No. SC 62/04
Appeal No. 58/04
BANK OF ZIMBABWE LIMITED
COURT OF ZIMBABWE
ZIYAMBI JA & GWAUNZA JA
JUNE 22 & SEPTEMBER 10, 2004
V Mamvura, for the
Zhou, for the
This is an appeal against a judgment of the Labour Court (formerly
the Labour Relations Tribunal) which
ordered the appellant (the
Bank) to pay to the respondent (Mahachi) his salary and
benefits pending the determination
by that court of Mahachis
appeal against his dismissal by the Bank.
factual background is as follows.
respondent was employed by the Bank as an assistant director in the
Corporate Banking Division. At the relevant time there
critical shortage of foreign currency in Zimbabwe. In order to
ensure that all the foreign currency that accrued to the Bank
properly allocated, the Bank established an Allocations Committee
(the committee). Mr Mahachi occasionally sat on
the committee had no written rules regulating the allocation of
foreign currency, a practice developed and it was understood
persons requiring foreign currency for certain purposes would be
given priority in the allocation of foreign currency. For
those who required foreign currency for medical or educational
purposes and large companies, which were customers of the
given priority over all other applicants.
of the Banks customers, whose affairs at the Bank were handled by
Mahachi, was a company called National Power International
(the company), which had its head office in the United Kingdom,
and a subsidiary operating in Zimbabwe. The
company had a foreign
currency account in pound sterling at the Bank, as well as a current
account in local currency which had an
September 2001 Mahachi received instructions from the companys
head office in the United Kingdom to close the companys
foreign currency account. Part of the foreign currency was to be
converted into local currency which was to be transferred to the
current account in order to pay off the overdraft, and the balance of
the foreign currency was to be remitted to the companys
the United Kingdom.
Acting on these instructions,
Mahachi converted £9 080.65 into local currency using the
official exchange rate, paid off the
overdraft on the companys
current account, and remitted the balance of the companys foreign
currency, amounting to £518.94,
to the companys bank in the
done that, Mahachi then allocated the £9 080.65 to his own
company called Shamina Holdings (Private) Limited (Shamina
Holdings), without the involvement of the committee, and paid for
the foreign currency using his own money.
Mahachi used the foreign currency which he had allocated to Shamina
Holdings, and some of his own money, to import a
motor vehicle from
South Africa. The motor vehicle was subsequently registered in
the relevant time, Shamina Holdings was not a customer of the Bank,
and when the Bank discovered that foreign currency had been
to an unknown entity, investigations were instituted and it was later
discovered that the foreign currency had been allocated
Mahachi was questioned about the foreign currency allocation, he
disclosed for the first time that Shamina Holdings was his
and that he was its sole director. In addition, he stated that
Shamina Holdings had concluded an agreement with the company
owned the foreign currency, in terms of which Shamina Holdings had
acquired the foreign currency from the company without the
involvement of the Bank and the committee.
a result of Mahachis claims, the Bank contacted its customer in
the United Kingdom, and the claim by Mahachi that the
had sold its foreign currency to Shamina Holdings was denied.
the circumstances, the Bank charged Mahachi with two acts of
misconduct under s 5.4.4 of the Managerial Employees Code of
Conduct (the Code). Section 5.4.4 of the Code reads as
act, conduct or omission inconsistent with the fulfilment of the
express or implied conditions of any employees contract of
employment with the Bank.
the first count it was alleged that Mahachi had committed the act of
misconduct set out in s 5.4.4 of the Code, as read
article 4 of the Articles of Agreement, which Mahachi had signed
when he joined the Bank. Article 4, in relevant
part, reads as
employee agrees to serve the Bank honestly, faithfully and
diligently, and to comply with all the rules and regulations of the
Bank. He agrees at all times readily to obey all orders and
instructions and duly, honestly and faithfully to account for all
securities, vouchers, bills, cheques, title deeds and other
instruments which shall come into his hands as a servant of the Bank,
and he further agrees to conduct himself in such a way as shall not
injure the reputation of the Bank
the second count, it was alleged that Mahachi had committed the act
of misconduct set out in s 5.4.4 of the Code, as read
article 5 of the Articles of Agreement. That Article reads as
Employee agrees that he will not, without the written consent of the
Bank first obtained, at any time during the continuance of
employment under this Agreement, engage or be engaged or concerned
directly or indirectly in any other business or occupation
whether for profit or otherwise either as principal, agent, servant
or in any other capacity, but will devote the whole
of his time and
attention to the business of the Bank and will use his best
endeavours to promote and extend it.
