Challenges of Unilateral Variation of an Employment Contract by Anemployer.

Abstract

Indigenisation is articulated in the Indigenisation and Empowerment Act as a deliberate involvement of Indigenous Zimbabweans in the economic activities of the country to which they had no access, so as to ensure the equitable ownership of the nation’s resources. The focus of this article is to illustrate the challenges of unilaterally varying employment contracts by employers in the interests of the business. The article will further articulate if there are measures that companies may adopt to safe guard the wellbeing of employees in a growing economy being encountered in Zimbabwe, while aligning with the ambit of the Indigenisation Act to create wealth using natural resources following the guidelines provided by the Labour Act.

Introduction

In terms of the Indigenisation and Economic Empowerment Act, an indigenous person is defined as any person who before the 18th of April 1980 was disadvantaged by unfair discrimination on the grounds of his or her race or descendant. The Act’s objective was meant to allow the indigenous and discriminated Zimbabwean an opportunity to be self-dependant and to boost the country’s economy through entreprenuership. Indigenisation policies were created to redress the dominance of multinational companies which was a noble idea since this changeover has to a greater extent contributed to the growth of the Zimbabwean economy. The aims of the Indigenisation Act were to create wealth, alleviate poverty and expand the domestic market. Through Indigenisation many companies have been created in Zimbabwe reducing the rate of unemployment somewhat. These companies have employed a great number of people creating binding agreements between the employer and the employee, thus being the focal point of this article to address the issue of unilateral variation of employment contracts.

The definition of a contract includes a promise to do something or refrain from doing something which is enforceable by law. In the case of Allen Mutara v Fadzanai Mutopo and Registrar of Deeds, Mangota J. stated that a contract is defined as an agreement which is intended to be enforceable at law. The learned judge further articulated that a contract defines the terms and conditions which each party must abide by and if there is a breach of contract by either party, either has the right to cancel the contract or claim any damages that have arisen as a result of the breech. In terms of Section 65 of the Constitution of Zimbabwe, hereinafter referred to as the Constitution, states that an employee has the right to be involved in the changes or variations that take place in a contract of employment. Section 65 speaks directly on labour matters and draws a distinction as to who is protected by the Labour Act [Chapter 28: 01] (hereinafter referred to as LA) of Zimbabwe which is a legislative instrument that is used to regulate the contractual and employment relationship that exists between an employee and employer. The Constitution in terms of section 65 covers the following upon any person who falls within the confines of the term employee as defined in the LA:

Section 65

(1) Every person has the right to fair and safe labour practices and standards and to be paid a fair and reasonable wage.

(2) Except for members of the security services, every person has the right to form and join trade unions and employee or employer’s organisations of their choice and to participate in the lawful activities of those organisations or unions.

(3) Except for members of the security forces, every employee has the right to participate in collective job action, including the right to strike, sit in or withdraw their labour or to take similar concerted action, but a law may restrict the exercise of this right in order to maintain essential services. 

(4) Every employee is entitled to just, equitable and satisfactory conditions of work.

Understanding the concept of an employment relationship

The rights stated in section 65 of the Constitution work in tandem with the LA, which in terms of section 2A (3) prevails over any other enactment that is inconsistent with it.  The LA defines an employee as “any person who performs work or services for another person for remuneration or reward on such terms as agreed upon by the parties or as provided for by the Act…” An employer in the LA is defined as “any person who employs or provides work for another person, and remunerates or expressly or tacitly undertakes to remunerates him and includes a manager …..” The definition given in terms of section 2 of the LA gives a clear distinction on which employees fall under the LA whilst, those employed in the Civil Service  are regulated by pieces of legislation which include the Public Service Act Chapter 16:04 and the Health Services Act Chapter 15:06. An employment relationship exists only when parties have entered into an agreement, where one party is offering work and remuneration and the other is proffering labour in return. In order to determine whether such a relationship exists especially where a dispute has arisen courts often adopt the multiple or dominant impression test. 

This multiple test combines various factors that determine if there is an employment relationship. One of the factors is that there must be an element of control exercised by the employer over the employee. In the landmark case of Colonial Mutual Life Assurance Society v McDonald, the court held that “….in other words unless the Master not only has the right to prescribe to the workplace what work has to be done but also the manner in which the work has to be done.” Another factor to be taken into consideration is the organisation test which was described in the case of Smit v Workmen’s Compensation Commissioner where it was stated that “… under a contract of service, a man is employed as part of the business and his work is done as an integral part of the business…” Additionally, as Madhuku posits, the mutuality of obligation test arises where the contract of employment is a contract to render services and receive remuneration for the work done and also carries mutual promises of future service. Other factors include the economic reality test where a person is considered to be an employee where they do not carry out similar business to that done at their place of employment.

