on May 12, 2009 where both parties agreed that the work­ers fell under the NEC for the Welfare and Educa­tion Sector.
MCZ undertook to pay the workers’ backpay and to place them into their proper grades. The matter was only referred for arbitration when MCZ failed to imple­ment the settlement agreement.
The question that falls for determination is what hap­pens when a party fails to honour the settlement agree­ment? Does it mean the settlement falls away and the issues before the Labour Officer are referred for arbitra­tion? Or, is there a way of enforcing the settle­ment?
Section 93 of the Labour Act (Chapter 28:01) deals with the power of the Labour Officer. Specifically, Sec­tion 93 (1) and (2) provide the following:
“(1) A Labour Officer to whom a dispute or unfair labour practice has been referred, or to whose atten­tion it has come, shall attempt to settle it through concilia­tion or, if agreed by the parties, by reference to arbitra­tion.
“(2) If the dispute or unfair labour practice is settled by conciliation, the Labour Officer shall record the settle­ment in writing.”
Sub-Sections (3), (4) and (5) deal with referral to arbi­tration. Referral can only be done upon issuance of a certificate of no settlement. It can only be issued where parties fail to agree on the substantive issues.
What is the effect of failing to implement a concilia­tion agreement? From a reading of the Act, it seems the con­ciliation agreement becomes the new contract between the parties.
It remains an agreement as between the parties. There is therefore nothing wrong in the matter having been referred for arbitration when it became clear that the parties had failed to do that which they so agreed.
The matter was properly referred for arbitration. MCZ submitted that the Arbitrator erred in holding that the workers fell under the NEC for the Welfare and Educa­tion Sector. This ground has no merit.
When the matter was referred for arbitration there was a certificate of settlement where MCZ had agreed that for pay purposes, the workers fell under the NEC for the Welfare and Education Sector.
MCZ had undertaken to pay backpays for the work­ers. That agreement constituted a contract between the two parties.
The Arbitrator fell into error when he failed to give due consideration to the certificate of settlement. The par­ties are bound by the certificate of settlement and should comply with its terms and conditions.
MCZ cannot be allowed to simply ignore agree­ments it enters into.
Once the courts allow MCZ to get away with the consequences of signing a certificate of settle­ment, it would lead to most people and companies ignoring cer­tificates of settlement.
Labour Court president Ms Loice Matanda-Moyo therefore agreed with the findings by the Arbitrator. MCZ was bound by the certificate of settlement and should settle the backpays.
Accordingly, Ms Matanda-Moyo dismissed the Methodist Church in Zimbabwe appeal with costs for lack of merit.