due course, the matter came before the hearing authority of the Bank
and Mahachi was found guilty on both counts. The penalty
respect of each count was that of dismissal.
by that decision, Mahachi appealed to the Banks appeals board.
Thereafter, in October 2002, the appeals board confirmed
conviction on the first count but set aside the penalty of dismissal
and substituted a final written warning. However, with
the second count, the appeals board set aside the conviction as well
as the penalty imposed.
with that result, the Bank noted an appeal to the Labour Relations
Tribunal. In its notice of appeal, the Bank challenged
by the appeals board to substitute a final written warning for the
penalty of dismissal in respect of the first count.
In addition, it
challenged the setting aside of the conviction on the second count
and the penalty of dismissal imposed in respect
of that count.
There was no cross-appeal by Mahachi against the confirmation of his
conviction on the first count.
before the appeal by the Bank was heard by the Labour Court, Mahachi
filed an application in that court seeking an order
Bank to pay him his salary and benefits pending the determination of
the Banks appeal by that court. That application
was made in
terms of s 97(4) of the Labour Act [Chapter 28:01]
(the Act), which reads as follows:
the determination of an appeal the Labour Court may make such interim
determination in the matter as the justice of the
application was granted in February this year. Feeling aggrieved by
that decision, the Bank appealed to this Court on the
ground that the
Labour Courts decision is grossly unreasonable.
is clear from the provisions of s 97(4) of the Act that the
President of the Labour Court had a discretion to grant the
relief sought by Mahachi. In the circumstances, unless it is shown
that the learned President made an error in exercising
discretion, this Court would not interfere with her decision.
GUBBAY CJ said in Barros
and Anor v Chimphonda
1999 (1) ZLR 58 (S) at 62G-63A:
must appear that some error has been made in exercising the
discretion. If the primary court acts upon a wrong principle, if
allows extraneous or irrelevant matters to guide or affect it, if it
mistakes the facts, if it does not take into account some
consideration, then its determination should be reviewed and the
appellate court may exercise its own discretion in substitution,
provided always it has the materials for so doing.
also Robinson v
Minister of Lands and Anor
1994 (2) ZLR 171 (S) at 175 A-C.
the present matter, I am satisfied that the learned President erred
and seriously misdirected herself when she concluded that
prospects of success in opposing the Banks appeal to the Labour
Court were bright.
say so because in her judgment, and whilst dealing with the act of
misconduct charged in the first count, the learned President
have considered the applicants submissions
. I find that the
submissions have merit thereby making his prospects of success
defending the appeal bright. The applicant committed a one off act
of misconduct for which he was convicted. This
was an abuse of authority.
Abuse of authority is an offence on its own in terms of the
Respondents Code. Its penalty is a written warning.
this regard, I wish to make three points.
first point is that it was wrong to describe the act of misconduct
for which Mahachi was convicted in the first count as an
authority. I say so because Mahachi did not have any authority
whatsoever to allocate foreign currency to Shamina Holdings.
allocation of foreign currency was the special preserve of the
allocations committee, and Mahachi knew this. He, therefore,
dishonestly in breach of article 4 of the Articles of Agreement.
second point is that in the first count Mahachi was not charged with
abuse of authority, but with committing an act or conduct
inconsistent with the fulfilment of the express or implied conditions
of his contract of employment with the Bank, as read with article 4
of the Articles of Agreement. He was convicted by the hearing
authority and that conviction was subsequently confirmed by the
board. Thereafter, when the Bank noted an appeal against
the setting aside of the penalty of dismissal, Mahachi did not
against the confirmation of his conviction. This fact
was overlooked by the learned President in determining Mahachis
of success in contesting the Banks appeal to the Labour
the third point is that the learned President overlooked the fact
that the Bank had noted an appeal against the decision by
board to set aside the conviction on the second count and the penalty
of dismissal imposed in respect of that count.