Unilateral Variation of an employment contract

Attempting to define the unilateral variation of a contract is an injustice without first considering the classical contract theory which emerged in the late 19th century, where the principles governing its formation, performance and enforcement are founded. The theory emphasised limited government intervention and introduced the will’s theory which states that contracts arise from the meeting of minds of the parties and the exercise of individual autonomy and self- imposed regulations. However the modern theory of contract demands a shift from the classical contract theory with focus being on state intervention and substantive fairness. In a free market the operative ideology is that there exists an uneven bargaining power and members of a collective society who are naïve and in need of state or intervention in free market to protect the interests of the community. There is increased state control through legislation and judicial interventions due to the modern concept of contract which adheres to close regulation of contracts where  contracts are set aside on the basis of reasonableness and fairness. The general law in Zimbabwe with regards to employment contracts, is that a contract cannot be varied unilaterally by an employer without prior discussion with the employee concerned. Various scholars converge on the notion that in the legal context, a unilateral variation clause in a contract gives parties the express right to alter the terms of the agreement, however in the absence of such a clause employers cannot change the key terms of an existing employment contract without discussing and agreeing with the employee.  The key terms that cannot be varied unilaterally by an employer include remuneration, hours of work, job title/status, duties and nature of work, period of employment where fixed contracts are concerned leave entitlements and notice periods for termination. It is imperative to note that where a variation clause has been placed in a contract of employment, the employer has the duty to inform the employee of the changes that are about to be undertaken. 

In the case of Danai Guruva v Traffic Safety Council of Zimbabwe, the Supreme Court held that the unilateral decision by an employer to transfer an employee to another branch is within the employer’s discretion if it is based on good cause. The court explained good cause as “while not easy to define, would include such matters as unfounded allegations, victimisation of the employee, and any action taken to disadvantage the employee.” Malaba DCJ (as he then was) stated that “there is a principle of law to the effect that employment conditions do not remain static. Contracts of employment will respond to the changes in the fortunes of the business.” Although the employer does not have the universal right to terminate employment contracts unilaterally courts do consider the merits of each case.

Circumstances under which an employer may vary an employment contract unilaterally

The case of Chirasasa & Anor v Nhamo NO & Anor SC 133-2002, illustrates the position when employers were allowed to unilaterally terminate fixed term employment contracts by giving notice which was known as no fault termination which was however later overturned by limiting termination grounds through the Statutory Instrument of 2006. Where a contract contains a variation clause which has an express term, the employer is allowed to vary the conditions of the employment contract. An employer is also allowed to vary a contract of employment if the contract states so and  follows the procedure of informing the concerned party or employee, however transfers to another branch do not constitute a variation of the key terms of an employment contract. As noted in the case of Danai Guruva v Traffic Safety Council of Zimbabwe supra an employer has discretion in operational matters of the business such as transfers in as far as it is genuine and is not influenced by any reasons that can be deemed as victimisation of an employee.

In the case of Agricultural Bank of Zimbabwe Limited t/a Agribank v Clemio Machingaifa it was stated that an employment contract is not cast in stone but that changes in the economy or industry may warrant changes to the contract. In this case, the appellant argued that “in terms of paragraph 11 of the employment contract the respondents undertook to subscribe to the Bank’s policies and procedures contained in use and as revised from time to time. Pursuant to this clause a revised motor vehicle scheme came into existence. The contract also contained a clause that gave the respondents a mileage allowance based on a mileage of 4000km per month and per the applicable standard AAZ rates.” Evidently the court exercised its discretion as regulator and considered the clause and concluded that such entitlements could not be altered or varied by the appellants at a whim simply because they were entitled to a change of its policies and procedures from time to time. The law is clear on the need for a consensual agreement between the parties prior to unilateral changes of key components of an employment contract.

