Online Reporter
Yeukai Karengezeka-Chisepo
Court Correspondent
The Labour Court has ruled that companies placed under judicial management cannot rely on existing judicial management orders issued under the repealed Companies Act to block workers from instituting fresh labour proceedings without leave of the High Court.
The landmark ruling was made by Labour Court Judge Justice Clever Tsikwa in an appeal by Destiny Electronics (Pvt) Ltd against an arbitral award in favour of its former employee, Mr Dzidzai Magada Marozva.
The company had argued that the arbitrator lacked jurisdiction to hear the matter because it had been placed under judicial management by the High Court, whose order required leave of the court before legal proceedings could be instituted against it.
Destiny Electronics further argued that the arbitrator erred in law by proceeding with the matter despite the subsisting High Court order.
However, Justice Tsikwa dismissed the company’s arguments, ruling that the judicial management order did not prevent the institution of new proceedings but only stayed proceedings that were already in existence when the order was granted.
“The orders granted by the High Court did not have the effect of stopping proceedings that had not yet commenced,” Justice Tsikwa ruled.
The judge noted that under the repealed Companies Act, the court had discretion to stay existing proceedings against a company under judicial management, but the legislation did not prohibit fresh legal proceedings from being instituted.
Justice Tsikwa further observed that while the Insolvency Act, which introduced corporate rescue proceedings, now bars the commencement of legal proceedings against a company under corporate rescue without the consent of the practitioner or leave of the court, those provisions do not apply retrospectively to judicial management orders granted under the old Companies Act.
The court also dismissed a preliminary objection raised by the respondent, who had argued that the appeal was defective because Destiny Electronics had failed to file a complete record of proceedings.
Justice Tsikwa held that Rule 19 of the Labour Court Rules only requires an appellant to file documents relevant to the appeal that are in its possession and does not make it mandatory to submit the complete record of proceedings.
The judge added that respondents are entitled to file any additional documents they consider relevant, making the failure to file the complete record legally inconsequential.
The court also ruled that although the Companies Act has since been repealed, judicial management orders granted under it remain valid until they are lawfully set aside.
Justice Tsikwa dismissed the first two grounds of appeal, with costs to be in the cause, and ordered that the matter be set down for argument on the remaining three grounds of appeal.
