CASE NOTE
RETRENCHMENT PROCEDURE AND THE MEANING OF
“SHALL”: RECONCILING KANDEMIRI AND ZIMASCO
Kandemiri & 56 Ors v First Capital
Bank Ltd SC 22/25
and
Zimasco (Pvt) Ltd v Phiri & 139
Ors SC 62/26
---
by Advocate Benjamin Magogo
Advocate of the
Superior Courts of Zimbabwe
prelude
1.
Two reportable decisions of the
Supreme Court, delivered eighteen months apart, now govern the procedural law
of retrenchment. In Kandemiri & 56 Ors v First Capital Bank Ltd SC
22/25, delivered on 7 March 2025, CHATUKUTA JA (GUVAVA JA and MAKONI JA
concurring) held that an employer retrenching five or more employees need only
notify the works council, and need not consult it. In Zimasco (Pvt) Ltd v
Phiri & 139 Ors SC 62/26, delivered on 28 September 2026, UCHENA JA
(MAVANGIRA JA and ZHOU AJA concurring) held that an employer’s failure to give
the Retrenchment Board fourteen days’ notice before retrenching does not render
the retrenchment a nullity.
2.
The outcomes of the two
decisions point in the same direction. Both relieve employers of procedural
consequences which earlier regimes attached to retrenchment, and both rest on a
reading of the legislative history as a deliberate retreat from heavy
regulation. Their reasoning, however, rests on different approaches to the word
“shall”. Kandemiri treats “shall” as signifying strict compliance on
pain of nullity. Zimasco treats “shall” as no longer conclusive and
asks, by reference to context and consequences, whether the legislature
intended invalidity. Zimasco does not refer to Kandemiri.
3.
In this note I summarise both
decisions, identify where they are consistent and where they are in tension,
and consider whether they can be reconciled. I then draw out what I regard as
the lessons for practitioners advising employers, employees and trade unions on
retrenchment.
the
statutory provisions
4.
I begin with s 25A(5)(f) of the
Labour Act [Chapter 28:01], which provides that, without prejudice to any
applicable collective bargaining agreement, a works council “shall be entitled
to be consulted” by the employer about proposals relating to the retrenchment
of employees, whether voluntary or compulsory. The proviso states that any
matter involving the retrenchment of five or more employees within a period of
six months “shall be governed by sections twelve C and twelve D”, unless
otherwise agreed by the employer with the members of the works council
representing the workers committee. Section 25A(6) requires the employer,
before implementing a proposal on a matter in subsection (5), to afford the
members of the works council representing the workers committee a reasonable
opportunity to make representations and to advance alternative proposals, to
consider and respond to them and, if it does not agree with them, to state its
reasons, and generally to attempt to reach consensus with those members.
5.
Section 12C(3), as substituted
by Act 11 of 2023, provides that an employer who intends to retrench one or
more employees “shall” give fourteen days’ written notice of that intention to
the works council (or, in specified circumstances, the employment council), to
the Retrenchment Board, and to the employees concerned, the notices to the
works council and to the employees being required in the absence of an agreed
retrenchment package. Section 12C(1) defines “retrench”, with reference to the
date on which an employment contract is terminated for the purpose of
retrenchment, as any date specified by the employer which is not earlier than
the date on which written notice is lodged under s 12C(3)(a), and not later
than the date on which notice is lodged with the Retrenchment Board under s
12C(5). Where no date is specified, the latter date is presumed to be the
intended date.
6.
Section 12C(5) requires the
employer to notify the Retrenchment Board, within fourteen days after any
employee is retrenched, of the agreed package or of the fact that the minimum
package is being or is to be paid, whereupon the Board issues a notification
certificate. Under the proviso to s 12C(5), if the employer does not comply,
the full package vests in the affected employees on the twenty-first day after
they are first retrenched and may be enforced by them. Section 12C(12) makes it
an offence for an employer to purport to retrench an employee without giving
notice to the Retrenchment Board in accordance with s 12C(5).
7.
Finally, s 12D(1) provides that
every employer “shall ensure” that, at the earliest possible opportunity,
employees are kept informed of and consulted in regard to any major changes in
production, programmes, organisation or technology which are likely to entail
retrenchment.
kandemiri
& 56 ors v first capital bank ltd sc 22/25
8.