Mitigating the changes in business and the rights of the employees

Experts note that Zimbabwe has an evolving business landscape where human resources compliance is more critical and must be implemented. In light of the changes to the common law principle which allowed unilateral variation of an employment contract by an employer, for Zimbabwean business compliance is a more strategic necessity which safeguards both the employee and the employer and creates a positive workforce culture. Some of the measures that can be implemented include continuous knowledge and training of business owners and employees. This is vital as the labour laws and regulations are subject to amendments such as the recent Labour Amendment Act 11 of 2023. Business owners must be vigilant in regularly monitoring updates from the Ministry of Labour and Social Welfare and continuously participate in Human Resources forums, workshops and seminars to avoid legal violations. 

Another useful measure would be for business owners to have well documented and clear policies and standard operating procedures which are understood by both parties. These have to be constantly updated to reflect any legal changes which must always be communicated to both parties in an employment relationship. The most important measure is to have written employment contracts detailing clearly duties, remuneration and other key terms expected in such a contract. Any changes to employment conditions must be carried out formally and be discussed with the employee concerned.

Conclusion

Businesses in Zimbabwe are evolving and the Labour laws and regulations are subject to amendments. As was alluded to in the case of Agricultural Bank of Zimbabwe t/a Agribank v Clement Machingaifa, that an employment contract is not cast in stone but is subject to economic changes/fortunes of business. However what is imperative to note is that an employment contract is between an employee and an employer, and is guided by the principle of party autonomy, which is subject to state regulation and intervention to safeguard the rights of both parties. In Zimbabwe, unilateral variation of an employment contract by an employer is not allowed, an employer must consult the employee prior to making any changes especially those that relate to the key terms of a contract such as remuneration or hours of work etc. Transferring an employee to another branch does not constitute unilateral variation of an employment contract, as was noted in the case of Danai Guruva v Traffic Safety Council of Zimbabwe. In this case it was highlighted that an employer may exercise discretion in as far as it is genuine and such discretion should not be directed at making the working environment intolerable for an employee. In an attempt to maintain a positive working environment, business owners must communicate any changes that affect the employees’ key contractual terms and be in agreement before changes are implemented. To avoid legal violations as business owners it is important to exercise human resource’s compliance strategies and be aware of any amendments to the labour laws and attend workshops that teach on labour laws.

REFERENCE(S):

Legislation

Constitution of Zimbabwe Amendment (No 20) Act of 2013

Indigenous Empowerment Act of 2007

Labour Act [Chapter 28:01]

Labour Regulations SI 15 OF 2006

Books

 Madhuku L, Labour Law in Zimbabwe (Directory Publishers 2015)

Case Law

 Agricultural Bank of Zimbabwe Limited t/a Agribank v Clemio Machingaifa SC [61/07]

Allen Mutara v Fadzanai Mutopo & Registrar of Deeds (219 of 2013) [2023] ZWHHC 325 

Chirasasa & Anor v Nhamo NO & Anor SC [133-2002]

Colonial Mutual Life Assurance Society v McDonald [1959] 4 SA 207 (A) 

Danai Guruva v Traffic Safety Council of Zimbabwe SC [30/08] 

Mudenda v Lion Match Ltd SC [68-14]

Smit v Workmen’s Compensation Commissioner [1979] 1 SA 51

Articles

Godfrey Tambudzai Musabayana & Emmanuel Mutambara ‘Zimbabwe’s Indigenous SME Policy Framework, A Tool for Black Empowerment’ [2020] 

Anotida Chikumbu, Indigenization and Economic Empowerment in Zimbabwe, <https://www.academia.edu/38608466/1 Academia 2022> accessed 8 January 2026

Yam Kumar Yonjan, ‘An Analysis on Major Elements of a Valid Contract under Muluki Civil Code 2074’ (2019) <https://ssrn.com/abstract=3437233> 1 accessed 

 Panashe Eric Chivhenge & Innocent Maja, ‘The Propriety of State Intervention in the Enforcement of Contracts in Zimbabwe’ [2021] University of Zimbabwe Law Journal 

Kessler, Gilmore & Kronman, Introduction: Contracts as a Principle of Order, (Contracts: Cases and Materials) 

 Marume and Furidzo Legal Practitioners,‘Variation of Employment Contracts’ (2022) <https://www.marumeandfuridzo.com> accessed 9 January 2026

M & J Consultants, ‘Avoiding Legal Risks with HR Compliance’ <https://mjconsultants.co.zw/insights/avoiding-legal-risks-with-hr-compliance/# > accessed 14 January 2026