MCCOSH v PIONEER CORPORATION AFRICA LTD 2010 (2) ZLR 211 (H)

Flynote

Employment - contract - remuneration - agreement to pay employee in foreign currency - lawfulness of such agreement - requirement to pay employee in "legal tender "- meaning

▷ Words and phrases - "legal tender "-Labour Act [Chapter 28:01] -s 12A (1)

Headnote

The plaintiff had been employed by the defendant at a time before the general use of foreign currency became lawful. His contract expressed his salary in Zimbabwe currency, although later an acknowledgment of debt was issued by the defendant, expressed in foreign currency. The plaintiff claimed this sum from the defendant. It was argued, on the defendant's behalf, that the agreement to pay the plaintiff in foreign currency was unlawful, both under the Exchange Control legislation and under the Labour Act [Chapter 28:01], s 12A(1) of which requires employees to be paid in "legal tender".

Held, that an agreement to pay an employee in a foreign currency is not unlawful but, without the approval of the Reserve Bank, payment in a foreign currency would be unlawful.

Held, further, that s 12A (1) of the Labour Act restricts those employees who remunerate their employees in money to the use of "legal tender", to the exclusion of other modes of payment such as promissory notes, vouchers, coupons or any form other than legal tender. The phrase "any form other than legal tender" is of wide application. It restricts payment to the use of legal tender and excludes payment in kind or money that is not legal tender. Subsection(2) permits employers who are in occupations or industries that customarily pay remuneration in kind to do so. Section 12 A(2)(e) puts it beyond doubt that remuneration in kind is not the same as remuneration in money, and is clear proof that, in the mind of the legislature, legal tender in s 12A (1) was another name for "money". At that time, foreign currency did not constitute legal tender. Legal tender is the money of a country in actual use. It is such money in the legal sense as the legislature has so defined in the statutes organizing the monetary system and is the medium legally authorized by the State for the payment of debts. Foreign currency is not legal tender, for not all money is legal tender, but all legal tender is money. Legal tender is such money, as is the current "coin of the realm". At the time the acknowledgment of debt was entered into, the legal tender for the payment of salaries in Zimbabwe was local currency and not foreign currency.