On 5 August 2019 the bank
announced at a works council meeting its intention to restructure, and at a
follow-up meeting on 9 August 2019 it produced a list of the employees to be
retrenched. It then served notices of intention to retrench on the works council,
the Retrenchment Board and each affected employee, and retrenched the
appellants with effect from 31 August 2019, paying the minimum package. A
designated agent held that the meetings were the communication of a decision
already taken rather than consultation under s 25A(5), that the retrenchment
was therefore an unfair dismissal, and ordered reinstatement or damages. The
Labour Court reversed that decision.
9.
The Supreme Court dismissed the
employees’ appeal. On s 25A(5), it reasoned that the use of “shall” in the main
provision “signifies the need for strict compliance with the section failure of
which renders the retrenchment process a nullity”, relying on a dictum of
UCHENA JA in Unki Mines (Pvt) Ltd v Shurugwi Town Council & Anor SC
13/24 at p 9 (para 27). An employer retrenching any employees is therefore
obliged to consult the works council first (para 28). The proviso, however,
uses the same mandatory language to take retrenchments of five or more
employees out of s 25A(5) and to place them under ss 12C and 12D, unless the
employer and the works council agree otherwise (paras 29 and 30).
10.
On s 12C, the Court held that
the section requires notice, not consultation, and declined to substitute the
word “consult” for the words “give written notice” (para 34). It traced the
history of the provision: the 2002 version of s 12C, which applied to five or
more employees and required the works council to attempt to secure agreement on
whether employees should be retrenched; SI 186 of 2003, which regulated retrenchments
of fewer than five; the 2015 substitution, which extended s 12C to one or more
employees and removed the consultative step; and the 2023 substitution, which
retained the requirement of notice only (paras 37 to 41).
11.
Throughout, the Court applied a
literal approach. Relying on Mushoriwa & Ors v Parliament of Zimbabwe
& Anor CCZ 04/23 and Natal Joint Municipal Pension Fund v Endumeni
Municipality 2012 (4) SA 593 (SCA), it held that the provisions were
precise and unambiguous, so that there was no basis for the purposive
interpretation for which the employees contended (paras 32, 42 and 44).
zimasco
(pvt) ltd v phiri & 139 ors sc 62/26
12.
Zimasco served notices of
compulsory retrenchment on 30 April 2024, effective 31 May 2024, but notified
the Retrenchment Board only on 13 June 2024. It conceded non-compliance with s
12C(3)(a)(ii). The Labour Court held the provision to be peremptory, declared
the retrenchment a nullity and ordered reinstatement with full benefits.
13.
The Supreme Court allowed the
employer’s appeal. It held that “shall” on its own can no longer conclusively
indicate an intention to make a provision mandatory, relying on Moyo &
Ors v Zvoma NO & Ors 2011 (1) ZLR 345 (S) and Shumba & Anor v
ZEC & Anor 2008 (2) ZLR 65 (S) (paras 34 to 36). It applied the guides
summarised in Pio v Franklin NO & Anor 1949 (3) SA 442 (C): that
“shall” is prima facie peremptory unless other circumstances negative that
construction; that negative language points to a peremptory provision; that
positive language without a sanction points to a directory provision; that a
construction leading to injustice points the same way; that legislative history
may assist; and, drawing on Hercules Town Council v Dalla 1936 TPD 229,
that where the body enjoined to perform the act is a public body, the
presumption is likewise that the provision is directory (para 37).
14.
Applying those guides, the
Court held that s 12C(3)(a)(ii) is directory. The provision is positive in form
and attaches no sanction of invalidity (para 46). The definition of the date of
retrenchment in s 12C(1) is flexible and contains a self-correcting presumption
where no date is specified, which is inconsistent with an intention that
defects should be fatal (paras 42 and 44). That definition is procedural, the
substantive definition of “retrench” being in s 2 (para 45). The Retrenchment
Board, which is to be notified, is a public body (paras 37 and 43). And the
legislative history shows that the Board’s role has been reduced from active
mediation under SI 404 of 1990, as described in Stanbic Bank Zimbabwe Ltd v
Charamba 2006 (1) ZLR 96 (S), to determining or certifying the package, so
that the notice is for its information only (paras 48 to 50).
