ConCourt backs ex-SMM workers in benefits dispute

The Constitutional Court has upheld a High Court ruling declaring unconstitutional a provision of the Reconstruction of State-Indebted Insolvent Companies Act that prevented former employees of SMM Holdings from accessing their terminal benefits.

In a landmark judgment delivered on June 17, 2026, the court confirmed the invalidity of Section 28(2) of the Reconstruction Act, finding that the provision unlawfully restricted workers' constitutional and statutory labour rights by indefinitely delaying their ability to claim benefits owed to them.

The case was brought by 27 former employees of SMM Holdings, who argued that the law had effectively denied them access to salaries, retrenchment packages and other terminal benefits following the termination of their employment.

Writing for a unanimous bench, Justice Anne-Mary Gowora ruled that the impugned provision was inconsistent with Section 65(1) of Zimbabwe's Constitution, which guarantees the right to fair labour practices, as well as Sections 2A(3) and 13 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 court said.

The former workers told the court that many employees affected by the dispute had spent years waiting for payment, while some had died before receiving benefits owed to them.

They argued that Section 28(2) effectively blocked them from enforcing their claims against SMM Holdings, which has remained under reconstruction for more than two decades.

The application was opposed by the Ministry of Justice, Legal and Parliamentary Affairs, the Attorney-General's Office and SMM Holdings.

The respondents argued that the matter was not yet ripe for constitutional determination and that workers had alternative remedies available under insolvency and reconstruction legislation.

However, the Constitutional Court rejected those submissions, finding that a genuine and ongoing dispute existed and that the workers' rights were directly affected by the legislation.

The court emphasised that the Labour Act takes precedence over any inconsistent legislation and that workers employed by companies under reconstruction remain entitled to the protections guaranteed under labour law.

"It follows, inevitably, that Section 13 applies with full force to employees whose contracts of employment are terminated in the course of a company's reconstruction," Justice Gowora said.

The court further concluded that Section 28(2) imposed an unfair, unreasonable and disproportionate limitation on workers' rights.

"Section 28(2) fails the proportionality test as it completely removes from employees the fair labour rights enshrined in Section 65(1)," the judgment stated.

While confirming the declaration of constitutional invalidity, the Constitutional Court suspended the order for 180 days to allow the responsible minister time to amend the legislation and bring it into compliance with the Constitution.

The court also ruled that the declaration would not operate retrospectively and would not invalidate actions taken before the order was issued.

The judgment was supported by Deputy Chief Justice Elizabeth Gwaunza, Justice Paddington Garwe, Justice Ben Hlatshwayo, Justice Bharat Patel, Justice Susan Mavangira and Acting Constitutional Court Judge Nicholas Mathonsi.

Legal analysts say the ruling strengthens labour protections for workers employed by companies under reconstruction and reaffirms the supremacy of constitutional labour rights over legislation that delays or suspends access to terminal benefits.

The judgment is expected to have wider implications for employees of other companies placed under reconstruction, potentially opening the way for greater enforcement of labour rights in circumstances where workers have faced lengthy delays in receiving benefits owed to them.