Judgement Labour Revision No

THE JUDICIARY OF TANZANIA IN THE HIGH COURT OF UNITED REPUBLIC OF TANZANIA AT MOSHI LABOUR REVISION NO. 546 OF 2023 (C/F Labour Dispute No. CMA/KLM/MOS/ARB/34/2023 in the Commission for Mediation and Arbitration for Kilimanjaro) ABDALLAH KONDO CHUMA……….…………..………..…….APPLICANT VERSUS SBC TANZANIA LIMITED …………………….……...………. RESPONDENT JUDGEMENT Last Order: 14.08.2024 Judgment: 13.09.2024 MONGELLA, J. The applicants herein have moved this Court vide Section 91(1) (a) and (b), 91(2)(a),(b) and (c); 91(4) (a) and (b) section 94 (1) (b) (i) of the Employment and Labour Relations Act, 2004 [Cap 366 R.E 2019] (ELRA) and Rule 24 (1); (2), (a), (b), (c) , (d), (e), (f); (3) (a), (b), (c), (d) and; 28 (1), (c), (d) and (e) of Labour Court Rules, 2007, GN No. 106 of 2007, seeking for this court to: one, call for and examine the proceedings of the Commission for Mediation and Arbitration (CMA) in Labour Dispute No. CMA/KLM/MOS/ARB/34/2023 in order to satisfy itself as to its legality, propriety, rationality, logic and correctness; two, revise and set aside the CMA award issued on 29.11.2023 and; three, to issue any order that appears just and convenient in the circumstances. Page 1 of 19 The applicant’s chamber summons was accompanied by this own affirmed affidavit. The respondent contested the application vide a counter affidavit sworn by Advocate Neema Oscar. The brief background of the matter is to effect that: the respondent employed the applicant as a Customer Representative vide a letter dated 15.05.2004. His employment was to take effect on 17.05.2004. He was then transferred to Dodoma and finally to Moshi. His last post prior to his termination on 10.07.2023 was an Area Sales Manager. It was alleged that there occurred a shortage of TZS. 5,795,200/- in the applicant’s sales account. The same was discovered by DW1 and duly reported to the finance manager at Arusha depot. On 31.05.2023, the Moshi area sales manager one, Yussuf Bilali, wrote a letter to the applicant concerning misappropriation of company money amounting to TZS. 4,176,000/-. The letter noted the shortage of the mentioned amount and required the applicant to pay the same not more than 03.06.2023. The applicant responded vide a letter dated 05.06.2023 explaining the cause of such shortage. In the letter, he explained that the shortage was caused by another person who was not an employee. He informed Mr. Bilali that he had communicated with the responsible person and efforts were being made to offset the shortage, whereby he promised the same to be done in a month. Vide a letter issued on 10.06.2023, Mr. Bilali required the applicant to offset the shortage in three weeks’ instalments. Page 2 of 19 On 24.06.2023 having noted that the applicant did not offset the shortage, the respondent’s Human Resources Officer wrote a letter to the applicant inviting him to attend a disciplinary hearing to be held on 30.06.2023 at Arusha. The applicant did not attend the hearing, thus the matter proceeded ex parte. The Committee recommended that he be terminated from employment. He unsuccessfully appealed against the said decision. The applicant employment was eventually terminated vide termination letter issued on 10.07.2023. Aggrieved by his termination, the applicant filed a complaint in the CMA claiming that his employment was substantively and procedurally unfair. The respondent called two witnesses and tendered 13 exhibits to prove fairness of the applicant’s termination. On his part, the applicant stood for himself and did not tender any exhibits. The CMA found the applicant’s termination was both procedurally and substantively fair. Aggrieved, he has sought this revision based on three legal issues advanced at paragraph 12 of his supporting affidavit, to wit: a. Whether the arbitrator was correct in holding that the respondent had fair reasons to terminate the applicant from the employment; b. Whether the arbitrator was correct in holding that the applicant’s termination from the employment was procedurally fair; and Page 3 of 19 c. Whether the arbitrator properly examined and analysed the evidence on record. Parties argued the revision in writing. The applicant was represented by his personal representative one, Mr. Mudinda Justin. The respondent, was represented by Ms. Neema Oscar, learned Advocate. Mr. Justin commenced his submission by providing the historical background of the case which I find no need to reproduce having given the brief facts of the case herein