A $37 million payout awarded to over 200 RioZim employees has been put on hold following a High Court ruling that the mining company is protected by ongoing corporate rescue measures.
Justice Catherine Bachi Mzawazi removed the case from the court’s schedule, citing legal provisions that impose a freeze on all litigation once a company enters corporate rescue. “The law can be harsh,” the judge commented, noting that RioZim strategically utilized this legal protection, which unfortunately delayed the employees’ rightful claims. “The law must be followed unless changed or overturned,” she added.
The case involves Edmore Kasirori and 219 other workers who secured a labour arbitration award against RioZim valued at over $37 million. They sought the High Court’s approval to enforce the award. However, just a day before the hearing, RioZim’s legal team argued that proceedings could not proceed because the Zimbabwe Diamond Allied Workers Union had filed for corporate rescue for the company in April.
Justice Mzawazi ruled in favor of RioZim, referencing Section 126 of the Insolvency Act, which mandates a suspension of all legal actions once a corporate rescue application is initiated. “All ongoing or pending legal proceedings are put on hold during corporate rescue,” she explained.
While recognizing the frustration of the employees, the judge emphasized that their claims have not been dismissed but are merely delayed temporarily. Corporate rescue processes are required to conclude within three months. “Corporate rescue serves as a vital opportunity for financially troubled companies to recover and meet their obligations,” she said.
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