Lawyers representing former Premier Services Medical Aid Society chief executive officer Dr Cuthbert Dube say their client was still employed by the health insurer because his contract had not been terminated.
As a result, they said Dr Dube was owed more than US$700,000 in outstanding salaries that he had not been receiving from PSMAS as well as from its subsidiary, Premier Service Medical Investments since January this year.
Mr Jonathan Samkange of Venturas and Samkange law firm, said the previous PSMAS board had only asked Dr Dube to go on leave without indicating that it would be unpaid leave.
"The board, under pressure, asked him to go on leave pending some resolution to be made by the board. The next thing they told him that his salary had been reduced to US$43,000 but they stopped paying him that US$43,000. That is the reason we wrote to them reminding them but they told us that they were waiting for the board. But our argument is that if you have the power to stop the salary then you should also have the power to pay," Mr Samkange said.
Mr Samkange said they took the matter to the Labour Court because failure to pay their client constituted an unfair labour practice. He said PSMAS owed Dr Dube US$265 000 in salary arrears from February to May.
Mr Dube doubled up as PSMI chief executive officer as well as holding 20 percent shareholding in the investment arm.
He said while PSMAS reduced Dr Dube's salary, PSMI was silent and no communication had taken place between the two parties though they stopped paying him his salary from January.
As a result, Mr Samkange said their client was owed more than US$550,000 in salary arrears between January and May when they took the case to the Labour Court.
"What is clear is that Dr Dube is still employed by both PSMAS and PSMI because there has been no termination of contract. As far as we are concerned, he is on paid leave at PSMAS because they did not say it was unpaid leave. As for PSMI, there has been no communication at all except that they just stopped paying him. So he is still employed by both PSMAS and PSMI," Mr Samkange said.
He said Dr Dube had not breached his employment contracts at both PSMAS and PSMI since he executed what was approved by the board.
Mr Samkange said Dr Dube formed PSMI, which owns hospitals, clinics and pharmacies to be the biggest service provider resulting in the investment arm opening branches in Zambia and Tanzania.
"That is a private limited company owned by shareholders with the main shareholder being PSMAS with 80 percent while 20 percent is owned by Dr Dube making him the largest individual shareholder. PMSAS and PSMI agreed that Dr Dube would be paid salary as its CEO as well. The salary for both PSMAS and PSMI was agreed to by both shareholders and directors of PSMI and PSMAS.
"In 2012, Dr Dube was due to retire because he had reached retirement age but the board pleaded with him and extended his contract by another 10 years from January 2014 on the same terms with the previous contract," said Mr Samkange.
However, PSMAS acting board chairperson, Dr Gibson Mhlanga, disputed the claims saying Dr Dube's contract had been terminated by the previous board.
"He was actually given an exit package and he took some of the money. That is why some of us say it doesn't make sense that now he says he is still employed by PSMAS. He has no role in both PSMAS and PSMI because he was group CEO which means that covers everything under PSMAS (and) that is the contract that was terminated. In any case that is what they are contesting at the court and we have also submitted our response. We will let the justice system take its course because we don't want to keep arguing with him," Dr Mhlanga said.
Dr Mhlanga, however, did not disclose how much Dr Dube was paid.