Flexmail loses to currency case

Fidelis Munyoro Chief Court Reporter
Former employees of Flexmail Private Limited breathed a sigh of relief last week after the Labour Court ordered the company to pay them a combined $340 000 in damages for illegal dismissal seven years ago. The firm had refused to compensate the 31 workers using United States dollars, arguing that at the time they were fired the country was using the local currency.

In a judgment delivered last Friday, a panel of five judges unanimously agreed to have the workers compensated in the US-dollar component.
Justice Gladys Mhuri, who prepared the judgment, said in arriving at the appropriate decision, the court considered three formulas proposed by the workers’ lawyer Munyaradzi Gwisai.

The first formula (the breach-date rule) would result in one worker getting $733 391,33 and the second formula proposed payments using the date of first use of foreign currency, which according to the proposition was April 1 2009.

The salaries were pegged at $159 per month multiplied by five years, making the total bill payable to all affected workers under this formula at $340 000.
The third formula would have resulted in the workers being awarded a combined $994 953,78.

This, Justice Mhuri said, would be unrealistic and harsh on the employer and would over compensate the fired workers.
In the final analysis of the formulas, the court settled for the second formula and awarded the workers a total of $340 000.

“In coming up with the appropriate formula, the court has weighed the interests of both parties — that the wronged party must get adequate compensation, but one which is not unduly harsh on the other party (the wrong doer),” said Justice Mhuri.

In her ruling, Justice Mhuri noted that the five-year damages were awarded during the Zimbabwean dollar era in 2008 and this was at the height of hyper inflation.

“During this time, five years damages would have adequately compensated applicants without being duly harsh on the respondent (Flexmail),” she said.
The quantification follows a Supreme Court ruling a few months ago, which referred the matter back to the Labour Court for determination.

Flexmail (Private) Ltd lost its case against the workers in the Labour Court seven years ago and was ordered to reinstate or compensate the fired workers.
The company offered to pay damages equivalent to five years’ salary in Zimbabwean currency.

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