Employee gets Z$20k terminal benefits after conversion at 1:1 exchange rate

Danford Chamwaruka a former employee for JL Robinson Agencies t/a Amalgated Motor Corporation has been awarded money worth a loaf of bread after his US$28 530 benefits were converted to ZW$28 530 by the courts relying on the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act.

The Statutory Instrument effectively recognised RTGS payment as legal tender and directed adaptation of the US dollar-denominated assets and liabilities at the fixed rate of one-to-one.

Chamwaruka was fired for misconduct in November 2010.

He was aggrieved by the decision and challenged it on appeal.

The arbitrator ruled in his favour but despite having the arbitral award in his favour, Chamwaruka further appealed to the Labour Court where an order in his favour was granted in default of appearance by his employer.

The then Labour Court judge Erica Ndewere ordered Amalgamated Motor Corporation to pay Chamwaruka the sum of US$ 28,530.00 as damages in lieu of reinstatement.

The order by Ndewere J was granted in default on 18 January 2013.

The Labour Court order was registered as an order of the High Court by Justice Musakwa on 20 January 2014.

Chamwaruka then sought to execute the High Court order prompting his former employer to approach the High Court for astay of execution of the order.

A stay of execution was granted by Justice Esther Muremba.

The dispute revolved around the interpretation of S.I. 33 of 2019.”

The company argued that the currency regime was modified by S.I. 33 of 2019, and it could legally discharge its obligation in local currency.

It also submitted that the amount stated in the court order as US$ 28,530.00 was converted to RTGS $ 28,530.00 by operation of the law.

The applicant argued that the wording of the law put an end to the debate.

It said it was no longer required to discharge its obligations in United States Dollars but in RTGS at the rate of 1.1.

“The debt fell squarely within the ambit of liabilities that were converted from the United States Dollars to RTGS at the rate of 1.1,” it submitted.

Chamwaruka argued that the application was academic.

He further argued that the order in HC 1225/13 which registered the Labour Court award had since superannuated and as such, the applicant could not obtain declaratory relief in respect of an order that had superannuated.

Chamwaruka also argued that the obligation to pay did not arise with the registration of the Labour Court order into an order of the High Court in 2014.

He said the obligation to pay arose on 15 July 2022 and therefore the applicant’s liability did not fall within the ambit of S.I. 33 of 2019.

High Court judge, Siyabona Musithu ruled in favour of the company saying the central issue for determination is when exactly the obligation to pay the judgment debt in HC 1225/13 arose.

“The applicant contends that the obligation arose when the order by Ndewere J was granted in 2013, while the respondent alleges that the obligation only arose after the Supreme Court order of 15 July 2022.

“The enquiry entails an evaluation of the effect of the changes to the monetary regime brought about by S.I. 33 of 2019 to the case at hand.”

The judge said S.I. 33 of 2019 was gazetted on 22 February 2019. That date became the first effective date as defined in the Finance Act (No.2) Act, No.7 of 2019 (the Finance Act).

“The new currency that the law introduced ran parallel with other currencies that were accepted as legal tender, under what was known then as the multi-currency basket.

“The value of the liability was established the moment the Labour Court granted the order that was registered as an order of this court,” she said.

Muremba also said the fact that the discharge of that liability may have been stayed by an order of the High Court as well as the appeal to the Supreme Court did not alter its character.

“It remained a judgment debt which was denominated in United States dollars before the first effective date of the law.

“What was delayed was the execution of the order of the court to satisfy an already existing obligation.

“It is for the foregoing reasons that the court determines that there is merit in the application,” she said.

“It is declared that the order of this Honourable Court under HC 1255/13 registering the order of the Labour Court dated 30 January 2013 sounding in money (US$ 28,530.00) was converted to RTGS $28,530.00 by the operation of the provisions of S.I. 33 of 2019 at the rate of 1:1.

“It is further declared that the applicant is liable to pay the respondent the sum of RTGS $28,530.00 by the provisions of para 2 of this order,” she ruled.