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Matthias Ruziwa : HR Issues

“It seems reasonably self-evident that the relevant provisions of the Labour Act draw a clear distinction between casual or seasonal workers and employees on fixed term contracts.”In the matter between SIMBI (STEELMAKERS) (PVT) Ltd v SHAMU and 43 Others, Judgement No SC 71 /2015, the Supreme Court drew a clear distinction between casual workers and employees on fixed term contracts and went further to explore the concept of casualisation of labour. In my view this judgement has brought significant clarity whether or not continued renewal of fixed term contracts constitute automatic permanent employment.

Shamu and 43 others were employed by Simbi — Steelmakers(Pvt) Limited on monthly contracts that were continuously renewed. In the longest instance, the employee’s contract had been renewed for six years.

In May 2010 SIMBI terminated all 44 contracts on notice, without giving any reason other than that the contracts had expired.

The employees refused the terminations and the dispute was referred to arbitration, the employees claiming that they had, by virtue of the proviso to section 12(3) of the Labour Act (Chapter 28:01 of the Statute Law), become permanent employees. Section 12(3) reads as follows —

‘‘A contract of employment that does not specify its duration or date of termination (other than a contract for casual work or seasonal work or for the performance of some specific service) shall be deemed to be a contract without limit of time:

Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months’’.

The Honourable Arbitrator upheld their claim and ordered re-instatement or payment of damages in lieu of re-instatement.

SIMBI appealed against the arbitral award to the Labour Court and the Court dismissed the appeal. The Court referred to various International Labour Standards designed to protect fixed-term employees from ‘‘casualisation of employment’’ and also from the termination of their employment without valid reason.

The Labour Court found that the relevant provisions of the Labour Act conform with these standards in order to protect workers from short-term contracts generally. In particular, where a short-term contract is repeated for more than six weeks in any period of four consecutive months, it becomes a contract of permanent employment by virtue of section 12(3) of the Act.

The Labour Court decided that the practice of repeated short-term contracts constitutes ‘‘casualisation’’ of labour prohibited by the Act as read with the governing international standards.

It held that this was buttressed by section 46(1) of the 2013 Constitution of Zimbabwe (Act No. 1 of 2013) which enjoins the courts to take international law into account, and also by section 65(4) of the Constitution, which requires the implementation of equitable and satisfactory conditions of work.

The company through its legal representative Mr J Masango of Murambasvina, Tizirai-Chapeanya Legal Practitioners, then appealed to the Supreme citing that the Labour Court a quo erred in the following respects:

interpreting the provisions of the Labour Act to mean that the respondents had become permanent employees

holding that the renewal of fixed term contracts in casu amounted to the casualisation of labour

misinterpreting and misapplying the relevant international labour standards

not holding that the respondents’ claims had prescribed, such claims having been made more than two years after the initial contracts had expired.

The employees` legal practitioner Mr O. Shava of Mbidzo, Muchadehama & Makoni, accepted that the Labour Act differentiated between fixed-term and casual employment and also contemplated the renewal of fixed-term contracts.

He submitted that this accorded with the literal interpretation of the relevant provisions of the Act. Mr Shava further submitted that the Labour Court correctly proceeded beyond this literal interpretation to consider the mischief that section 12(3) of the Act sought to remedy.

In this regard, the historical context showed that the legislature intended to protect employees against the abuse of fixed-term contracts where permanent employment was available.

The literal application of section 12(3) leads to the absurdity of rejecting the casualisation of labour and yet allowing the renewal of fixed-term contracts.

Amongst other things in the appeal, the Supreme Court clearly drew a distinction between casual workers and employees employed on fixed term contracts and held that “It seems reasonably self-evident that the relevant provisions of the Labour Act draw a clear distinction between casual or seasonal workers and employees on fixed term contracts.

The term “casual work” is defined in section 2 of the act to mean “work for which an employee is engaged by an employer for not more than a total of six weeks in any four consecutive months”, while “seasonal work” means “work that is, owing to the nature of the industry, performed only at certain times of the year”.

On the other hand, fixed term contracts are specifically distinguished in s 12(2)(b), which requires the employer to provide written particulars of “the period of time, if limited, for which the employee is engaged”, and in s 12B(3)(b), which relates to the consequences of “termination of an employment contract of fixed duration” in certain circumstances.

The distinction is pointedly captured and articulated in s 12(3) itself. This provision recognises three different and distinct categories of employment, i.e. a contract of fixed duration, a contract for casual, seasonal or piece work, and a periodic contract without limit of time.

In the first category, the duration or date of termination of the contract is clearly stipulated, whereas in the third category it is not expressly specified. Ordinarily, the same would apply to contracts for casual, seasonal or piece work, being contracts the duration of which cannot be specifically delimited due to the nature of the work that they involve.

However, once a contract for casual work exceeds the prescribed period of a total of six weeks in any four consecutive months, it is deemed to have become a contract of employment without limit of time.

The critical question for determination in casu is whether the categories of casual work and fixed term employment are mutually exclusive. In this regard, the distinguishing characteristics of the two categories are instructive.

First and foremost, a fixed term contract expires automatically upon the effluxion of its stipulated period, whereas the duration of a contract of casual work will depend upon the nature of the work involved and the circumstances under which it is to be carried out. It is this indeterminate nature of its duration that entails the deemed conversion of a casual contract into one of indefinite employment in terms of the proviso to s 12(3).

On a literal and grammatical interpretation of s 12(3), and without any attendant absurdity, the proviso clearly does not apply to an employee on a fixed term contract.

There are other equally significant distinguishing features as between the two categories of employment:

In terms of s 12(4) of the Act, the periods of notice required to terminate contracts of employment vary according to the duration of the given contract, being only one day in the case of casual or seasonal work.

Section 12(5) of the Act stipulates different periods of probation and different notice periods during probation in respect of casual or seasonal work as compared with all other contracts of employment.

Generally speaking, a casual worker is not entitled to the minimum conditions of employment laid down in the Labour Act or in subsidiary regulations or collective bargaining agreements — which is the reason why a casual worker usually receives remuneration at a rate that is higher than the minimum rate so as to compensate for the loss of other prescribed benefits.

The Consolidated Collective Bargaining Agreement: Engineering and Iron and Steel Industry 1990 (SI 282 /1990), which regulates the sector in casu, specifically differentiates the two forms of employment in s 3(1), by defining a casual worker as one “who is not engaged as a contract worker” and a contract worker as one “who is engaged for a specified period, task or project”.

In the final analysis, having regard to the relevant provisions of the Labour Act and its subsidiary legislation, the Supreme Court took the view that the Labour court a quo patently misdirected itself in concluding that the respondents were casual workers and that they subsequently graduated to the status of employees on indefinite or permanent contracts of employment.

Disclaimer: Opinions expressed herein are solely those of the author Matthias Ruziwa is an experienced and progressing Strategic Human Resource Practitioner based in the Midlands Province, City of Kwekwe. You can contact Matthias at the following email address: [email protected] Whatsapp 0773 470 368