earlier. Expounding on the 1st issue, Mr. Jastin averred that the respondent did not rightfully investigate the alleged misconduct of misappropriation of company money worth TZS. 4,086,631.12, which he alleged was apparent from Exhibit D11. He faulted the respondent’s failure to consider that the shortage had been offset since 05.07.2023. Making reference to Exhibit D1 he pointed out that the applicant had paid TZS 1,000,000/- on 30.06.2023; TZS 2,500,000/- on 03.07.2023, thus all payments had been effected prior to his termination on 10.07.2023. Mr. Justin insisted that the termination was substantively unfair as evident in exhibits D1 and D11. He referred the case of Standard Chartered Bank T. Ltd vs. Linas Simon (Revision No. 378 of 2019) [2020] TZHCLD 46 (8 May 2020) TANZLII, which explains what amounts to fair termination and burden of proof. He finalized his Page 4 of 19 submissions on the 1st issue by praying for this Court to set aside the applicant’s termination ordered by the CMA. Addressing the 2nd ground, Mr. Justin challenged that the procedures for termination were not followed on the following reasons; one, the disciplinary hearing committee was convened prematurely. He argued so relying on Exhibits D7, D8 and D9, which evidences that the applicant was given three weeks to offset the shortage of TZS, 4,086,613.12 vide a letter issued to him on 10.06.2023. He calculated the three weeks to have expired on 01.07.2023. In those bases, he had the stance that calling the applicant to attend the disciplinary hearing vide the letter issued on 24.06.2024 was procedurally unfair and premature. Two, he claimed that the applicant was not given a chance to show cause or explain on the said allegation of misappropriation of company property. Three, he challenged that there was no investigation conducted or investigation report tendered at the CMA. In the premises, he stressed that the arbitrator’s award was wrongful as Rules 12(1),(2),(3),(4),(5) and 13(1), (5) of the Employment and Labour Relations (Code of Good Practice) Rules, 2007 GN No. 42 of 2007 were violated. He again cited the case of Standard Charted Bank (supra) to fortify his arguments. Arguing on the 3rd ground, Mr. Justin claimed that the arbitrator failed to analyse exhibit D7 which showed that on 10.06.2023, the Page 5 of 19 respondent informed the applicant to offset the shortage in three weeks instalments. He added that the Hon. Arbitrator also failed to see that in Exhibit D8 the respondent had informed the applicant to appear for disciplinary hearing on 30.06.2023. He thus faulted the respondent for proceeding with disciplinary hearing prior to the expiry of the payment period; and the Hon. Arbitrator for failure to analyse the two exhibits leading him to arrive at wrong findings. Still challenging the Arbitrator, he claimed that the arbitrator failed to analyse exhibits D1 and D11. Exhibit D11 shows that the respondent decided to terminate the applicant’s employment on 10.07.2023 on gross misconduct due to misappropriation of Company property worth TZS 4,086,613.12. However, he said, Exhibit D1 shows that the applicant had offset the shortage on 05.07.2023. In the premises, he held the view that the applicant’s termination was founded on a non-existing claim of gross misconduct. Mr. Justin finalized his submission by praying that the CMA award be set aside and the respondent reinstated according to Section 40(1), (a) of the ELRA as prayed by the applicant in CMA F.1. The application was opposed. Ms. Oscar started her reply submission by challenging the applicant’s submission for containing evidence. She contended that submissions are not evidence, thus one cannot attach any evidence during submissions. In her view, attachment of evidence can only be done in affidavits as the same are taken under oath rendering them as good as oral testimonies. In support of her arguments, she referred the case of Bi. Nunugha Page 6 of 19 Labu Gewe vs. Parmi Daniel Gobre (Misc. Civil Application 55 of 2020) [2022] TZHC 629 (23 March 2022) referred to in Agnes Hangi vs. Ramadhani Kassim Semhando (Misc. Application 32 of 2019) [2023] TZHC 16471 (17 February 2023) TANZLII. Ms. Oscar also challenged Mr. Justin for including the historical background of the case in his submissions. On that, she argued that it was inappropriate for him to reproduce the same as every detail is within the record of the proceedings and this Court should refer to the record and not his submissions. She prayed for