Supreme court clears ZESA boss in US$9.5 million p...

Supreme court clears ZESA boss in US$9.5 million payment to Indian firm

Nyashadzashe Ndoro

Chief Reporter

The Supreme Court of Zimbabwe has upheld Tererai Louis Mutasa's appeal, overturning his dismissal as Managing Director of the Zimbabwe Electricity Supply Authority and acquitting him of misconduct charges related to an irregular advance payment of US$9.5 million to an Indian company, PME Power Solutions (India) Limited, and unauthorized donations to the Zimbabwe Republic Police.

The ruling provides critical guidance on the limits of disciplinary action, stating that employers cannot revive past misconduct after a contract has been terminated and a new one signed. It also protects employees from unfair treatment.

Mutasa was dismissed after being charged with two counts of misconduct. The first charge involved an advance payment of US$9.5 million to an Indian company, which the employer deemed irregular. The second charge involved authorizing donations to the ZRP.

Mutasa argued that the advance payment did not violate his contract and that he was not responsible for the donations.

"As regards the penalty, the disciplinary authority paid lip service to the totality of the mitigating circumstances raised by the appellant, inter alia, the insignificant amount donated to the ZRP—not as a bribe but as corporate sponsorship support—the absence of prejudice to the company as a consequence, the ZESA Holdings interventions and operating practice coupled with ministerial directives which the appellant had no power to override or ignore.

In settling for dismissal, the disciplinary authority grossly misdirected itself in the exercise of discretion such that no reasonable tribunal could have arrived at such a decision," Mutasa stated.

The employer, however, countered that the payment was irregular and that Mutasa had indeed authorized the donations.

Initially, the Labour Court upheld Mutasa's dismissal, finding him guilty of misconduct. However, upon appeal, a Supreme Court bench comprising Justices Nicholas Mathonsi, Lillian Kudya, and Joseph Musakwa reversed this decision, ruling in Mutasa's favor. The court set aside the disciplinary authority's findings, acquitted Mutasa of all misconduct charges, and reinstated him with no loss of salary or benefits.

The court stated that the termination of Mutasa's first contract in 2013, followed by a new contract in 2014, constituted a fresh start. The employer could not revive past misconduct after the original contract had been terminated and a new one signed. Moreover, Mutasa could not be held liable for actions taken by others, such as donations made by the Human Resources Manager.

The court emphasized that employers cannot revive past misconduct after a contract has been terminated and a new one signed, and employees cannot be held accountable for actions taken by others.

"While an employer has the right to discipline an employee for misconduct that occurred during the term of an expired employment contract in situations where the expired contract is renewed immediately, where the employment contract is terminated by dismissal or retrenchment, the employer does not have the right to discipline the employee for misconduct that occurred during the lifespan of an already terminated contract. The misconduct in question would have ended with the terminated contract," the court said.

"The liability of an employee under s 45 (c) of the Public Finance Management Act is personal and attaches to the employee concerned. The employee is judged based on the steps he or she personally takes that result in irregular expenditure. Where the payment is made by a particular employee, it is generally that employee who is held accountable for it, not any other person."

The court also distinguished this case from a previous one, Muchechetere v Zimbabwe Broadcasting Corporation & Ors, where the employment relationship continued uninterrupted. In Mutasa's case, the contract was terminated and a new one signed, making it a distinct scenario.