Allowances for employees are not a right but are negotiable, the Supreme Court has ruled.
In yet another labour-related shocker, the court ruled that arbitrators or the courts cannot dictate terms of a collective bargaining agreement between parties, adding allowances are not a right, but subject to negotiations between employers and employees.
The Supreme Court says the fact that one employer considers it appropriate to pay allowances puts no obligation on another to do the same.
The ruling that has set a precedent was delivered in a case involving the National Railways of Zimbabwe (NRZ).
The court upheld an appeal by the NRZ against an order of the Labour Court which had ruled that the company was bound to pay employees housing allowances and educational assistance for employees’ dependants.
The proceedings commenced on the 27th of June 2007 when the general secretary of the Zimbabwe Amalgamated Railwaymen Union wrote to the Railway Employment Council on the dispute on housing and education assistance allowances.
On the 19th of July 2007, the parties appeared before a conciliator who referred the matter to an arbitrator for compulsory arbitration as the parties failed to come to an agreed position over the dispute.
The arbitrator on the 9th of November 2007 ordered that the employees were entitled to allowances.
The employer was aggrieved by the award and lodged an appeal at the Labour Court.
The Supreme Court however found in favour of the company and ruled that the dispute is a matter for the parties to bargain and reach an agreement as a court cannot write a contract between parties.
The court also found that the Labour Court committed an error of law and set its court order and arbitrator’s decision aside, allowing the appeal by the employer to succeed with costs.