the Court to ignore the presented historical background and attachments in Mr. Justin’s submission. Without prejudice to her remarks as above, she addressed the grounds advanced for determination. On the 1st issue, she supported the applicant’s termination averring that it was based on valid and concrete reason. Explaining the alleged validity of the termination, she contended that the applicant was written a letter (Exhibit D5) requiring him to show cause why disciplinary action should not be taken against him. That, upon writing his explanation the applicant admitted being responsible for the shortage in his account and requested to be given time to offset the same. In her view, the applicant’s act of admitting his fault was enough to prove that the respondent had a valid reason to terminate him given that the misconduct was intolerable. She fortified her arguments with Rule 12(3) (a -f) of GN No. 42 of 2007. The learned counsel further contended that the applicant was charged with misappropriation of company money which was a Page 7 of 19 serious misconduct constituting gross dishonest. As to the claim regarding offsetting the shortage by 05.07.2023, she argued that that did not eliminate the fact that he had used the respondent’s money for his personal benefit, which amounts to dishonesty, a misconduct which warrants termination. That, the applicant had broken the trust between him and the respondent, thus the employee-employer relationship could not proceed. Replying to the 2nd ground, Ms. Oscar had a firm stance that the termination was procedurally fair. She generally referred to the evidence on record claiming that the same clearly shows that all procedures were followed. Explaining further, she contended that the applicant was accorded the right to be heard as he was called to the disciplinary hearing. Speaking of the applicant’s absence in the disciplinary hearing, she argued that the applicant claimed to have notified the respondent management that he would not be able to attend, but failed to prove this allegation. With regard to investigation on the applicant’s misconduct, Ms. Oscar alleged that the same was conducted, which led the respondent to become aware of the shortage. She contended that the applicant did not deny the allegation. As to the applicant not being given an investigation report, she challenged that the same was not a mandatory requirement of the law. In her stance, what is required of the employer is to only conduct an investigation. In support of her averment, she referred the case of Ovadius Mwangamila & 2 Others vs. Tanzania Cigarette Co. Ltd Page 8 of 19 (Consolidated Revisions No. 334 and 335 of 2020) [2022] TZHCLD 18 (25 January 2022) TANZLII. With respect to the 3rd issue, Ms. Oscar found the same to be misconceived and without legal merit. She never argued on this ground in detail saying that she had tackled the respective aspects of this ground in the previous issues, thus refrained from engaging in repetitions. Addressing the prayer for reinstatement, Ms. Oscar contended that the applicant had failed to establish his claims, thus there was no base for such relief to be granted. She insisted that the CMA award was justified as he was terminated for a valid reason and procedures were followed. She asked the Court to consider the decision in Ovadius Mwangamila (supra) whereby the Court was faced with similar circumstances. She finalized her submissions by praying for the application to be dismissed and the CMA award to be confirmed. Rejoining, Mr. Justin challenged Ms. Oscar’s contention that he presented evidence in his submission. He alleged that he only made elaborations on the evidence admitted at the CMA to expose how the arbitrator erred in law and fact by failing to examine and analyse the evidence properly. As to the 1st and 2nd grounds, he reiterated his submission averring that based on exhibits D5, D6, D7 and D8, the respondent gave the applicant a timeline to offset the shortage in three weeks Page 9 of 19 instalments. However, on 10.07.2023, before the expiry of the timeline, the respondent terminated the applicant’s employment for misappropriation of company cash worth TZS 4,086,613.12 and for gross misconduct regardless of the fact that he had already offset the shortage by 05.07.2023, as seen in exhibit D1. He disputed there being any misappropriation, gross misconduct, gross dishonest or any offense constituting a serious breach of trust relationship between the applicant and respondent. On