For years, former employees of SMM Holdings carried court papers, pension records and retrenchment notices as symbols of a promise that never came due.
Some died waiting.
Others watched their children grow into adulthood while salaries, retrenchment packages and terminal benefits remained trapped in a legal limbo created by a law designed to manage insolvent State-indebted companies.
Last week, Zimbabwe’s highest court delivered a judgment that could reshape the relationship between labour rights and corporate reconstruction in the country.
In a landmark ruling handed down on June 17, the Constitutional Court declared unconstitutional a key provision of the Reconstruction of State-Indebted Insolvent Companies Act that effectively prevented former SMM workers from pursuing benefits owed to them. The court found that Section 28(2) of the Act unlawfully suspended workers’ labour rights for an indefinite period, violating constitutional guarantees of fair labour practices.
The case was brought by 27 former employees who argued that the law had denied them access to salaries, retrenchment packages and other terminal benefits following the termination of their employment. The workers told the court that many former colleagues had died before receiving what was owed to them.
Writing for a unanimous bench, Justice Anne-Mary Gowora said the workers’ entitlement to terminal benefits was not disputed and that the law unjustifiably prevented them from enforcing those rights. The court ruled that the provision was inconsistent with Section 65(1) of the Constitution, which guarantees fair labour practices, as well as provisions of the Labour Act.
“The applicants, having been either dismissed or retrenched by their erstwhile employer, are owed terminal benefits. That these are due is not disputed,” the judgment stated
The ruling strikes at the heart of a long-running dispute dating back more than two decades. SMM Holdings has remained under reconstruction since the Government intervened in the company during the mid-2000s, a process intended to protect strategic assets while restructuring operations. For workers, however, reconstruction became synonymous with delay.
The Constitutional Court rejected arguments by the Ministry of Justice, the Attorney-General and SMM Holdings that alternative remedies existed and that the matter was not ripe for constitutional determination. Instead, the judges found that a genuine dispute existed and that the workers’ rights had been directly impaired.
Importantly, the court underscored the supremacy of labour protections, holding that employees of companies under reconstruction do not lose their rights simply because their employer is undergoing a special legal process. Justice Gowora said the Labour Act applies “with full force” even during reconstruction proceedings.
The judges further found that Section 28(2) failed the constitutional test of proportionality because it completely removed workers’ ability to exercise their labour rights.
“Section 28(2) fails the proportionality test as it completely removes from employees the fair labour rights enshrined in Section 65(1),” the court ruled.
Yet the judgment stops short of immediate enforcement.
Recognising the broader legal implications, the Constitutional Court suspended its declaration of invalidity for 180 days, giving Government time to amend the legislation. The order will not operate retrospectively and will not affect actions taken before the judgment.
For labour organisations, however, the ruling represents a major breakthrough.
Speaking after the judgment, Zimbabwe Diamond and Allied Minerals Workers Union Secretary General Justice Chinhema welcomed the decision, describing it as a victory for workers who have endured years of uncertainty. He said the union would now engage SMM Administrator Munashe Shava and legal advisers to determine the practical path towards settling outstanding claims.
The challenge now shifts from the courtroom to the negotiating table.
While the judgment establishes that workers’ rights cannot be indefinitely suspended, questions remain about how and when affected former employees will ultimately receive their benefits. Much will depend on the legislative amendments Government introduces over the next six months and the financial position of the company itself.
Legal analysts say the ruling could have consequences beyond SMM Holdings. It establishes an important precedent that constitutional labour rights cannot simply be frozen by reconstruction legislation, potentially influencing future disputes involving workers at companies placed under similar statutory arrangements.
For former SMM workers, though, the significance is more personal than legal.
After years of waiting, Zimbabwe’s highest court has finally affirmed what they had argued all along: reconstruction cannot become a permanent excuse for denying workers what they earned.
