Varying contracts of employment

fewer benefits, before they eventually cry foul.
This week I will examine two cases that deal with both of the above matters.
Eaglesvale School employed Ospitiota Chihande as an accountant. A labour dispute arose between the two parties that was settled out of court, except for one issue that related to Chihande’s fuel benefit.
The school’s position was that its board had a policy, which sought to regularise the fuel benefit.
Workers who stay at the campus were entitled to 60 litres a month, while those living off campus received 80 litres.
Chihande lived off campus and had negotiated with the previous board for 180 litres of fuel a month since she stayed in Norton. The school contended that the benefit had been paid in error, as she ought to have received 80 litres like her colleagues.
Chihande’s position was that she had negotiated for this benefit and it became her contractual entitlement, which ought not to have been reduced unilaterally.
Her contract of employment gave her the 180 litres as a contractual benefit, hence the benefit could not be unilaterally reduced. There was no evidence that the 180 litres were given in error.
The evidence that was there is that the parties negotiated and agreed on 180 litres on the basis that Chihande stayed in Norton. The school board policy to regularise came after she had already been enjoying this contractual benefit.
In trying to regularise it, they ought to have consulted with her. This benefit – being a contractual benefit – could not be reduced unilaterally.
In the case of Commercial Bank of Zimbabwe Nominees (Pvt) Ltd versus Lyton Shumba and 14 others (SC 105/2001), the Supreme Court stated the following.
“In a situation where parties are bound by a contract, in this case a contract of employment, one cannot transfer rights and obligations without the consent of the other party.
“And that any variation of an employee’s contract including the variation of the personae of the other party contracting cannot be done unilaterally.”
It is therefore a position of our law that a contract of employment cannot be varied by one of the parties without the consent of the other party.
In the result, the benefit could not be reduced without Chihande’s consent. As a result, Labour Court president Ms Lilian Hove accordingly found that Chihande be entitled to 180 litres per month and that her entitlements be calculated on that basis.
I will now turn to a case where a worker signed a contract before he cried foul over fewer benefits.
Daniel Mudenda was employed by Lion Match Limited in 1999. He was offered a new contract on March 30, 2009.
The first two paragraphs read: “Following changes in the employment market due to the dollarisation of the economy, Lion Match would like to follow the trends in the labour hence modifying your contract accordingly.
“This new contract replaces your current employment contract and takes effect from March 1, 2009.”
Prior to this new contract, Mudenda had been promoted to the position of purchasing manager on April 2, 2001. As benefits, Mudenda was awarded transport allowance and school fees allowance.
In June 2008 another allowance for cellphone was awarded. In July, he was awarded another allowance as retention allowance. However, the new contract did not take into account the allowances alluded to above.
The only allowances mentioned in the new contract were canteen services and medical aid. For these, Lion Match would pay 50 percent and Mudenda another 50 percent.
It is common cause that Mudenda was not consulted before this new contract was drafted. On April 7, 2009, Mudenda endorsed his name and signature on the new contract. His signature therefore bound him.
When he was later aggrieved by the new contract, Mudenda took the case for arbitration. The arbitrator found that Lion Match unilaterally varied Mudenda’s original contract. He ordered Lion Match to pay Mudenda transport allowance, school fees allowance, discrepancy pay, cellphone airtime allowance and newspaper claims.
Lion Match then appealed to the Labour Court against the arbitral award. It argued that the arbitrator contradicted himself and fell into error by finding that variation of the contract to denominate Mudenda’s salary in United States dollars was unlawful, in the same breadth ordering the company to pay him in foreign currency. It further argued that the arbitrator erred by failing to pay attention to the legal maxim caveat to Mudenda’s signature of the contract concluded variation of the terms of the contract.
Lion Match submitted that the arbitrator erred in law by relying on inadmissible evidence by way of newspaper reports in computing Mudenda’s salary.
It was the company’s contention the arbitrator misdirected himself in concluding that denomination of Mudenda’s salary in United States dollars was an unfair labour practice. Mudenda was a manager and he ought to have known the consequences of signing a document.
Hence, Mudenda’s submission that he signed on a-without-prejudice basis is not acceptable, as this is not indicated anywhere on the contract.
Neither did his argument that he signed under duress hold water. Mudenda was served with the new contract in March 2009 and only signed it on April 7, 2009. He had ample time to consider the contents and reject them before he endorsed his signature.
On April 6, 2009 Mudenda wrote a memo in which he raised certain issues, but none of them referred to economic hardship.
To that end, Mudenda voluntarily signed the contract and was therefore bound by it.
In the result, Labour Court senior president Ms Gladys Mhuri allowed the Lion Match appeal.
She then set aside the arbitral award compelling Lion Match to pay Mudenda allowances.