First Capital retrenchees lose appeal

Source: The Herald – Breaking news.

Fidelis Munyoro, Chief Court Reporter

THE Supreme Court of Zimbabwe has dismissed an appeal brought by Ronald Kandemiri and 56 others against First Capital Bank Limited, marking the conclusion of a legal battle over retrenchment that began in 2019.

The appellants had sought to overturn a Labour Court judgment that upheld their retrenchment by the bank, arguing that the process was unfair and contrary to provisions of the Labour Act.

The Supreme Court, however, found that the retrenchment had been carried out following the law, affirming the Labour Court’s decision.

The dispute stemmed from a restructuring exercise announced by First Capital Bank at a Works Council meeting on August 5, 2019.

Days later, on August 9, the bank provided a list of employees to be retrenched, including the appellants, and issued notices of its intention to retrench under section 12C of the Labour Act.

The retrenchment took effect on August 31 2019.

Negotiations on retrenchment packages followed but failed to reach an agreement, leaving the appellants with only the minimum retrenchment package.

Feeling aggrieved, they challenged the process before the National Employment Council for the Banking Undertaking, arguing that the retrenchment was procedurally unfair and amounted to unfair dismissal.

The designated agent at the Employment Council ruled in favour of the appellants, finding that First Capital Bank had failed to consult the Works Council as required by section 25A of the Labour Act.

The agent set aside the retrenchment and ordered reinstatement or payment of damages in lieu of reinstatement.

The bank, however, successfully appealed to the Labour Court, which overturned the agent’s decision.

The Labour Court ruled that consultation with the Works Council was not mandatory when retrenching five or more employees under section 12C of the Act, as modified by the provisions of section 25A.

Dissatisfied, the appellants represented by Mr Munyaradzi Gwisai, escalated the matter to the Supreme Court.

At the Supreme Court, the appellants argued that the Labour Court had misinterpreted the law. They contended that consultation with the Works Council was a mandatory step under the Labour Act, even in cases involving the retrenchment of five or more employees.

First Capital Bank, represented by counsel Mr Simplicio Bhebhe, defended its actions, arguing that the retrenchment was conducted in full compliance with sections 12C and 12D of the Act.

The bank maintained that it was only required to notify, not consult, the Works Council when retrenching five or more employees.

It further argued that the appellants had been aware of the company’s financial challenges and the possibility of retrenchment since 2017.

Justice Felistus Chatukuta dismissed the appeal.

The court found that section 25A (5) of the Labour Act, as modified by its proviso, exempt retrenchments involving five or more employees from the consultation requirements.

“The provisions are precise and unambiguous,” said Justice Chatukuta.

“It is not necessary to rely on any tool of interpretation other than the literal interpretation.”

The court also rejected the appellants’ argument that the notification requirement should be read as implying a duty to consult.

Justice Chatukuta emphasised that the legislature had intentionally retained the notification-only requirement in subsequent amendments to the Labour Act, signaling its clear intent.

“A court cannot usurp the legislative function by rewriting an otherwise clear provision,” the judge noted.

The dismissal of the appeal closes the legal chapter for the appellants, as the court ruled that First Capital Bank had acted within the confines of the law, and the retrenchment process was valid.