Damages for wrongful dismissal in a fixed term contract
WHERE an employee is wrongfully dismissed by the employer, the employee is entitled to reinstatement or damages in lieu of reinstatement, if reinstatement is untenable.
Where the employee was employed for a period without limit of time, the damages should compensate him or her for the period he or she would still be in the employ of the employer. For the premature termination, the damages for such compensation should be for a period the employee is reasonably expected to have found alternative employment.
In a case where the duration of employment was fixed, the damages will be the salary that would have been due to the employee for the period he or she would have been in employment, had the employment contract not been terminated by the employer prematurely.
The benefits will be paid only for the unexpired period of the employment contract, unless the employee had a legitimate expectation that he or she would have his or her contract renewed.
In the case of ZIMRA v Mudzimuwaona (Supreme Court 4 of 2018), an employee was employed for a fixed term and was dismissed.
The Labour Court quantified damages as if the employee was a permanent employee prior to his dismissal, yet it was clear from the contract of employment that he was on a fixed term contract.
In that case, the contract of employment signed by the parties, was for a duration of 36 months. This means that the relationship between the parties was expected to expire on the last day of the 36th month. Based on the principles of law that one is compensated for the loss he or she suffered as a result of the breach, the employee was entitled to be awarded the amount of wages or salary he would have earned if there was no premature termination of the contract.
Damages for unlawful termination in relation to an employee who was on a fixed term contract are calculated in relation to the unexpired period of that contract.
GUBBAY CJ in Gauntlet Security Services v Leonard 1997 (1) ZLR 583 (S) in which he said: “The employee is entitled to be awarded the amount of wages or salary he would have earned save for the premature termination of his contract by the employer. He may also be compensated for the loss of any benefit to which he was contractually entitled and of which he was deprived in consequence of the breach.”
The remarks by the learned judge show that in assessing damages for unlawful termination of an employment contract, the court has to place the employee in the position he would have been had it not been for the wrongful premature termination of the contract.
The object of damages is to place a party in the position he or she would have been if it was not for the premature termination of the contract. The general principle upon which damages are to be assessed is that so far as possible, the person injured must be placed in the same position as he would have been if the contract had not been terminated wrongfully.
This means that damages are awarded for loss of what was expected.
A distinction has to be drawn between reinstatement to a contract without limit of time and one that is of fixed duration.
Accordingly, an employee will be entitled to his proven actual damages, which is the loss of income for the unexpired period. Damages in lieu of reinstatement, are in fact, a substitute of reinstatement. What the court does is to decide that if the employee of fixed term contract were to reinstated, it would be for the period of his or her engagement in terms of the contract.
Courts do not create a new contract for the parties by awarding damages beyond the period that an employee would have been employed, except for the premature termination.
That will be a violation of the principle of sanctity of contracts.
If a contract is for a fixed term, it automatically expires at the end of the specified period, unless the parties thereto mutually agree to its termination.
Any obligations entered into for performance by the parties to the contract also terminate with the expiry of the contract of employment.
In the absence of a finding that a dismissed employee had a legitimate expectation that he or she would be given a permanent contract, there is no basis for an award of damages that go beyond the unexpired period of employment at the time of termination.
The court should draw a distinction between a permanent employee and one on a fixed term contract in its quantification of damages.
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Trust Maanda is a legal practitioner and a partner at Maunga Maanda And Associates. He writes in his personal capacity. He can be contacted on +263 772432646.
Well done
Thank you The Manica Post Editor and your team for consistently carrying stories on the twin evils of drug and substance abuse as well as Gender Based Violence. This will go a long way in calling everyone into action to tackle the double menace and also expose those involved in their perpetration. Ultimately, helps to reduce the prevalence of these two problems. —