Innocent Sibonginkosi Ncube
Harare – The High Court has nullified an arbitral award that granted Zimbabwe Revenue Authority (Zimra) employees a 300% salary increase and a mandatory 13th cheque, ruling that the decision violated public policy and exceeded legal budgetary limits.
Justice Christopher Dube-Banda delivered the judgment, stating that Zimra, as a public entity, could not lawfully implement the award as it contravened fiscal regulations and the Revenue Authority Act.
Background of the Dispute
The case arose after salary negotiations between Zimra and the Zimbabwe Revenue and Allied Workers’ Union (Zimrawu) for July to December 2023 reached a deadlock and were referred to arbitration.
A tribunal comprising arbitrators Arthur Marara and George Makings ruled in favor of the employees, approving the substantial salary adjustment and a compulsory 13th cheque.
However, Zimra contested the award, arguing that it breached the authority’s approved 2023 budget and violated the Public Finance Management Act.
Zimra’s Argument: Budgetary and Legal Constraints
Representing Zimra, lawyer Simplicio Bhebhe of Kantor and Immerman Legal Practitioners argued that the award would push the tax agency’s expenditure 2.7% beyond its approved budget.
“The 2023 budget cycle had closed, and any expenditure outside the approved budget required a supplementary budget, which was no longer possible,” Bhebhe told the court.
He further contended that the arbitrators had disregarded legislative restrictions binding Zimra, creating an “illegality” by imposing financial obligations outside its statutory framework.
Workers’ Union Defends Award, Cites Economic Hardships
The workers’ union, represented by Advocate Benjamin Magogo, defended the award, arguing that soaring inflation and currency instability justified the salary adjustments.
Magogo cited Section 65(5)(a) of the Constitution, which guarantees the right to collective bargaining, and insisted that employees needed relief from rising living costs.
“Zimra employees are already under financial strain despite receiving transport, housing, and medical allowances,” he argued.
Court’s Decision: Award ‘Contrary to Public Policy’
Justice Dube-Banda dismissed the union’s arguments, emphasizing that Zimra’s spending must align with its approved budget.
“Zimra is a public entity and cannot expend outside the approved budget. The award requires Zimra to pay more than its legislatively approved budget, which is contrary to public policy,” he ruled.
The judge also rejected claims that Zimra had agreed to the 13th cheque, stating that the tax authority had consistently maintained that such payments must comply with its performance-based incentive policy.
Broader Implications for Fiscal Policy
The court warned that the arbitral award risked breaching the government’s fiscal rule, which caps employment costs at 50% of annual revenues.
“The substantive effect of the award is that it has the potential to breach the Government’s fiscal rule. In such a case, the conception of justice in Zimbabwe would be intolerably hurt,” Justice Dube-Banda said.
He further noted that Zimra employees already enjoy one of the highest remuneration packages in the civil service, making the arbitral award “unjustified and arbitrary.”
Final Ruling
The High Court set aside the contested portions of the arbitral award and ordered the workers’ union to cover the legal costs of the case.
The judgment reinforces the legal boundaries within which public entities must operate, particularly in collective bargaining processes involving state finances.
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