JUDGMENT A TO Z 2

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA [ARUSHA SUB- REGISTRY]

AT ARUSHA LABOUR REVISION NO. 75 OF 2023 (Original Labour Dispute No. CMA/ARS/ARS/134/23/63/23 o f the Commission for Mediation and Arbitration Arusha before Hon. O.W Ngaruka., Arbitrator) A TO Z TEXTILE MILLS LTD............. .......................................... APPLICANT

VERSUS NDIMANGWA DAUDI MAJULA................................................ RESPONDENT

JUDGMENT 05th & 28h November, 2024 I.C. MUGETA, J The respondent was employee of the applicant. He was retrenched together with others for a reason that the business of the applicant was not productive enough. The respondent challenged the retrenched and the CMA held that the reasons for the retrenchment was unfair and the retrenchment process was unfair too. The applicant was aggrieved with the decision of CMA, hence, this application which has four grounds of complaints, namely: i) The arbitrator failed to analyse and evaluate evidence and exhibits of the respondent (sic) finally reaching erroneous decision. ii) The evidence of the respondent was weak and contradictory iii) The arbitrator erred to hold that the termination was unfair while all the procedures were properly followed. iv) The arbitrator relied on evidence which was not admitted in evidence. The applicant is represented by Ebenezer Rwabyo (legal officer of the applicant) and the respondent is represented by Herode Bilyamtwe (legal representative). The application was argued orally. Mr. Rwabyo combined the first and second complaints to one complaint that the CMA failed to analyse the evidence and exhibits of the applicant. According to him, as the reasons for retrenchment were economical, if evidence relating to the financial status of the employer was produced to employees that would have prejudiced the

applicant's business confidentiality. Therefore, he argued, in such cases it sufficient to inform the employees that the Company was not in good financial standing. Mr. Bilyamwe replied that the applicant failed to prove the validity of termination on account of economic hardship reasons. That no bank statement or business trend record were produced to substantiate the claim. Mr. Rwabyo re-joined that the law does not require disclosure of confidential business reports to prove economic hardship as a reason for retrenchment. As rightly held by the arbitrator retrenchment procedure is provided under section 38 of the Employment & Labour Relations Act [Cap 366 R.E. 2019] (the ELRA). Section 38 (1) (a) and (b) require the employer to give notice of intention to retrenchment once it is contemplated and to disclose relevant information on the intended retrenchment for purposes of proper consultation. Consultation is required under section 38 (1) (c) of the ELRA. In evidence, the applicant relied on RD1 as a notice of intension to retrench. This document is undated. It has a title and the list of names of people to be retrenched. The title reads: "TAARIFA YA KUKUTANA NA VIONGOZI WA CHAMA CHA WAFANYAKAZI(TUICO) WATAWI

WAFANYAKAZI WALIOORODHESHWA HAPO CHINI

WANATAARIFIWA KUFIKA KATIKA ENEO LA DARASANI ILI KUPA 77WA MWENDELEZO WA ZOEZI LA KUPUNGUZA

WAFANYAKAZI KATIKA KIWANDA CHA A TO Z NA KAMPUNI TANZU. KIKAO KITAFANYIKA TAREHE 1/3/2023 SAA NANE

KAMILIMCHANA It is my view that by any standard the notice does not disclose information on the intended retrenchment. The phrase "///' kupatiwa muende/ezo wa zoezi la kupunguza wafanyakazi" presupposes there was a process. However, how that process was executed was not proved by either documents or oral evidence of Carolini J. Moshi who testified for the applicant. In her evidence, she said the the intention retrench information was issued through TUICO. She did not say where it was orally or by documentation. This uncertainty should be resolved in favour of the respondent who testified to have not been consulted as the burden of proof the law was complied with lies with the employer. The information that the retrenchment was for economic reason was at least disclosed in exhibit RD2. However, that exhibit is not a notice but a retrenchment letter. For the forgoing, I hold that the reason for retrenchment information was neither disclosed in the notice nor during the consultation process. Economic hardship being the reason for retrenchment is stated in the termination letter. Under the circumstances, it it safely be presumed that the retrenchment for operational requirement was given as a pretext for retrenchment. Mr. Rwabyo has argued that economic reasons for retrenchment cannot be shared for business confidentiality ground. While I agree that confidential information cannot

be randomly shared, I do not agree that all information relating to economic hardship of a Company are 4 confidential. Basic information which would make the employer appreciate the challenge must be disclosed. In this case nothing was disclosed. I find no merits in the first and second complaints. Mr. Rwabyo also argued the third and fourth complaints jointly. They are about procedural fairness in the retrenchment. He relied on exhibit RD1 to argue that the employees' trade union was consulted by a meeting held on 01/03/2023. He further submitted that the notice of retrenchment to the respondent is in exhibit RD2. Relying on the holding in the case of Alexander Boniface & 2 Others v. Belgium Development Agency, Revision Application No. 162/2022, High Court (Labour Division) - DSM he concluded that as the respondent accepted the retrenchment benefits, he was estopped from challenging it. He also cited section 123 of the Evidence Act [Cap. 6 R.E 2022] to buttress his argument. Mr. Bilyamtwe replied that there was no consultation with the workers trade union. In his view, had there been one, there would have been a signed retrenchment contract between TUICO and the employer. While I agree with Mr. Rwabyo that exhibit RD1 gives a notice for the meeting on 1/ 3/2023 , the same does not prove that the meeting was, indeed, held. Meetings are proved by minutes of the meeting not

notices of the meeting. Therefore, there is no evidence either that the intention to retrench was shared nor that consultation was held. Was exhibit RD2 a notice of intention to retrenchment to the respondent? I do not think so. As I have said, exhibit RD2 is in a form of a notice providing reasons for the retrenchment. At the same time, it is a retrenchment letter. So, it served both purposes. At the last but one paragraph it reads: "... kwamasikitikomakubwa, tunakutarifukuwa wewenimmoja kati ya wafanyakazi ambao wameorodheshwa kwa a jili ya kupunguzwa rasmi kuanzia tarehe 23/3/2023". It is interesting that the 23rd day of March, 2023 was also the retrenchment date per exhibit RD3 which in paragraph 1 reads: ".... Hivyo ukomo wako wa ajira utakuwa n i tarehe 23/03/2023". For the foregoing facts, the CMA held that the retrenchment was procedurally unfair for non- compliance with S. 38 (C) of the ELRA. I find no reason to fault the arbitrator. Was the respondent estopped from claiming rights associated with the retrenchment after receiving the retrenchment package? In the case of Alexander Boniface Masasi (supra) a page 10 it was held: "It is my view that having received retrenchment package, it was not further open to the applicants to file the dispute at CMA challenging the termination " Whether the above statement is the correct position of the law is an issue for another

day. It suffices to say here that the holding in that case was an obiter dictum in that it came after the court had held that the termination in that case was substantially and procedurally fair. In this case, both substance and procedure for the retrenchment are faulty. Further, the holding being obiter dictum is neither binding nor am I persuaded to follow it. Section 123 of the Evidence Act does not apply in the circumstance of this case because the respondent has not denied to have received the retrenchment package for the estoppel principle to apply. In the fine, I find no merits in all the grounds of complaint and the whole application is dismissed. Each party to bear own costs. 28/11/2024 Court: Judgment delivered in chambers in the presence of Herode Bilyamtwe (Personal representative) for respondent and in the absence of the applicant. Sgd: I.C MUGETA

JUDGE 28/11/2024 8