that argument, he faulted the Hon. arbitrator for holding that the termination was for valid reason. He considered the finding erroneous. Responding to the issue concerning the respondent’s failure to supply investigation report to the applicant before disciplinary hearing; he contended that the same stripped the applicant off proper opportunity to respond to the allegation. Further, he claimed that there was variance between the value the applicant was alleged to have misappropriated whereby at first it was TZS 4,176,000/- and later it was TZS 4,086,631.12/-. In the premises he averred that with lack of investigation report on those allegations and figures, the applicant was in no position to properly respond to the allegations. In his view, the holding of the disciplinary hearing prior to the expiry of three weeks was unfair and premature. He maintained that the arbitrator erred in fact and law in holding that the termination was procedurally fair. He concluded by reiterating his prayer for the ward to be set aside and the respondent be Page 10 of 19 ordered to reinstate his employment according to section 40(1), (a) of the ELRA as prayed in CMA F.1. I have considered the grounds for determination and the submissions of both parties. The applicant is challenging the CMA award on bases of unfairness in termination, both substantively and procedurally. He further contends that the CMA Arbitrator failed to properly analyse the evidence before him. The respondent contends otherwise in regard to all the allegations. In consideration of the parties’ arguments, I find that this matter can be disposed of by addressing one major question, that is, as to whether the termination of the applicant’s employment was fair substantively and procedurally. In the course of my deliberation, I shall address all the issues that cropped herein. However, before addressing the main issues in this matter, I wish to consider the issues advanced by Ms. Oscar in respect of the applicant’s submission. The issues are: one, that Mr. Justin produced evidence in his submissions and two, that he produced the historical background of the matter which was not allowed in law. On the first issue I wish to note that indeed submissions are not evidence and a party is not permitted to produce evidence in the submissions. However, as evident on record, what Mr. Justin did was to merely analyse the evidence on record and reproduced parts of the exhibits admitted as evidence in the CMA. He did not introduce new evidence as misconceived by Ms. Oscar. I therefore find the argument misplaced. Page 11 of 19 With regard to producing historical background, I find no fault in this issue. I expected Ms. Oscar to introduce us to the law forbidding parties from presenting historical backgrounds of the matter in their submissions, but she did not. In my view, presenting background facts in submissions is, in fact, a good drafting practice as it allows parties to set a good foundation of their submissions and set a good flow of their arguments. In that respect, Ms. Oscar’s contention is misconceived. Moving forward to the main issue for determination in this matter, I first wish to state the legal foundation on fairness of reasons and procedure in termination of the employee’s employment. The law well provides that for termination to be considered fair, it must be done for a valid reason and the procedures as set out under the law must have been followed. This is well provided under section 37 (2) of the ELRA, which states: “(2) A termination of employment by an employer is unfair if the employer fails to prove- (a) that the reason for the termination is valid; (b)N/A (c) that the employment was terminated in accordance with a fair procedure.” It is also known that it is the duty of the employer to prove that the termination was done fairly. See, Section 39 of the ELRA, which provides: “39. In any proceedings concerning unfair termination of an employee by an employer, the employer shall prove that the termination is fair. Page 12 of 19 The CMA record shows that DW1 testified to have found a shortage of TZS. 5,795,200/- which he suspected to be owed to the applicant’s account. He subsequently informed the Finance Manager at Arusha. He alleged that the value was offset to TZS. 4,086,000/- and later he received three instalments from the applicant for TZS. 586,000/-, TZS 2,500,000/- and TZS 1,000,000/-. Such details on payments effected are apparent on exhibit D1. There is of course no contention