15.
On the cross-appeal, the Court
held that the absence of a prescribed formula for the minimum package before SI
191 of 2024 did not render the retrenchment unlawful, since that would have
imposed an obligation incapable of compliance (paras 63 to 65).
where
the decisions are consistent
16.
The two decisions share a
reading of legislative history. Kandemiri endorsed the Labour Court’s
view that the legislature intended to “retreat from the rigors of the previous
retrenchment regime” (paras 36 and 37), and traced the progressive removal of
consultation from s 12C. Zimasco traced the parallel reduction of the
Retrenchment Board’s role from mediator to certifier of the package. Both read
the statute as now leaving the decision to retrench with the employer, subject
to notice and to the package.
17.
The outcomes are also
consistent in their effect. In each case the employees sought to invalidate a
retrenchment on procedural grounds, and in each case the Court declined. Taken
together, the decisions make it difficult to set aside a retrenchment of five
or more employees for want of consultation or for defective notice.
18.
Finally, the decisions concern
different provisions. Kandemiri concerned the entitlement of a works
council to be consulted under s 25A(5) and the content of s 12C(1) as it stood
in 2019. Zimasco concerned the timing of notice to the Retrenchment
Board under s 12C(3)(a)(ii) as substituted in 2023. In my view there is no
direct conflict between their ratios.
where
the decisions are in tension
the meaning of “shall”
19.
The principal tension lies in
method. Kandemiri proceeds on the footing that “shall” signifies strict
compliance and that failure renders the retrenchment process a nullity. With
respect, it cites Unki Mines for that proposition without engaging with
the line of authority, including Moyo v Zvoma and Shumba v ZEC,
which holds that the word is not conclusive and that the consequence of
non-compliance must be determined from context.
20.
Zimasco applies precisely that line of authority and concludes that the
consequence of non-compliance with a “shall” provision in the retrenchment
provisions of the same Act is not nullity. With respect, it does not mention Kandemiri.
There is a certain irony in this. The dictum relied on in Kandemiri was
that of UCHENA JA in Unki Mines, and it was UCHENA JA who authored Zimasco,
applying the contextual approach.
21.
The two approaches cannot both
describe the general rule. In my view Zimasco’s approach is the
established one, and it is consistent with Moyo v Zvoma, which
recognised the movement away from the strict exaction of compliance. The
statement in Kandemiri is, with respect, best understood as a statement
about s 25A(5) in particular, and it was in any event not necessary to the
decision, which turned on the proviso.
whether the kandemiri nullity statement
is part of the ratio
22.
The question before the Court
in Kandemiri was whether an employer retrenching five or more employees
must consult the works council. The answer turned on the proviso. The Court’s
statement that failure to consult under the main part of s 25A(5) renders a
retrenchment a nullity concerned retrenchments of fewer than five employees,
which were not before it. On ordinary principles, I consider that statement to
be obiter. A practitioner advising on a retrenchment of fewer than five
employees cannot safely assume that non-consultation is fatal, nor that it is
harmless. The question is open, and on the Zimasco approach a court
would be required to examine context and consequences before reaching a
conclusion of nullity.
an anomaly between small and large
retrenchments
23.
If the Kandemiri
statement were applied as a rule, an employer retrenching three employees
without consulting the works council would face nullity, while an employer
retrenching three hundred employees, who need only notify, would face none; and
on Zimasco even late notice would not be fatal. I find that result
difficult to justify on any purposive view of the Act. It is the product of the
proviso as drafted, and Kandemiri was right that the courts cannot
rewrite it. But it reinforces my conclusion that the consequence of
non-consultation in small retrenchments should be determined contextually
rather than assumed.
literal and contextual interpretation
24.
Kandemiri insisted on literal interpretation in the absence of ambiguity. Zimasco
expressly weighed the consequences of a strict reading and the injustice to
which it would lead (para 47). The difference is, in my view, partly explained
by the different questions asked. In Kandemiri the question was what the
provision requires, and the text answered it. In Zimasco the question
was what follows from non-compliance, on which the text is silent, so that the
Court had to infer the legislative intention. The two approaches are therefore
complementary rather than contradictory, provided the distinction between the
content of a duty and the consequence of its breach is kept in view. Kandemiri’s
statement about nullity, with respect, blurred that distinction.
the reasoning in zimasco
25.
