HomeBusiness DigestLabour standoff: CFI to fork out US$177 000

Labour standoff: CFI to fork out US$177 000

FIDELITY MHLANGA

DIVERSIFIED agro concern, CFI holdings will have to pay US$177 408 in outstanding benefits and salaries to one of its former workers after losing its case at the Labour Court.

In 2012 the Supreme Court annulled the suspension from employment of CFI employee Andrew Mashaya after he was suspended in April 2003. Instead of reinstating him, CFI retired Mashaya before paying him salaries and benefits for the period 2009 to the time he was retired. At that time there was no issue about benefits and salaries as they were paid in United States dollars at a time the country had dollarised.

The problem arose, however, with salaries and benefits for the period April 1, 2003 to December 2008, which was denominated in the Zimbabwe dollar.

According to the Labour Court judgement under case number LC/H/APP/554/14, stamped September 25, 2020 between CFI and Mashaya, the agro concern was ordered to pay Mashaya, who was represented by Gama and Partners, the sum of US$177 408.

But Mashaya had approached the court seeking US$1 million. The breakdown of the award he claimed was US$241 009,20 for salaries arrears for the period April 1, 2003 to December 31, 2003; and cash-in-lieu of leave of US$21 936,28 for the same period. He demanded bonuses for the same period of US$ 25 545,92. For failure to sell the company vehicles between 2000 and 2011, Mashaya demanded CFI to compensate him to the tune of US$26 131,75. He also sought to be a paid car benefit allowance sum of US$19,584,59.

Mashaya wanted the company to pay fees of US$147 509 for his first two children and US$73 754 for the other two children. Further to that, he also demanded a long-service award of
US$25 545, a medical aid benefit US$7 004,40 and fuel allowances of US$15 767 .

In coming with Mashaya’s compensation, the court factored in arguments by actuarial experts Martin Tarusenga and David Mureriwa.

Tarusenga presented the earnings progression model, where he got into the history of the salary progression for Mashaya in Zimbabwe dollar terms from 1980 to December 2008. In that model, he was able to demonstrate how Mashaya’s salary progressed from US$715,28 in 1980 to US$2 700 in 2008. Tarusenga underscored and explained the fact that he arrived at the US dollar figures using the parallel market exchange rate, taking into account that using the official rate would have resulted in the paying out of ridiculous amounts.

On the other hand Mureriwa conceded that using the official exchange rate would have been unrealistic. He, however, reasoned that the parallel rate used by Tarusenga also yielded exorbitant figures inconsistent with the salaries which CFI was paying to Mashaya when the economy dollarised in 2009. It was his considered view that the median for Mashaya be US$500, given the fact that his peers were earning in that region.

However, Mureriwa’s argument about what was being earned by his peers was thwarted by Tarusenga’s reasoning that such a model was not supported by the facts of the case.

After studying the models presented by the two experts, the court was satisfied that Tarusenga’s model was more in line with realities on the ground at the prevailing time.

The court was therefore persuaded that the quantification figures needed to be modelled around the calculations proffered by Tarusenga.

As much as the court appreciated the principle of earnings progression advanced by Tarusenga, it saw no basis for using the last projected salary of US$2700 for the entire period. The court considered that what is equitable is to find an average salary. This should simply be achieved by adding all the projected monthly salaries from April 2003 to December 2008, and dividing them by the total number of months. This yields an average monthly salary of US$2 644. This then became the basis of computing the applicant’s arrear salaries for that period.

As such, the arrears salaries was calculated using 69 months from April 2003 to December 2008 and the figure of US$2 644 to reach a total of US$170 016. Cash-in-lieu of leave was calculated using three-months periods to arrive at US$7 392.
In total Mashaya was given US$177 408.

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