Innocent Sibonginkosi Ncube
Harare \u2013 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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
Background of the Dispute<\/p>\n\n\n\n
The case arose after salary negotiations between Zimra and the Zimbabwe Revenue and Allied Workers\u2019 Union (Zimrawu) for July to December 2023 reached a deadlock and were referred to arbitration.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
However, Zimra contested the award, arguing that it breached the authority\u2019s approved 2023 budget and violated the Public Finance Management Act.<\/p>\n\n\n\n
Zimra\u2019s Argument: Budgetary and Legal Constraints<\/p>\n\n\n\n
Representing Zimra, lawyer Simplicio Bhebhe of Kantor and Immerman Legal Practitioners argued that the award would push the tax agency\u2019s expenditure 2.7% beyond its approved budget.<\/p>\n\n\n\n
\u201cThe 2023 budget cycle had closed, and any expenditure outside the approved budget required a supplementary budget, which was no longer possible,\u201d Bhebhe told the court.<\/p>\n\n\n\n
He further contended that the arbitrators had disregarded legislative restrictions binding Zimra, creating an \u201cillegality\u201d by imposing financial obligations outside its statutory framework.<\/p>\n\n\n\n
Workers\u2019 Union Defends Award, Cites Economic Hardships<\/p>\n\n\n\n
The workers\u2019 union, represented by Advocate Benjamin Magogo, defended the award, arguing that soaring inflation and currency instability justified the salary adjustments.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
\u201cZimra employees are already under financial strain despite receiving transport, housing, and medical allowances,\u201d he argued.<\/p>\n\n\n\n
Court\u2019s Decision: Award \u2018Contrary to Public Policy\u2019<\/p>\n\n\n\n
Justice Dube-Banda dismissed the union\u2019s arguments, emphasizing that Zimra\u2019s spending must align with its approved budget.<\/p>\n\n\n\n
\u201cZimra 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,\u201d he ruled.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
Broader Implications for Fiscal Policy<\/p>\n\n\n\n
The court warned that the arbitral award risked breaching the government\u2019s fiscal rule, which caps employment costs at 50% of annual revenues.<\/p>\n\n\n\n
\u201cThe substantive effect of the award is that it has the potential to breach the Government\u2019s fiscal rule. In such a case, the conception of justice in Zimbabwe would be intolerably hurt,\u201d Justice Dube-Banda said.<\/p>\n\n\n\n
He further noted that Zimra employees already enjoy one of the highest remuneration packages in the civil service, making the arbitral award \u201cunjustified and arbitrary.\u201d<\/p>\n\n\n\n
Final Ruling<\/p>\n\n\n\n
The High Court set aside the contested portions of the arbitral award and ordered the workers\u2019 union to cover the legal costs of the case.<\/p>\n\n\n\n
The judgment reinforces the legal boundaries within which public entities must operate, particularly in collective bargaining processes involving state finances.<\/p>\n\n\n\n
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