Davies Ndumiso Sibanda, Labour Matters

Many companies and organisations that are facing financial challenges have been forced to alter conditions of service for their workers resulting in conflict.

Most managerial employees are an unhappy lot where they work because their conditions of service have been unilaterally altered by employers as they contain costs. Things like fuel allowances, access to company cars, mileage rights, children’s fees, travel and subsistence allowances, personal education grants and loans and many others are now a source of litigation.

The majority have not litigated for fear of victimisation and losing their jobs. Their frustration is, however, impacting negatively on productivity and many of them are now looking for alternative employment which means they are not concentrating on their work. 

Employers have in some instances “terrorised” managerial employees to sign documents purporting to be agreements for reducing salaries. Such agreements have legal challenges in that they can be challenged in court when the court scrutinises the circumstances under, which the agreement was entered into.

Forced agreements on employees can be challenged later when employees argue they had no choice but to sign the agreement and they may succeed where they can provide evidence that there was no negotiation whatsoever but instead the employer was taking advantage of the imbalance of power between the employer and the employee. While making such arguments may be complex, there is a lot of case law related to that.

Non-managerial employees have, however, been generally safer from alteration of their conditions of service as they are protected by collective bargaining agreements and where such rights are not protected by such agreements, unions have made noise and in worst cases taken legal action successfully against employers.

The legal position is that clearly defined contractual rights cannot unilaterally be altered by a party in a contract. This was stated in the case of AGRICULTURAL BANK OF ZIM. LTD t/a AGRIBANK V MACHINGAIFA & ANOR – SC 61/07. Brief facts of the case are that the respondents had their motor vehicle scheme benefits unilaterally altered by the employer. The details of most changes are not important. What is important is that the employer unilaterally removed mileage allowance provision which became the basis of the dispute.

The Supreme Court held that the unilateral removal of the mileage allowance provision was unlawful. The Judge said, I do not accept that on the basis of para 11 of the contract of employment, the appellant was empowered to remove, without reference to the respondents, such a fundamental right as the entitlement to payment of a monthly mileage allowance. If the appellant’s argument were to be taken to its logical conclusion, on the basis of that paragraph, even the respondents’ salaries could have been reduced. 

I do not accept that the bank in amending its policies and procedures was empowered to alter clearly defined contractual rights to payment of a salary and allowances. Clause 3 of the contract of employment clearly states that the respondents were:

“… entitled to a mileage allowance based on a mileage of 4 000 kilometres per month at the applicable standard AAZ rates.”

Such an entitlement could not be changed, altered or amended at whim on the basis that the appellant was entitled to change its policies and procedures from time to time. A party to a contract cannot unilaterally alter the terms and conditions of the contract in these circumstances.”

In conclusion, the legal position is that there must be consultation, negotiation and agreement to vary contractual conditions of service, however, these should not be confused with policy decisions where the employer may alter the policy on giving employees reasonable notice.

– Davies Ndumiso Sibanda can be contacted on: email: [email protected].