Judgment No. 23/18
Civil Appeal No. SC 145/15
[2]
The parties were agreed that if the staff reduction exercise constituted a retrenchment
in terms of the Labour Act then the costs of such a scheme would properly be written into the
taxable income of the year in which the retrenchment took place. They were also agreed that
the definition of “retrench” in section 2 of the Labour Act1 was broad enough to include the
exercise undertaken by the appellant. The question which fell to be decided was whether the
exercise constituted a retrenchment in terms of the Labour Act. I did not understand the
appellant to dispute the submission made on behalf of the respondent that the retrenchment
would take effect from the date of its approval by the Minister. 2
[3]
The background facts are largely common cause. The appellant, a Commercial Bank
operating in Zimbabwe, embarked on a staff reduction exercise during the year 2009. By
resolution of its Board of directors dated the 26 November 2009, the appellant undertook “a
voluntary retrenchment exercise to reduce its staff head count by up to two hundred and fiftytwo (252) staff members.” The rationale for the decision taken by the Board was the downturn
in economic activity which triggered a drastic fall in business volumes from average monthly
transactions of US$1.9m in 2008 to US$380 000.00 in 2009 in the face of static staffing levels
in excess to capacity. All interested staff were required to submit formal applications by
31 December 2009. The appellant reserved the right to approve or decline such applications.
[4]
Between 3 and 31 December 2009, a total of 74 applications were received by the
appellant. However, the confirmation certificates, wherein each applicant affirmed freely and
voluntary terminating employment, were all signed by the 74 during the period 7 to 14 January
2010. Each employee was given 3 months’ notice of termination of his employment from the
1
2
[Chapter 28:01]
Kadir & Sons (Pvt) Ltd v Panganai and Anor 1996 (1) ZLR 598(S) @604C
2