Zimra wins case against 300pc salary hike, bonus

Source: Zimra wins case against 300pc salary hike, bonus – herald

Fidelis Munyoro-Chief Court Reporter

THE Zimbabwe Revenue Authority (Zimra) has successfully challenged an arbitral award granting a 300 percent salary increase and a mandatory 13th cheque to its employees.

The High Court, presided over by Justice Christopher Dube-Banda, ruled that the award was contrary to the public policy of Zimbabwe and could not be lawfully implemented.

The ruling reinforces the limitations on public entities in collective bargaining and underscores the requirement for compliance with budgetary and legislative frameworks.

The case stemmed from salary negotiations between Zimra and the Zimbabwe Revenue and Allied Workers’ Union for the period July 2023 to December 2023, which had reached a deadlock and were referred to arbitration.

The tribunal, made up of arbitrators Arthur Marara and George Makings, issued an award granting the contested salary adjustments.

Zimra, through its legal representative, Mr Simplicio Bhebhe of Kantor and Immerman Legal Practitioners, argued that the award exceeded its approved budget for the 2023 financial year and contravened provisions of the Revenue Authority Act, Public Finance Management Act, and other related statutes.

It was submitted that Zimra’s expenditure was subject to budgetary limits and that the award would increase its expenditure by 2.7 percent above the approved allocation.

“The 2023 budget cycle had closed, and any expenditure outside the approved budget required a supplementary budget, which was no longer possible,” Mr Bhebhe told the court.

He added that the tribunal’s decision ignored legislative constraints on Zimra as a public entity and created an illegality by imposing obligations outside its statutory framework.

The union, represented by Advocate Benjamin Magogo, instructed by Mafongoya and Matapure Law Practice, contended that the award was justified in light of economic challenges, including inflation and currency volatility.

The union argued that the right to collective bargaining, enshrined in Section 65(5)(a) of the Constitution, allowed employees to negotiate for fair wages that mitigate the rising cost of living.

It was further submitted that Zimra employees already faced financial pressures despite receiving allowances such as transport, housing, and medical aid.

Justice Dube-Banda dismissed these arguments, stating that Zimra is bound by legal and budgetary constraints.

“Zimra is a public entity and cannot expend outside the approved budget. The award requires Zimra to pay more than its legislatively approved budget, which is contrary to public policy,” the judge said.

He added that the tribunal had overstepped its mandate by issuing an award that exceeded Zimra’s budgetary limits.

The union also argued that Zimra had effectively conceded to the payment of a 13th cheque during arbitration proceedings.

This claim was rejected, with the court noting that Zimra had consistently maintained that any additional payments must align with its performance-based incentive policy.

“The tribunal awarded a non-discretionary 13th cheque, which Zimra did not concede to. Therefore, the argument that Zimra is stopped from seeking to set aside the award has no merit,” the judge ruled.

Justice Dube-Banda also highlighted the broader implications of the award on public finances.

He noted that the Government’s fiscal policy requires employment costs to remain within 50 percent of annual revenues.

“The substantive effect of the award is that it has the potential to breach the Government’s fiscal rule. In such a case, the conception of justice in Zimbabwe would be intolerably hurt by this substantive effect of the award,” the judge said.

The court further criticised the arbitral award for lacking justification.

Justice Dube-Banda noted that Zimra employees already received comprehensive remuneration packages, including various allowances in both local currency and US dollars.

“The award is arbitrary and not justified, particularly considering that Zimra employees are already at the top of the civil service remuneration structure,” he said.

The court set aside the contested portions of the arbitral award and ordered the union to pay the costs of the suit.