Makeni Gardens Ltd v Honenberger (Appeal 124 of 2000) [2002] ZMSC 136 (2 May 2002)

IN THE SUPREME COURT FOR ZAMBIA APPEAL 124/2000 HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: MAKENI GARDENS LIMITED APPELLANT AND BERNARD HONENBERGER RESPONDENT CORAM: NGULUBE, CJ., LEWANIKA, ADCJ. On 13th September, 2001 and on May 2, 2002 For the Appellant: For the Respondent: Mrs N. SHARPE-PHIRI of Sharpe and Howard K. M. SIMBAO of Mulungushi Chambers JUDGMENT LEWANIKA, ADCJ, delivered the judgment of the court. Our brother the Hon. Mr. Justice CHAILA who sat with us when we heard this appeal having passed away, this judgment is to be regarded as by the majority. This is an appeal against the decision of a Judge of the High Court granting the Respondent various sums of money due to him under the terms - J2 - of a contract of employment entered into by the Appellant and the Respondent. The evidence on record is that the Appellant employed the Respondent as its General Manager to run a restaurant cum night club known as the Cosmopolitan by a contract dated 9th October, 1996. The employment commenced on 15th October, 1996. The contract provided for payment of a salary of 9,000.00 South African Rands per month to be paid in pounds sterling or US Dollars at the Respondent's option. The contract also provided for 35 days annual leave which could be commuted for cash at the Appellant's discretion. The contract could be terminated by either party giving 90 consecutive days' written notice or 30 days during the first six months of the contract. By a letter dated 31st May, 1997 the Respondent gave notice of his resignation from employment, the notice was to run 1st June, 1997 to 31st August, 1997. It is common cause that the Respondent's salary was not paid timeously and that he was owed arrears of salary at the time that he resigned. By letter dated 23rd January, 1997 the Appellant wrote to the Respondent attempting to change the Respondent's conditions of employment but there was no evidence on record that the Respondent accepted the proposals contained therein. The learned trial Judge found that - J2 - of a contract of employment entered into by the Appellant and the Respondent. The evidence on record is that the Appellant employed the Respondent as its General Manager to run a restaurant cum night club known as the Cosmopolitan by a contract dated 9th October, 1996. The employment commenced on 15th October, 1996. The contract provided for payment of a salary of 9,000.00 South African Rands per month to be paid in pounds sterling or US Dollars at the Respondent's option. The contract also provided for 35 days annual leave which could be commuted for cash at the Appellant's discretion. The contract could be terminated by either party giving 90 consecutive days' written notice or 30 days during the first six months of the contract. By a letter dated 31st May, 1997 the Respondent gave notice of his resignation from employment, the notice was to run 1st June, 1997 to 31st August, 1997. It is common cause that the Respondent's salary was not paid timeously and that he was owed arrears of salary at the time that he resigned. By letter dated 23rd January, 1997 the Appellant wrote to the Respondent attempting to change the Respondent’s conditions of employment but there was no evidence on record that the Respondent accepted the proposals contained therein. The learned trial Judge found that - J3 - the Respondent was entitled to the benefits contained in the contract dated 9th October, 1996, hence the appeal. Counsel for the Appellant has filed two grounds of appeal, the first one being that the learned trial Judge misdirected himself when he held that the contract of employment between the parties fell under the provisions of the Employment Act, Cap 268 of the Laws of Zambia. In arguing this ground, counsel said that the Employment Act does not apply in this case as the respondent was part of the team that held discussions to work out a survival plan for the Appellant Company and further that the Respondent is estopped from claiming his benefits under the contract as he continued to work for the Appellant even after his salary was reduced. In reply, counsel for the Respondent argued that the learned trial Judge did not misdirect himself when he held that the contract of employment between the Appellant and the Respondent fell under the provisions of the Employment Act. In support of her argument, she referred us to the preamble to the Act which she said showed the intention of Parliament in passing this Act which states as follows:- "An Act to provide legislation relating to the employment of persons; to make provisions for the engagement of persons on contracts of service and to provide for the form of enforcement of contracts of service." - J4 ~ She has referred us to Section 3 of the Act which defines an "employee" and said that the Act applies to all employees in Zambia except for apprentices, casual employees or employees in Government service or the defence forces and that the Respondent did not fit in any of the exceptions. She also referred us to Section 38(2) of the Employment Act which provides as follows:- 38(2) "When a contract made within another country relates to employment in Zambia, the provisions of this Act shall apply to such contract." She said that the onus was on the Appellant to show why the Employment Act would not apply to the contract of employment between the Appellant and the Respondent. We have considered the arguments advanced by counsel on both sides and the evidence on record. It is common cause that the Appellant and the Respondent entered into a written contract dated 9th October, 1996 which contained provisions regarding the Respondent's remuneration. There is evidence on record that sometime in January, 1997 discussions were held with a view to vary the conditions of employment for expatriate employees of the Appellant, including the Respondent, which were followed by the letter dated 23 January, 1997 which purported to nullify the contract that the - J5 - parties had entered into. There was no evidence on record that the Respondent had consented to a variation or nullification of his contract of employment. Counsel for the Appellant has contended that the Respondent is estopped from claiming his remuneration under the contract because he continued to work for the Appellant even after his salary was reduced. With respect to counsel, the evidence on record is that the Respondent was not being paid any salary apart from a few drawings and this is most probably what led to his resignation from the employment of the Appellant. Although much relevance was placed on the provisions of the Employment Act by the learned trial Judge there was no need to do so as it is trite law that a contract of employment cannot be varied unilateraly and the appeal cannot succeed on this ground. The second ground of appeal filed by counsel for the Appellant is that the learned trial Judge misdirected himself in not considering the drawings by the Respondent against his salary during the course of employment. In arguing this ground, counsel drew our attention to the computations contained on page 86 and the petty cash voucher on page 106 of the record - J6 - of appeal. We drew counsel’s attention to the following passage on page 5 line 10 of the judgment:- "Having said that I am satisfied that the Plaintiff is entitled to his salary and terminal benefits due and owing to him from October, 1996 up to date minus any sums of money the Plaintiff owes the Defendant This in our view, means that the monies awarded to the Respondent are net of any drawings that he made towards his salary. There is no merit in this ground of appeal as well. There is also an appeal against the rate of interest awarded to the Respondent. The learned trial Judge awarded the Respondent interest at the current bank lending rate. We would alter this and make an order of interest at the average short term bank deposit rate from the date of issue of the writ to judgment, thereafter at the current bank lending rate as determined by the Bank of Zambia. As the appeal in the main has not succeeded, we order that the costs shall be borne by the Appellant to be taxed in default of agreement. M. M. W. S. NGULUBE CHIEF JUSTICE D. M. LEWANIKA DEPUTY CHIEF JUSTICE FOR YOUR SIGNATURES NGULUBE CJ LEWANIKA DCJ