Can an employee hold on to the employers’ property after termination of contract? This is a question which has vexed many employers.
In most cases, disputes arise when the employment relationship comes to an end and the employee refuses to surrender back to the employer the allocated company vehicle or house.
While employees sometimes have sound reasons for doing so, there are a few cases where the motive is only to spite the employer.
This article will examine a few recent judgments by the High Court of Zimbabwe which I believe are indicative enough of the legal position on this subject. All cases had to do with company vehicles.
The first and most interesting case is that of Makamure vs Deven Engineering (High Court judgment HH 106/08).
Facts of the matter were that Makamure terminated his employment with Deven Engineering after four years of service.
The employer declined to sell to him the company car he was using. Aggrieved, he sought a court order compelling the company to sell the vehicle to him.
In terms of the company’s policy, a vehicle would be disposed of after three years of continuous use by the employee concerned.
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The court noted that Makamure had the right of pre-emption or first refusal which entitled him the right to the first opportunity of buying if the company decided to sell the vehicle.
However, such a right is conditional. In terms of the law of contract, an offer by one party must be accepted by the other party for there to be an agreement or contract.
The offeror (seller) defines the rules of engagement, such as the methods, manner and time of acceptance.
If there is a dispute and reference is made to the court, the court can only interpret the behaviour of the parties on the basis of the objective facts available to it.
In this case, there was no offer on the table for Makamure to accept or reject. Makamure could not exercise his right of first refusal in a vacuum. The court could therefore not compel the employer to sell the vehicle to him.
The second case is that of Zimbabwe Broadcasting Holdings vs Gono (High Court judgment HH 162/09). Gono was employed by ZBH. In March 2008, her dismissal from employment was confirmed.
At the time of her dismissal, she was in possession of an officially allocated vehicle belonging to ZBH.
When the employer sought the return of its vehicle from her, she refused. The employer then instituted court action to recover the vehicle.
In her judgment, Justice Gowora ruled that once an employee has been suspended or dismissed from employment, any benefits extended to such employee from that relationship cease.
Gono’s use of the employer’s vehicle was by virtue of her employment and her right to retain possession ended with her dismissal from employment.
Judge President Makarau (as she then was) expressed similar views in the case of Medical Investments Ltd vs Pedzisayi (High Court judgment HH 26/10).
In this case Pedzisayi, after serving her employer for six years, resigned from her job. During her employment she had been allocated a motor vehicle, which she held on to when she left the job.
Her argument was that in terms of the scheme under which she was allocated a vehicle, she was entitled to purchase the car. The employer sought the return of the car.
The former employee opposed the application on the grounds that the matter was essentially a labour dispute in respect of which the High Court did not have jurisdiction.
Judge President Makarau held that since the applicant (Medical Investments Ltd) and the respondent (Pedzisayi) were no longer employer and employee respectively, the issue at hand was now a common law issue and therefore the jurisdiction of the High Court was not ousted.
The dispute between the parties centred on the possession of the motor vehicle and not on the terminated contract of employment; hence remedy or resolution could not be found in terms of the Labour Act.
In this instance, the status of the former employee (Pedzisayi) was not in dispute and therefore the matter fell outside the purview of the Labour Court.
The employer’s application for a vindicatory order before the High Court was therefore valid.
In the fourth case of DHL Intl (Pvt) Ltd vs Madzikanda (High Court judgment HH 51/10), Judge President Makarau addressed the same issue and gave further useful insights.
In her judgment in the DHL case, Judge President Makarau dealt with the issue of whether applications by employers to recover property from employees should be brought before the High Court or the Labour Court.
She criticised what she saw as a general misconception amongst employers that they could easily avoid the jurisdiction of the Labour Court by seeking to recover property in the possession of an employee without first exhaustively dealing with the termination of the employment of that employee.
In terms of the Labour Act, the Labour Court has exclusive jurisdiction in matters relating to employment.
The possession of the employer’s property by an employee in terms of the contract of employment is a matter to be decided by the Labour Court.
The Judge President then explained how a vindicatory order works. The owner of the property (in this case the employer) can apply for a vindicatory order (actio rei vindicatio) from the courts. Vindication is a remedy that is available to an owner against the world at large.
To put this judgment into context, the employer, by reason of its rights of ownership, is competent at law to demand possession of its property from the employee during the tenure or expiry of the employment contract.
To succeed in such an action, the employer must allege and prove that it is the owner of the property in question and that the employee is in possession of it.
The right of the employer to possess its property is not absolute, however, and may be subject to some other right that the employee may have against the employer.
Put in simple terms, where the employee held the employer’s property in terms of a contract of employment, and the lawfulness of the termination of the contract of employment is in dispute, the employee would have to prove the right to possess the property against the employer, pending the determination of the dispute.
In order to avoid being entangled in protracted and expensive court battles with former employees to recover their property, it is advisable for companies to consider providing or guaranteeing loans for their employees to purchase their own vehicles or houses.
When the employment relationship eventually ceases, it would be much easier to recover any outstanding loans from the employee.
Otherwise by the time you reclaim your house or vehicle from the hands of the former employee, the property will have depreciated in value from deliberate neglect or misuse.
Isaac Mazanhi is a labour analyst writing in his own capacity.