With respect, two of the
supports for the conclusion in Zimasco are open to question. The first
is the self-correcting presumption in s 12C(1) (paras 42, 44 and 45). That
presumption operates only where the employer specifies no date of retrenchment.
Zimasco did specify a date, 31 May 2024, which preceded its notice to the
Retrenchment Board. On the Court’s own reading of the definition, that the
specified date may not precede the notice to the Board under s 12C(3)(a)(ii)
(para 42), Zimasco specified a date which the definition prohibits. A saving
provision for the failure to specify a date does not, in my view, obviously
save the specification of a date which the definition itself prohibits.
26.
The second is the public body
presumption. As summarised in Pio v Franklin, that presumption arises
“when a body which is enjoined to perform a certain act is a public body” (para
37). It is concerned with duties imposed on a public body. In Zimasco
the duty was imposed on a private employer, and the Retrenchment Board was
merely the recipient of the notice. With respect, the presumption does not
readily apply. Neither point necessarily defeats the conclusion, which is
sufficiently supported by the positive form of the provision, the absence of a
sanction and the reduced role of the Board, but both weaken the reasoning and
should be borne in mind when Zimasco is relied on in respect of other
notices.
which notices are directory?
27.
Zimasco decided only that notice to the Retrenchment Board under s
12C(3)(a)(ii) is directory, and part of its reasoning depended on the Board
being a public body with a limited role. That reasoning does not, in my view,
transfer automatically to notice to the works council under s 12C(3)(a)(i), or
to notice to the employees themselves under s 12C(3)(a)(iii). Those notices
protect the people whose employment is affected, and the public body
presumption does not apply to them. Whether a complete failure to notify the
employees or the works council would invalidate a retrenchment therefore remains
open.
28.
With respect, Zimasco
also did not consider s 12C(12). That provision attaches a criminal sanction to
a failure to notify the Retrenchment Board under s 12C(5), but not to the
notice under s 12C(3)(a)(ii). The point arguably supports the Court’s conclusion:
where the legislature wished to sanction a failure of notice, it did so
expressly, and it chose a criminal penalty rather than invalidity. The proviso
to s 12C(5), which vests the full package in the employees where the employer
fails to notify the Board after the retrenchment, points the same way. But both
provisions also confirm that some notice obligations in s 12C carry real
consequences.
can
the decisions be reconciled?
29.
In my view they can, on the
following basis. First, Kandemiri’s holding is confined to what s 25A(5)
and s 12C require: for five or more employees, notice and not consultation.
Secondly, Zimasco’s holding is confined to the consequence of late
notice to the Retrenchment Board, which does not invalidate the retrenchment.
Thirdly, Kandemiri’s statement that non-compliance with a “shall”
provision renders a retrenchment a nullity was not necessary to the decision
and should not be applied mechanically. The consequence of a breach is to be
determined by the contextual approach applied in Zimasco, Moyo v
Zvoma and Shumba v ZEC.
30.
Read in that way, the decisions
present a coherent picture. The content of an employer’s procedural obligations
is determined by the text, read literally where it is clear. The consequence of
failing to comply with them is determined contextually, with a presumption
against invalidity where the provision is positive in form, lacks a sanction,
concerns a public body, or would produce injustice if applied strictly.
lessons
for practitioners
advising employers
31.
I would advise employers to
give every notice required by s 12C(3), in writing, fourteen days before the
retrenchment date, to the works council or employment council, the Retrenchment
Board and each affected employee. Zimasco protects late notice to the
Board, but it says nothing about a failure to notify the employees or the works
council, and it took more than two years of litigation for the employer in that
case to succeed.
32.
An employer should not specify
a retrenchment date earlier than the date on which the s 12C(3)(a) notice is
lodged, and should give the post-retrenchment notice to the Retrenchment Board
under s 12C(5) within fourteen days. A failure to do so is an offence under s
12C(12) and, under the proviso to s 12C(5), causes the full package to vest in
the employees on the twenty-first day after the retrenchment.
33.
