Trust Bank managers oppose liquidator
TRUST Bank’s liquidator has filed a High Court application seeking to repossess service vehicles in possession of the bank’s former managers.
But the ex-employees, in a counter application, have opposed the move, arguing that their contracts of employment could not be terminated by the liquidation process.
The bank is targeting 20 vehicles which were allocated to senior workers, most of whom were managers. The liquidator claims that if a company goes into liquidation, all employment contracts automatically become null and void.
“The 20 were employed by Trust Bank until the company was placed in provisional liquidation by the High Court thereby automatically terminating their contracts of employment. In terms of the contact of employment, the motor vehicles are owned by the bank and the employees are only allowed to use the vehicles in the discharge of duties while in employment and with consent of the bank which has since been withdrawn,” said provisional liquidator, John Chikura, in his submissions.
“By way of letters written on March 11 last year, the employees were directed to surrender the motor vehicles. Through the letter of demand, they were advised to approach the bank but they did not do so. The employees also failed to respond to letters in any way and did not surrender the motor vehicles despite the fact that they have no lawful entitlement to hold onto the bank’s vehicles. The continued possession of the motor vehicles by the employees is unlawful and entitles the applicant to seek relief in the matter,” said Chikura.
However, the employees, through their lawyer, Albert Chambati of Chambati, Mataka and Makonese Attorneys, have opposed the directive to surrender the vehicles, arguing that they were still employed by the bank.
“We remain applicant’s employees because our contracts of employment have not yet been terminated. The contract of employment can only be terminated through provisions of the Labour Act 28; 01 and it does not give provision to automatic termination. As already been confirmed by the applicant, possession of the vehicles is on the basis of valid contracts of employment and therefore until the employment contract is lawfully terminated, entitlement to the vehicles shall remain.
“Sections 218(2) (a) of the Companies Act (Chapter 24:03) which empowers the provisional liquidator to take custody of all assets belonging to the applicant pending granting of the final order does not terminate employment contracts and dispossess employees of their contractual benefits. The employer remains bound by the employment contract until such a stage as it is lawfully terminated. The applicant cannot unilaterally terminate employment contracts outside provisions of the labour Act. Employees are entitled to, among other things, a notice of termination of the employment contract in the event that it is terminated. The applicant has not furnished the court with any such notice of termination,” they averred.
“Furthermore the applicant has not been placed under final liquidation and remains only under provisional liquidation. In any event… the Labor Act Chapter 28:01 recognises the applicant as an employer and the mere fact that the respondent has been placed under liquidation does not on its own therefore terminate the employment contract as implied by the applicant,” said the employees.
Trust Bank Corporation was placed under provisional liquidation in 2013, with the Deposit Protection Corporation’s chief executive officer, John Chikura, being appointed the provisional liquidator pending the granting of a final order.
The appointment of the liquidator followed a court application by the Reserve Bank of Zimbabwe to place the troubled bank under liquidation following the annulment of its operating licence.
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