on there being a shortage of TZS. 4,086,000/- in the applicant’s sales account or that he had paid the entire sum by 05.07.2023 as evidenced in Exhibit D1. The impending concern is his termination for misappropriation of the mentioned amount which was classified as a gross misconduct. It is apparent that after the shortage was found, sometime on 31.05.2023, the applicant was informed by Mr. Bilali, an Area Sales Manager and his supervisor at Moshi to pay the said amount not more than 03.06.2023. The applicant, who received the said letter on 03.06.2023, replied to the allegations by his own letter (Exhibit D6). In the said letter, he explained that the shortage was generated due to a dishonest person and he had taken measures to ensure that the shortage is settled by the end of the month. Briefly put, he never acknowledged the allegation of misappropriation of funds rather, the shortage, which he blamed it on another person, though promised to clear the same before the end of the month. Subsequently, vide her letter dated10.06.2023 (Exhibit D7), the respondent required the applicant to offset the outstanding Page 13 of 19 amount in three weeks instalments. He was warned that his failure to do so would lead to disciplinary procedures being applied against him. However, on 24.06.2023, the respondent vide a letter (Exhibit D8) invited the applicant to attend his disciplinary hearing on 30.06.2023 as he had defaulted to pay the outstanding amount in three weeks as required. The applicant did not attend the hearing and clearly there was no proof that he had reason not to do so. It is not doubted that the applicant was eventually terminated on 10.07.2023 for misappropriation of company cash to the tune of TZS. 4,086,631.12. Computing from 10.06.2023, three weeks which are equivalent to 21 days would lapse on 01.07.2023. However, he was contacted on 24.06.2023 which was after 14 days and accused of defaulting. This vindicates the applicant’s assertion that the disciplinary proceedings were prematurely initiated. The respondent took him by surprise by initiating disciplinary proceedings. With respect to conducting disciplinary hearings, employers have the right to proceed in the absence of the employee where there is proof that the employee received the notice of disciplinary hearing and still never attended. This is well stipulated under Rule 13 (6) of GN 42 of 2007 which states: "Where an employee unreasonably refuses to attend the hearing, the employer may proceed with the hearing in the absence of the employee." Page 14 of 19 However, despite the law allowing disciplinary hearings to be conducted in the employee’s absence, the employer’s evidence must be recorded prior decision making. This position was well settled in the case of Kiboberry Limited vs. John van der Voort (Civil Appeal 248 of 2021) [2022] TZCA 620 (7 October 2022) TANZLII, in which the Court of Appeal stated: “The above stipulation is couched in permissive terms. It gives the employer two options where the employee unreasonably refuses to attend the hearing after being duly served with the notice. The first option is proceeding with the disciplinary hearing in the absence of the employee with the evidence substantiating the charges against the employee being presented and a verdict reached. The second possibility is to adjourn the hearing.” Upon viewing the records, despite the matter being heard ex parte, I find there was no evidence tendered at the said hearing to prove the allegation of misappropriation of company money. This can be seen in the hearing form (Exhibit D9) whereby it was only the complainant’s remarks that were noted and not his testimony. This is because what was presented appeared in form of reported speech which only mentioned that the applicant had failed to pay the outstanding amount in three weeks. An ex parte hearing does not eliminate the whole process of adducing evidence and tendering exhibits. In an ex parte hearing the only missing procedure is the testing of the veracity of the complaint’s testimony through cross examination as well as Page 15 of 19 defence hearing, although, the respective body adjudicating the matter could ask questions. The complainant thus ought to have adduced evidence at the disciplinary hearing and the committee to record the same. Failure to do so renders the proper procedure not followed. There were also concerns as to the investigation of the matter. It is well settled that investigation must be conducted. Investigations also