For retrenchments of fewer than
five employees within six months, the employer should consult the works council
under s 25A(5) and (6) before implementing the decision. Kandemiri
treats that consultation as mandatory, and its statement that failure renders
the retrenchment a nullity, although in my view obiter, will be relied on by
employees.
34.
For retrenchments of five or
more employees, Kandemiri means that consultation under s 25A(5) is not
legally required unless the employer has agreed with the works council to
proceed under that section. Employers should check whether any such agreement
exists, including in a collective bargaining agreement, because the proviso is
subject to it and s 25A(5) is expressly without prejudice to applicable
collective bargaining agreements.
35.
Employers should not neglect s
12D(1). It requires them to keep employees informed of, and consulted on, major
changes likely to entail retrenchment, at the earliest possible opportunity. Kandemiri
did not decide its effect. On Kandemiri’s own reasoning about “shall”,
employees may argue that it is mandatory. Early and documented engagement under
s 12D(1) closes off that argument, and it is in any event good industrial
relations practice.
36.
The minimum package should be
calculated under SI 191 of 2024. Zimasco’s protection for retrenchments
carried out without a prescribed formula applies only to the period before that
instrument.
advising employees and trade unions
37.
In my view, procedural
challenges to retrenchments of five or more employees founded on a lack of
consultation under s 25A(5), or on late notice to the Retrenchment Board, are
now unlikely to succeed. The stronger grounds lie elsewhere.
38.
Practitioners acting for
employees should examine compliance with the notices to the employees and the
works council under s 12C(3)(a)(i) and (iii). Zimasco does not decide
that their complete omission is cured, and the public body reasoning does not
apply to them.
39.
They should also examine
compliance with s 12D(1). Where the employer gave no prior information or
consultation on the changes which led to the retrenchment, a challenge may be
framed on that provision, relying on its mandatory language and on the purpose
of the Act in s 2A(1)(e).
40.
They should examine the
substance. Zimasco emphasises that the substantive definition of
“retrench” is in s 2: termination for the purpose of reducing expenditure or
costs, adapting to technological change, reorganising the undertaking, or
similar reasons. A retrenchment which is not genuinely for such a reason, or
which is used to remove particular employees, may be attacked as an unfair
dismissal. The package, including the employer’s capacity to pay an enhanced
package under s 12C(13) and (14), is also a live avenue.
41.
For retrenchments of fewer than
five employees, they may rely on s 25A(5) and on the Kandemiri dictum,
recognising that the employer will argue that it is obiter and that Zimasco
requires a contextual assessment of consequences.
for all practitioners
42.
I would urge all practitioners
to distinguish clearly between the content of a statutory duty and the
consequence of its breach. The first should be argued by reference to the text,
and the second by reference to the contextual guides in Moyo v Zvoma, Shumba
v ZEC and Pio v Franklin as applied in Zimasco. Kandemiri
should be cited for what s 25A(5) and s 12C require, and Zimasco for
what follows when they are not complied with.
43.
Where Kandemiri’s
nullity statement is relied on by an opponent, the answer is that it was
obiter, that it did not engage with the contextual line of authority, and that
the author of the dictum on which it relied applied the contextual approach in Zimasco.
conclusion
44.
Kandemiri and Zimasco reach consistent results and together reflect a
clear legislative and judicial movement away from the procedural rigour of
earlier retrenchment regimes. Their apparent inconsistency lies in Kandemiri’s
treatment of the word “shall” as signifying nullity, a statement which was,
with respect, unnecessary to its decision and which sits uneasily with the
contextual approach the Supreme Court has long applied, and applied again in Zimasco.
Reconciled on the basis that the text governs the content of the duty and the
context governs the consequence of its breach, the two decisions give
practitioners a workable framework. Several questions nonetheless remain open,
notably the effect of a failure to notify the employees and the works council,
the force of s 12D(1), and the consequence of non-consultation in retrenchments
of fewer than five employees. In my view these are likely to be the next
battlegrounds in retrenchment litigation.
Harare, 28 October 2026
Advocates'
Chambers, 7th Floor Beverley Court, 100 Nelson Mandela Avenue,
Cnr Simon V. Muzenda Street, Harare,
Zimbabwe | Bus: (0242) 252782/3