She did not at all
deal with Mahachis prospects of success in contesting the Banks
appeal on that count.
the circumstances, this Court will exercise its own discretion in the
matter. However, in view of the fact that the Banks
still pending in the Labour Court, the views I shall express on the
prospects of success of that appeal are prima
facie views which are
not in any way intended to influence the Labour Court in the
determination of that appeal.
my view, and bearing in mind all the evidence in this matter, the
Bank has good prospects of success in respect of the appeal
in the Labour Court. It seems to me that with regard to the first
count, the appeals board correctly set out the aggravating
the matter as follows:
(a) The appellant (Mahachi)
was a very senior member of staff in whom the Bank had a lot of trust
and who had to be exemplary in the
way he conducted himself in the
eyes of his juniors and customers.
exposed the Bank to a serious reputational risk by falsely claiming
that he had been involved in a parallel deal with the customer.
Bank had to verify (the) appellants assertions with its customer
in Britain through Barclays plc. That exposed the Bank
to a serious
risk which the Bank has to guard very jealously in these days of
appellant hid his transaction behind a company. He did not want to
leave tracks that connected him. That showed the worst
banking, that of dishonesty. A banker is expected and is supposed
to be honest and faithful in whatever he does. The appellants
failure to live up to that standard made his offence very serious.
appellant abused his position in the Bank and the relationship that
he enjoyed with the customer. He used the relationship
appellant did what he did out of greed and not need. The appellant
bought a vehicle which is an item of luxury which clearly
he did not need forex for a pressing desperate purpose. Considering
his position in the Bank, the appellant obviously
had a car already
which he had purchased through the Banks assistance and could have
got another if he had properly approached
the Bank with a case for
replacement. Here, the appellant was very selfish.
the circumstances, the Labour Court should have dismissed Mahachis
application for interim relief.
that is not the end of the matter because advocate Zhou,
who appeared for the respondent, submitted that it had not been
necessary for the respondent to apply for interim relief because,
operation of law, the respondent was entitled to his salary and
benefits, notwithstanding the noting of the appeal by the Bank.
making that submission, counsel relied upon the provisions of s 97(3)
of the Act, and the decision of this Court in UTC
(Zimbabwe) (Pvt) Ltd v Chigwedere
2001 (1) ZLR 147 (S).
of the Act provides that an appeal against a determination made under
an employment code shall not have the effect
of suspending the
determination or decision appealed against; and in the UTC
this Court decided that the noting of an appeal against a
determination made in terms of a registered Code of Conduct did not
the effect of suspending the decision appealed against.
the circumstances, counsel submitted that as the appeals board set
aside the penalty of dismissal which had been imposed on Mahachi
meant that Mahachi remained an employee of the Bank and was entitled
to his salary and benefits, notwithstanding the noting
of an appeal
by the Bank against the decision of the appeals board.
the argument sounds persuasive, it overlooks the fact that there is a
specific provision in the Code which determines whether
or not the
decision appealed against becomes operative. It is s 3.1.f,
which reads as follows:
decision of the Appeals Board will be binding unless appealed against
within fourteen working days to the Labour Relations Tribunal.
this provision means is that where an appeal is noted against the
decision of the appeals board within the fourteen day period,
decision appealed against does not become operative. The provision
is part of the agreement between the Bank and its managerial
employees, and is binding on them.
the present case, the appeals board handed down its decision on
14 October 2002, and the Bank noted its appeal to the Labour
Relations Tribunal on 18 October 2002. As the appeal was noted
within the fourteen day period, the decision of the appeals
which set aside Mahachis dismissal, did not become operative.
therefore follows that Mahachi was not entitled to his salary and
the circumstances, the following order is made
appeal is allowed with costs.
2. The order of the court a quo
is set aside and the following is substituted
The application is dismissed
JA: I agree.
JA: I agree.
appellant's legal practitioners
respondent's legal practitioners