vary with respective institutions. This was well expounded by the Court of Appeal in Paschal Bandiho vs. Arusha Urban Water Supply Sewerage Authority (AUWSA) (Civil Appeal No. 4 of 2020) 2022 TZCA 42 (21 February 2022) TANZLII, whereby the Court stated: “It follows then that an investigation prior to a hearing is variable. The process of investigation depends on each institutional internal mechanisms but central to that is that an employee should be afforded an opportunity to be heard prior dismissal.” In accordance with the testimony of DW1, he was the one that noticed the shortage and reported the same. DW2 did not explain whether there was any investigation conducted. He only stated that the applicant was required to offset the shortage. The applicant however explained about the shortage and denied the allegations on misappropriation of the company funds. This led to the alleged disciplinary hearing. I therefore find that there was no investigation conducted because had it been so, they would have properly addressed whether the Page 16 of 19 applicant’s explanations were viable. The mere letter by one Yusuph (Exhibit D13) whom was mentioned in Exhibit D6 as to have been behind the shortage did not suffice to show that the applicant was dishonest. Further, the dates in the letter are scratched depicting alteration. The date written 07/07/2023 was changed to 07/06/2023 thereby creating questions as to whether it existed prior the disciplinary hearing. Further, investigation includes exhausting prescribed internal measures in the respective institution. See, Severo Mutegeki & Another vs. Mamlaka Ya Maji Safi Na Usafi Wa Mazingira Mjini Dodoma (Civil Appeal No. 343 of 2019) [2020] TZCA 310 (19 June 2020) whereby the Court of Appeal in interpreting Rule 13(1) of GN No. 42 of 2007 stated: “In terms of sub-regulation (1) what entails an investigation to ascertain whether there are grounds of the hearing includes as well, exhausting the prescribed internal measures in the Employment Institution regulating the operational aspects which are binding on both the employees and the employer.” In the matter at hand, the applicant was charged with breaching staff regulations, but such regulations were never presented before the CMA. Although that is not a matter of grave concern as elaborated in Platinum Credit Limited vs. Martin Joaqim (Civil Appeal No 138 of 2022) 2023 TZCA 17740 (6 October 2023), I am of the view that furnishing the said regulations before the CMA would Page 17 of 19 have aided in identification of procedures observed when there is shortage of funds in a sales manager account. Procedures are not only derived from rules, but also practices in the respective institution. In this matter, as indicated earlier, the applicant was given 3 weeks to pay back the outstanding shortage however, after 14 days he was charged for misappropriating company funds. This was itself an apparent violation of procedures by the respondent. The disciplinary measures were thus prematurely instituted. It is immaterial that the applicant acknowledged and initiated the payments of the outstanding shortage. It is also not relevant that he made payments prior to the final decision for his termination on10.07.2023. The applicant denied the allegation of misappropriating the money. Him agreeing to offset the shortage did not in any way serve to prove that he had misappropriated the money. In the premises, the respondent had a duty, prior to calling a disciplinary meeting, to conduct an investigation to prove the allegation of misappropriation of funds especially considering that the offence was classified as gross misconduct warranting his termination. The procedures were also prematurely initiated and did not comply with the requirement to hear evidence. This irregularity substantiates the claim that the termination was both substantively and procedurally unfair. In reliefs, the applicant prayed to be reinstated. Considering the circumstances leading to his termination, I find that ordering for his Page 18 of 19 reinstatement would put him into a difficult working environment with the respondent. In foregoing observation, I order the respondent to pay the applicant 12 months’ salary as compensation for unfair termination along with other statutory terminal benefits. This being a labour matter I order for each party to bear his/her own costs. Dated and delivered at Moshi on this 13th day of September, 2024. X L. M. MONGELLA JUDGE Signed by: L. M. MONGELLA Page 19 of 19